8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 5, 2020

SUGARMADE, INC.

(Exact name of registrant as specified in its charter) 

Delaware	000-23446	94-3008888
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

750 Royal Oaks Dr., Suite 108 Monrovia, CA	91016
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (888) 982-1628

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Item 7.01 Regulation FD Disclosure.

On November 5, 2020, Sugarmade, Inc. (the “Company”) issued a press release announcing that in anticipation of the planned expansion of the BudCars cannabis delivery service (“BudCars”) into new territories, Sugarmade has undertaken an analysis of the efficacy of marketing spending relative to market size and population for the existing BudCars regional delivery footprint. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in the website is not a part of this Current Report on Form 8-K.

The Company is an investor in BudCars and joint operator of BudCars’ first operating location in Sacramento, California. During early 2020, the Company gained a 40% stake in BudCars and in the Sacramento delivery operations via the acquisition of a 40% stake in Indigo Dye Group (“Indigo”). Under the terms of the Company’s agreement with Indigo, the Company also acquired an option to purchase an additional 30% interest in Indigo, upon the closing of which would provide the Company with a 70% controlling interest. As of the date hereof, this option has not yet been exercised, the Company’s stake in Indigo remains at 40%, and there is no assurance that the Company will exercise the option to acquire an additional 30% interest in Indigo. However, since late May 2020, the Company has been actively involved in development of Indigo’s operations with power to direct the activities and significantly impact Indigo’s economic performance. The Company also has obligations to absorb losses and right to receive benefits from Indigo. As such, in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification 810-10-25-38A through 25-38J, Indigo is considered a variable interest entity (VIE) of the Company.

The information included in Item 7.01 to this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information set forth under this Item 7.01 shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.	Description
99.1	Press release of the registrant dated November 5, 2020.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SUGARMADE, INC.
Date: November 5, 2020	By:	/s/ Jimmy Chan
	Name:	Jimmy Chan
	Title:	Chief Executive Officer and Chief Financial Officer

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EX-99.1

Exhibit 99.1

Sugarmade Announces Analysis of BudCars’ Marketing Activities and Expenditures Ahead of Planned BudCars Expansion

MONROVIA, CA, November 5, 2020, (GLOBE NEWSWIRE) -- via NetworkWire – Sugarmade, Inc. (OTCMKTS:SGMD) (“Sugarmade”, “SGMD”, or the “Company”) today announced that in anticipation of the planned expansion of the BudCars cannabis delivery service into new territories, Sugarmade has undertaken an analysis of the efficacy of marketing spending relative to market size and population for the existing BudCars regional delivery footprint. Sugarmade believes this may provide some insight into performance benchmarks and expectations related to the anticipated expansion into the North San Francisco Bay Area and the Wine Country counties, followed by Los Angeles.

Sugarmade is an investor in BudCars and joint operator of BudCars’ first operating location in Sacramento, California. During early 2020, Sugarmade gained a 40% stake in BudCars and in the Sacramento delivery operations via the acquisition of a 40% stake in Indigo Dye Group (“Indigo”). Under the terms of Sugarmade’s agreement with Indigo, Sugarmade also acquired an option to purchase an additional 30% interest in Indigo, upon the closing of which would provide Sugarmade with a 70% controlling interest. This option has not yet been exercised, Sugarmade’s stake in Indigo remains at 40%, and there is no assurance that Sugarmade will exercise the option to acquire an additional 30% interest in Indigo. However, since late May 2020, Sugarmade has been actively involved in development of Indigo’s operations, with power to direct the activities and significantly impact Indigo’s economic performance.

BudCars’ current territory serves an area comprised of a total population of 2.6 million residents in Northern California, with 16,252 customers (representing 0.6% of the total population) using BudCars to date in 2020, spending a total of $3.4 million on BudCars’ cannabis deliveries this year, with an average per-customer spend of $213, and an average order size of $129 across over 29,000 separate orders. BudCars has invested more heavily in marketing to residents of Sacramento, where 1.29% of residents have been active as BudCars customers this year, accounting for over half of total BudCars sales.

BudCars’ expected expansion over the next two months is anticipated to open up a regional footprint that may include as many as 20 million new residents with access to BudCars’ cannabis delivery service.

“We are very confident in the ROI associated with spending on BudCars marketing in connection with BudCars’ expansion,” remarked Jimmy Chan, CEO of Sugarmade. “We have seen at least a six-to-one multiple in terms of sales relative to marketing expenditure overall, with more than twice the market share and total sales where investments have focused more on cultivating new customers. We believe this bodes well for the marketing approach as BudCars enters the North Bay and LA Metro markets.”

About Sugarmade, Inc.

Sugarmade, Inc. (OTCMKTS:SGMD) is a product and branding marketing company investing in operations and technologies with disruptive potential. Our Brand portfolio includes CarryOutsupplies.com, SugarRush™ and Budcars.com. For more information please reference www.Sugarmade.com. Sugarmade is an investor in BudCars and joint operator of BudCars’ first operating location in Sacramento, California. During early 2020, Sugarmade gained a 40% stake in BudCars and in the Sacramento delivery operations via the acquisition of a 40% stake in Indigo Dye Group (“Indigo”). Under the terms of Sugarmade’s agreement with Indigo, Sugarmade also acquired an option to purchase an additional 30% interest in Indigo, upon the closing of which would provide Sugarmade with a 70% controlling interest. As of the date hereof, this option has not yet been exercised, Sugarmade’s stake in Indigo remains at 40%, and there is no assurance that Sugarmade will exercise the option to acquire an additional 30% interest in Indigo. However, since late May 2020, Sugarmade has been actively involved in development of Indigo’s operations with power to direct the activities and significantly impact Indigo’s economic performance. Sugarmade also has obligations to absorb losses and right to receive benefits from Indigo. As such, in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification 810-10-25-38A through 25-38J, Indigo is considered a variable interest entity (VIE) of Sugarmade.

Forward-Looking Statements

This press release includes certain information that may constitute forward-looking statements. Forward-looking statements are typically identified by terminology such as “could,” “may,” "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," “proposed,” “planned,” “potential” and similar expressions, or are those, which, by their nature, refer to future events. All statements, other than statements of historical fact, included herein, including statements about Sugarmade's beliefs and expectations, are forward-looking statements. Forward-looking information is necessarily based upon a number of assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Although Sugarmade believes that such statements are reasonable, it can give no assurance that such forward-looking information will prove to be accurate. Sugarmade cautions investors that any forward-looking statements it makes are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors. Accordingly, due to the risks, uncertainties and assumptions inherent in forward-looking information, readers and prospective investors in Sugarmade’s securities should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof, and is based upon the opinions and estimates of management and information available to management as at the date hereof and is subject to change. Sugarmade assumes no obligation to revise or update forward-looking information to reflect new circumstances, whether as a result of new information, future events or otherwise, except as required by law.

Corporate Contact:

Jimmy Chan

+1-(888)-982-1628

info@Sugarmade.com

Public Relations:

Tiger Marketing & Branding Agency
info@TigerGMP.com

www.TigerGMP.com