Item 7.01 Regulation FD Disclosure
Sugarmade Inc., a Delaware corporation
(the “Company”) makes the following disclosures pursuant to Section 13 or 15(d) of The Securities Exchange Act of
1934, generally referred to as Regulation FD Disclosure.
On January 23, 2019 Sugarmade, Inc. (the
“Company”) announced the signing of a Letter of Intent (the “LOI”) to acquire a retail location of Washington
State-based Hydro4Less. The LOI outlines the general terms of a possible acquisition transaction. Pending the signing of a definitive
agreement, Sugarmade will issue Five Million Dollars ($5,000,000) of its common shares at a price pegged at Ten Cents ($0.10) to
the owners of Hydro4Less in exchange for the single retail operation, not including inventories on hand.
Additionally, via the pending transaction,
Sugarmade will gain an option, at an acquisition price to be determined later, to purchase two additional Hydro4Less retail operations,
which are currently producing in excess of Twenty Million Dollars ($20,000,000) annually. The single location acquisition that
is the subject of the LOI, is expected to produce approximately Five Million Dollars ($5,000,000) for calendar year 2019 and is
currently operating at a profit with positive operating cash flow. The Company believes the single location the acquisition would
be accretive to earning for Sugarmade. Should all three acquisitions close, Sugarmade will increase its annual revenues by approximately
Twenty Five Million Dollars ($25,000,000) million per year.
Hydro4Less is significant supplier to
the growing hydroponic cultivation sector. Neither the Company nor Hydro4Less conduct any business involving the sale of any cannabis
product or relating to any products containing cannabis.
While both the Company and Hydro4Less
believe the signing of a definitive agreement and ultimate acquisition as is outlined in the LOI is likely, there can be no assurance
that such a transaction, or any other transaction, will occur between the companies.
FORWARD-LOOKING STATEMENTS: This filing
contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements also may be included in other publicly available documents issued by
the Company and in oral statements made by our officers and representatives from time to time. These forward-looking statements
are intended to provide management's current expectations or plans for our future operating and financial performance, based on
assumptions currently believed to be valid. They can be identified by the use of words such as "anticipate," "intend,"
"plan," "goal," "seek," "believe," "project," "estimate," "expect,"
"strategy," "future," "likely," "may," "should," "would," "could,"
"will" and other words of similar meaning in connection with a discussion of future operating or financial performance.
Examples of forward looking statements include, among others, statements relating to future sales, earnings, cash flows, results
of operations, uses of cash and other measures of financial performance. At this time there are no assurances the Company’s
acquisition efforts will be successful.