UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Check the appropriate box:
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☒
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Preliminary Information Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
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☐
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Definitive Information Statement
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SUGARMADE, INC.
(Exact name of Registrant as specified in its
Charter)
Delaware
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000-23446
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94-3008888
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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750 Royal Oaks Drive, Monrovia, CA 91016
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(Address of Principal Executive Offices)
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(626) 961-8619
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(Registrant’s Telephone Number, including area code)
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Payment of Filing Fee (Check the appropriate box):
☒ No fee required
☐ Fee computed on table below per Exchange Act Rules
14c-5(g) and 0-11
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction, computed pursuant to Exchange Act Rule O-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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4.
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Proposed maximum aggregate value of transaction:
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☐ Fee paid previously with preliminary materials.
☐ Check box if any part of the fee is offset as provided
by Exchange Act Rule O-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid: None
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2.
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Form Schedule or Registration Statement No.: 14C
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Filing Party: Sugarmade, Inc.
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Date Filed: April 23, 2020
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SUGARMADE, INC.
750 Royal Oaks Drive
Monrovia, CA 91016
Phone Number: (888) 982-1628
NOTICE OF ACTION
TAKEN BY WRITTEN CONSENT OF OUR MAJORITY STOCKHOLDERS
To Our Stockholders:
We are writing
to advise you that the stockholder representing approximately 72.83% of our voting stock approved by written consent on April 21,
2020 the proposal to increase the number of authorized common shares in the corporation from 1,990,000,000 to 10,000,000,000 (the
“Common Share Increase”).
On April 21,
2020, our board of directors unanimously approved the above proposal and to appropriately amend our Third Amended and Restated
Certificate of Incorporation to reflect the change.
PLEASE NOTE THAT
THE NUMBER OF VOTES RECEIVED FROM THE STOCKHOLDERS IS SUFFICIENT TO SATISFY THE STOCKHOLDER VOTE REQUIREMENT FOR THIS ACTION UNDER
DELAWARE LAW AND NO ADDITIONAL VOTES WILL CONSEQUENTLY BE NEEDED TO APPROVE THE ACTIONS.
No action is
required by you. The accompanying Information Statement is being furnished only to inform our stockholders of the action taken
by written consent described above before it takes effect in accordance with Rule 14c-2, promulgated under the Securities
Exchange Act of 1934, as amended.
THIS IS NOT A
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER WHICH IS DESCRIBED HEREIN.
WE ARE NOT ASKING YOU FOR A CONSENT OR PROXY AND YOU ARE REQUESTED NOT TO SEND US A CONSENT OR PROXY.
The accompanying
Information Statement is solely for information purposes only and does not require or request you to do anything. You are encouraged
to carefully read the accompanying information regarding the Common Share Increase.
Important
Notice Regarding Internet Availability of this Information Statement: a copy of this Notice of Action and the accompanying
Information Statement is available to you free of charge at our website, https://sugarmade.com.
April 23, 2020
By Order of the Board of Directors,
/s/ Jimmy Chan
Jimmy Chan
Chairman and Chief Executive Officer
SUGARMADE, INC.
750 ROYAL OAKS DRIVE
MONROVIA, CA 91016
INFORMATION
STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934 AND
REGULATION 14C THEREUNDER
INTRODUCTION
This Information
Statement is being provided to all record and beneficial owners of the common stock, par value $0.001 (the “common stock”),
of Sugarmade, Inc., a Delaware corporation, which we refer to herein as the “Company,” “we,” “our”
or “us.”
The mailing date
of this Information Statement is on or about May 4, 2020. The Information Statement has been filed with the Securities and Exchange
Commission (the “SEC”) and is being furnished, pursuant to Regulation 14C of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), to notify our stockholders of actions (the “Actions”) we are taking pursuant
to written consents representing a majority of the voting power of our common stock in lieu of a meeting of stockholders.
On April 21,
2020, the record date for determining the identity of stockholders who are entitled to receive this Information Statement (the
“Record Date”), we had:
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(i)
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1,002,860,820 shares of common stock issued and outstanding, and
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(ii)
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2,000,000 shares of preferred stock Series A, par value $0.001 per share (the “The Series A preferred stock”), and
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(iii)
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2,541,500 shares of preferred stock Series B, par value $0.001 per share (the “The Series B preferred stock”), issued or outstanding.
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These
securities constitute the outstanding classes of Sugarmade, Inc.’s voting securities, as follows:
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(i)
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Each share of common stock entitles the
holder thereof to one vote on all matters submitted to stockholders.
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(ii)
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Each share of Series A preferred stock entitles
the holder thereof to zero votes on all matters submitted to stockholders.
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(iii)
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Each share of Series B preferred stock entitles
the holder thereof to one thousand (1,000) votes on all matters submitted to stockholders.
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NO VOTE OR OTHER CONSENT
OF OUR STOCKHOLDERS IS SOLICITED IN CONNECTION WITH THIS INFORMATION STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
On April
21, 2020, our board of directors approved the Common Share Increase. No other corporate actions to be taken by written consent
were considered.
As of
April 21, 2020, Jimmy Chan (the “Majority Voting Stockholder”) who beneficially holds in the aggregate voting power
equal to 2,519,063,502 shares, or approximately 71.07% of the voting power of our outstanding voting securities, had executed and
delivered to the board of directors a written consent approving the action to effect the Common Share Increase (the “Written
Consent”). Because the action was approved by the Written Consent of our Majority Stockholder of our outstanding voting securities,
no proxies are being solicited with this Information Statement. A form of the amendment to our Amended and Restated Certificate
of Incorporation is attached hereto.
We are not aware
of any substantial interest, direct or indirect, by security holders or otherwise, that is in opposition to matters of action being
taken. In addition, pursuant to the General Corporation Law of the State of Delaware (the “DGCL”), the action to be
taken by majority written consent in lieu of a special stockholder meeting does not create appraisal or dissenters’ rights.
Our board of
directors determined to pursue stockholder action by majority written consent of those shares entitled to vote to reduce the costs
and management time required to hold a special meeting of stockholders and to implement the above action in a timely manner.
Under Section 14(c)
of the Exchange Act, actions taken by written consent without a meeting of stockholders cannot become effective until 20 days
after the definitive information statement is mailed to stockholders, or as soon thereafter as is practicable. We are not seeking
written consent from any stockholders other than as set forth above and our other stockholders will not be given an opportunity
to vote with respect to the actions taken. All necessary corporate approvals have been obtained, and this Information Statement
is furnished solely for the purpose of advising stockholders of the actions taken by written consent and giving stockholders advance
notice of the actions taken.
FORWARD-LOOKING
INFORMATION
This Information
Statement contains statements not purely historical and which may be considered forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange
Act, including statements regarding our expectations, beliefs, future plans and strategies, anticipated events or trends concerning
matters that are not historical facts or that necessarily depend upon future events. In some cases, you can identify forward-looking
statements by terms such as “may,” “will,” “should,” “could,” “would,”
“expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,”
“predict,” “potential,” and similar expressions. This Information Statement contains, among others, forward-looking
statements based upon current expectations that involve numerous risks and uncertainties, including those described in our quarterly
report on Form 10-Q for the most recently ended quarterly period and in our other public filings.
Investors are
cautioned that any such forward-looking statements are not guarantees of future performance, involve risks and uncertainties and
that actual results may differ materially from those possible results discussed in the forward-looking statements as a result of
various factors.
Do not place undue reliance on such
forward-looking statements as they speak only as of the date they are made. Except as required by law, we assume no obligation
to publicly update or revise any forward-looking statement even if experience or future changes make it clear that any projected
results expressed or implied therein will not be realized.
COMMON SHARE
INCREASE
Our
board of directors and Majority Stockholder approved on April 21, 2020 an increase to the number of common shares of the corporation
from 1,990,000,000 to 10,000,000,000. The effective date of the Common Share Increase will be established by our board, which we
anticipate will be on or about May 25, 2020.
Except
as otherwise provided by the DGCL or our Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”),
and subject to the rights of holders of any series of preferred stock, the voting power of our stockholders is vested in the holders
of the common stock and in the holders of Series B preferred stock. Each share of common stock entitles the holder thereof to one
vote for each share held by such holder on all matters voted upon by our stockholders and each shares of the Series B preferred
stock entitles the holder thereof to 1,000 votes for each share held by such holder on all matters voted upon by our stockholder;
provided, however, that, except as otherwise required by law, holders of common stock, as such, shall not be entitled to vote on
any amendment to the Certificate of Incorporation (including any certificate of designation relating to any series of preferred
stock) that relates solely to the terms of any outstanding series of preferred stock if the holders of such affected series are
entitled, either
separately or together with the holders of one or more
other such series, to vote thereon pursuant to the Certificate of Incorporation (including any certificate of designation relating
to any series of preferred stock) or pursuant to the DGCL. Except as otherwise required by law or expressly provided in the Certificate
of Incorporation, each share of common stock has the same powers, rights and privileges and
ranks equally, shares ratably and is identical in all respects as to all matters. Subject to the rights of the holders of any preferred
stock and to the other provisions of applicable law and the Certificate of Incorporation, holders of common stock are entitled
to receive equally, on a per share basis, such dividends and other distributions in cash, securities or other property of ours
if, as and when declared thereon by the board of directors from time to time out of our assets or funds legally available therefor.
Subject to the rights of holders of any preferred stock, in the event of any liquidation, dissolution or winding up of the affairs
of us, whether voluntary or involuntary, after payment or provision for payment of our debts and any other payments required by
law and amounts payable upon shares of any preferred stock ranking senior to the shares of common stock upon such dissolution,
liquidation or winding up, if any, the remaining net assets of us shall be distributed to the holders of shares of common stock
and the holders of shares of any other class or series ranking equally with the shares of common stock upon such dissolution, liquidation
or winding up, equally on a per share basis.
Amendment
to Certificate of Incorporation
In connection
with the Common Share Increase, we will file with the State of Delaware an amendment to our Certificate of Incorporation to reflect
the increase in the number of authorized common shares. A form of this amendment is attached hereto. Thus:
Our
current authorized capitalization will change from 1,990,000,000 shares of common stock with a par value of $. 001
to 10,000,000,000 million shares of common stock with a par value of $.001.
Under the DGCL,
we are permitted to take an action without a meeting of stockholders if we obtain the written consent specifying the action from
stockholders holding at least a majority of the voting power of our common stock. Thus, the Common Share Increase and amendment
to our Certificate of Incorporation was approved on April 21, 2020 as follows:
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(a)
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the board of directors adopted a resolution setting forth the proposed
Common Shares Increase and filing with the State of Delaware an amendment to our Certificate of Incorporation setting forth the
Actions; and
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(b)
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the proposal was approved by the Written Consent of our Majority
Stockholder.
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The amendment to
our Certificate of Incorporation will reflect the Common Share Increase.
Effect
of the Common Share Increase
The Common
Share Increase will not affect any rights, privileges or obligations with respect to the shares of common stock existing prior
to the Common Share Increase, nor will it increase or decrease our market capitalization, except in the circumstances discussed
in the following paragraph. The number of stockholders will remain unchanged as a result of the Common Share Increase. The par
value of our common stock will remain unchanged.
Interests of Certain Persons in
Matters Acted Upon
As of the Record
Date, Jimmy Chan, the Majority Stockholder, and its affiliates beneficially owned approximately 72.83% of the voting rights relative
to all matters put forth to shareholders. Jimmy Chan is the Chief Executive Office of the Company and Chairman of the board of
Directs. Mr. Chan has the right to nominate for election to the board of directors or appoint to fill a vacancy on the board of
directors, as outlined in the Company’s Articles and bylaws.
Security Ownership of Certain Beneficial
Directors, Officers, Owners and Other Beneficial Owners
As of the date of this filing, information
with respect to the securities holdings of (i) our officers and directors, and (ii) all persons which, pursuant to filings with
the SEC and our stock transfer records, we have reason to believe may be deemed the beneficial owner of more than five percent
(5%) of the Common Stock.
The securities "beneficially owned"
by an individual are determined in accordance with the definition of "beneficial ownership" set forth in the regulations
promulgated under the Exchange Act and, accordingly, may include securities owned by or for, among others, the spouse and/or minor
children of an individual and any other relative who resides in the same home as such individual, as well as other securities as
to which the individual has or shares voting or investment power or which each person has the right to acquire within 60 days through
the exercise of options or otherwise. Beneficial ownership may be disclaimed as to certain of the securities. The below table has
been prepared based on the number of shares outstanding totaling 1,002,860,820 common shares.
Officers and Directors
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Amount and Nature of Beneficial Ownership
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Percentage of Class
Beneficially Owned
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Jimmy Chan
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2,519,063,502
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(1)
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71.07
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%(1)
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Christopher H. Dieterich
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0
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0.0
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%
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(2 Persons)
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Greater than 5% Shareholders
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Jimmy Chan
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2,519,063,502
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71.07
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%
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1)
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Includes 19,063,502 common shares, which yield 19,063,502 votes
for all matters put forth to shareholders and 2,500,000 Series B Preferred shares, which vote on all matters put forth to shareholders
at a ratio of 1,000 votes for each share of Series B preferred held. Thus, Mr. Chan’s voting power total 2,519,063,502 common
share equivalents consisting of 19,063,502 relative to common shares ownership and 2,500,000,000 votes relative to Mr. Chan’s
Series B preferred ownership.
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WHERE YOU CAN
FIND MORE INFORMATION
The SEC maintains a website that contains reports,
proxy and information statements and other information regarding us and other issuers that file electronically with the SEC at
. Our quarterly reports on Form 10-Q and other current reports, as well as any amendments to those reports, are available free
of charge through the SEC’s website.
EFFECTIVE DATE
Pursuant
to Rule 14c-2 under the Exchange Act, the above action to effect the Common Share Increase will not be effective until a date
at least twenty (20) days after the date on which the definitive Information Statement
has been mailed to the stockholders. We anticipate that the actions contemplated hereby will be effected on or about the close
of business on May 25, 2020.
PROPOSALS BY
SECURITY HOLDERS
No stockholder proposals are included
in this Information Statement.
INCORPORATION
BY REFERENCE
The SEC allows
us to “incorporate by reference” into this Information Statement documents we file with the SEC. This means that we
can disclose important information to you by referring you to those documents. The information incorporated by reference is an
important part of this Information Statement, and information that we file later with the SEC will automatically update and supersede
this information.
Therefore, you
should check for reports that we may have filed with the SEC after the date of this Information Statement. We incorporate by reference
the following filings (except for information therein furnished to the SEC that is not deemed to be “filed” for purposes
of the Exchange Act):
The Company’s
Annual Report on Form 10-K;
The Company’s
Quarterly Reports on Form 10-Q for quarterly periods; and
The Company’s
other filings with the SEC, including those on Form 8-K.
You can obtain
the documents incorporated by reference in this Information Statement through the SEC at its website, www.sec.gov or by contacting
us at the above reference address.
Any statement
contained in a document incorporated or deemed to be incorporated by reference in this Information Statement will be deemed modified,
superseded or replaced for purposes of this Information Statement to the extent that a statement contained in this Information
Statement or in any subsequently filed document that also is or is deemed to be incorporated by reference in this Information Statement
modifies, supersedes or replaces such statement.
CONCLUSION
As
a matter of regulatory compliance, we are sending you this Information Statement that describes the purpose and effect of the above
actions. Your consent to the above action is not required and is not being solicited in connection with this action. This Information
Statement is intended to provide our stockholders information required by the rules and regulations of the Exchange Act.
WE ARE NOT
ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THE ATTACHED MATERIAL IS FOR INFORMATIONAL PURPOSES ONLY.
BY ORDER OF THE BOARD OF DIRECTORS
By: /s/ Jimmy Chan
Jimmy Chan
Chief Executive Officer and Chairman
Sugarmade (PK) (USOTC:SGMD)
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