SGMD Sugarmade Inc (PK)

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.

May 28, 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 28, 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 we are taking pursuant to Written Consent representing a majority of the voting power of our common and the preferred stock entitled to vote 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:

These securities constitute the outstanding classes of Sugarmade, Inc.’s voting securities, as follows:

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. 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 Third 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 Laws 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 Voting 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 Third Amended and Restated 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 share 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 Third Amended and Restated 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 Third Amended and Restated 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 Third Amended and Restated 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 Third Amended and Restated 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 Third Amended and Restated Certificate of Incorporation

In connection with the Common Share Increase, we will file with the State of Delaware an amendment to our Third Amended and Restated 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  $0.001 to 10,000,000,000 million shares of common stock with a par value of $0.001. 

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 Third Amended and Restated Certificate of Incorporation was approved on April 21, 2020 as follows:

The amendment to our Third Amended and Restated 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 his 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 directors. Jimmy 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.