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~~January 1431, ~~2022~~2023

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 15.0102. ~~Entry~~Departure ~~into~~of aDirectors ~~Material~~or ~~Definitive~~Certain ~~Agreement~~Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January ~~November 14~~31, ~~2022~~2023, ~~Sugarmade, Inc., a Delaware corporation (~~the ~~“Company”)~~Board ~~entered~~of ~~into~~Directors ~~a securities purchase agreement~~ (the “~~SPA~~Board”) ~~with~~of ~~Mast Hill Fund~~Sugarmade, LInc.~~P., a~~ ~~Delaware limited partnership~~ (the “~~Holder”), pursuant to which the~~ Company ~~issued an 8% promissory note (the “Note~~”) ~~with~~ aincreased ~~maturity date of November 14, 2023 (~~the ~~“Maturity Date”), in the principal sum of $532,000 (the “Principal Sum”).~~size ~~In addition, the Company issued a common stock purchase warrant for the purchase~~ of ~~up to 1,773,333,333 shares of~~ the ~~Company’s common~~Board ~~stock~~from ~~(the~~two ~~“Warrant”)~~ to ~~the~~three ~~Holder~~persons ~~pursuant~~and toappointed ~~the~~Jamie ~~SPA.~~Steigerwald ~~Pursuant~~as toa ~~the~~member ~~terms~~ of the ~~Note,~~Board ~~the Company agreed~~ to ~~pay the~~fill ~~Principal Sum to~~ the ~~Holder~~vacancy ~~and~~created toby ~~pay interest on~~ the ~~principal balance at the rate of 8% per annum. The Note carries an original~~increase ~~issue discount (“OID”)~~ of ~~$53,200. Accordingly, on~~ the ~~Closing~~size ~~Date (as defined in the SPA), the Holder paid the purchase price~~ of ~~$478,800 in exchange for~~ the ~~Note and Warrant~~Board. The ~~Holder~~Board ~~may~~also ~~convert~~appointed ~~the~~Mr. ~~Note~~Steigerwald ~~into~~as the Company’s ~~common~~Chief ~~stock~~Operating ~~(the~~Officer ~~“Common Stock”),~~on atJanuary ~~any time at a conversion price equal to $0.0001 per share~~31, subject to adjustment as provided in the Note (including but not limited to certain price protection provisions in case of future dilutive offerings) as well as certain beneficial ownership limitations2023.

~~The~~Mr. ~~Company~~Steigerwald, ~~may~~age ~~prepay~~51, ~~the~~is ~~Note~~a atseasoned ~~any~~entrepreneur ~~time~~with ~~prior~~three todecades of experience. He joined Nug Avenue as its Chief Marketing Officer in January 2021 and played a key role in Nug Avenue’s growth during the ~~date~~COVID ~~that~~pandemic. anIn ~~Event~~February of2022, ~~Default~~Jamie (was appointed as the ~~defined~~Company’s General Manager. Before entering the cannabis industry, Mr. Steigerwald worked in the ~~Note)~~real ~~(each~~estate anand ~~“Event~~mortgage ofsector, ~~Default”)~~eventually ~~occurs~~starting athis anown ~~amount~~mortgage ~~equal~~brokerage toin 2003. However, following the ~~Principal~~2008 ~~Sum~~mortgage ~~then~~crisis, ~~outstanding~~he ~~plus~~shifted ~~accrued~~his focus to consulting and ~~unpaid~~became ~~interest~~a ~~(no~~principal ~~prepayment~~in ~~premium) plus~~various ~~$750~~industries, specializing in marketing, sales, and operations.00 ~~for~~Since ~~administrative~~July ~~fees~~2012, Mr. ~~The~~Steigerwald ~~Note~~has owned ~~contains~~SwiftLead, ~~customary~~Inc., ~~events~~a ofsales, ~~default~~business ~~relating~~operations and marketing consulting firm. From July 2017 to March 2020, ~~among~~he ~~other~~owned ~~things~~3JE, ~~payment defaults~~Inc., ~~breach~~an ofAT&T ~~representations~~Direct TV and ~~warranties~~cell phone reseller, and ~~breach~~from ofFebruary ~~provisions~~2019 ofto ~~the~~December ~~Note~~2019, ~~Warrant~~he owned ESSRW, orInc., ~~SPA~~an equestrian equipment manufacturer and repairer.

~~Upon~~On ~~the~~January ~~occurrence~~31, ~~of any Event of Default~~2023, the ~~Note~~Company ~~shall~~entered ~~become~~into ~~immediately~~an ~~due~~Executive ~~and~~Employment ~~payable~~Agreement ~~and~~ (the ~~Company shall pay to the Holder~~“Agreement”), ~~in full~~by ~~satisfaction~~and ofbetween ~~its obligations hereunder, an amount equal to~~ the ~~Principal Sum then outstanding plus accrued interest multiplied~~Company byand ~~150%~~Mr. ~~(the “Default Amount”)~~Steigerwald. ~~Upon~~The ~~the~~term ~~occurrence~~ of anthe ~~Event~~Agreement ~~of Default, additional interest~~ will ~~accrue~~continue from ~~the~~year ~~date of~~to ~~the~~year, ~~Event~~with ofautomatic ~~Default~~renewal, atunless ~~the~~terminated ~~rate~~earlier ~~equal~~ pursuant to the ~~lower~~terms of ~~16% per annum or~~ the ~~highest rate permitted by law~~Agreement.

~~The~~In ~~Warrant~~exchange isfor ~~exercisable~~his ~~for~~services, ~~five~~the ~~years~~Company ~~from~~agreed ~~November~~to ~~14,~~pay ~~2022,~~Mr. atSteigerwald an ~~exercise~~annual ~~price~~base salary of $~~0.0003~~60,000 ~~per~~and ~~share~~a ~~(the~~sign-up ~~“Exercise~~bonus ~~Price”)~~of 250,000 ~~subject~~shares toof ~~adjustment~~Series asB ~~provided~~preferred instock, ~~the~~with ~~Warrant.~~a ~~The~~market ~~Warrant~~value ~~also~~of ~~contains~~approximately ~~certain~~$50,000 ~~cashless~~as ~~exercise~~of ~~provisions~~the asdate ~~well~~hereof. asIn ~~price~~lieu ~~protection~~of payment of Mr. Steigerwald’s ~~provisions~~base ~~providing~~salary, ~~for~~Mr. ~~adjustment~~Steigerwald ofmay ~~the~~convert ~~number~~any ofor ~~shares~~all ofunpaid ~~Common~~base ~~Stock~~salary ~~issuable~~due ~~upon~~and ~~exercise~~owing into shares of the ~~Warrants~~Company’s ~~and~~common ~~the~~stock at ~~Exercise~~any ~~Price in~~time. ~~case~~Mr. ofSteigerwald ~~future~~is ~~dilutive~~also ~~offerings.~~eligible ~~Notwithstanding~~to ~~the~~receive ~~foregoing,~~an ~~the~~annual ~~adjustment~~bonus toin the ~~number~~sole ofand ~~shares~~absolute discretion of ~~Common~~the ~~Stock~~Board. ~~issuable~~Also, Mr. ~~due~~Steigerwald is eligible to receive a ~~dilutive~~bonus ~~offering~~for ~~will~~acquisitions ~~only~~of ~~apply~~entities ifrelated anto ~~Event~~the Company’s business. The Board has established a target of ~~Default~~5% ~~occurs~~to ~~under~~15% of the ~~Note~~acquisition value.

The ~~Company’s~~Agreement ~~obligations~~may ~~under~~be ~~the~~terminated ~~Note are guaranteed~~ by ~~Lemon~~either ~~Glow~~the Company, ~~Inc~~or Mr., aSteigerwald ~~California~~at ~~corporation~~any ~~(“Lemon”)~~ time and ~~subsidiary~~for ofany ~~the~~reason ~~Company,~~with ~~pursuant~~at toleast ~~that~~30 ~~certain~~days’ ~~guaranty~~advance written ~~dated~~notice. ~~November~~Upon 14termination, ~~2022 (the “Guaranty”)~~Mr. ~~Pursuant~~Steigerwald towill ~~the Guaranty,~~be ~~the~~entitled ~~Company’s~~to ~~obligations~~certain ~~under~~compensation ~~the~~as ~~Note~~described ~~are~~in ~~secured by all of~~ the ~~assets of Lemon, excluding the property located at 8895 High Valley Road, Clearlake Oaks, CA 95423~~Agreement.

~~The~~If ~~SPA~~Mr. ~~contains~~Steigerwald’s ~~customary~~employment ~~representations,~~is ~~warranties,~~terminated ~~and~~by ~~covenants of~~ the Company, ~~including,~~for ~~among~~Cause ~~other~~(as ~~things~~defined ~~and~~in ~~subject to certain exceptions, covenants that restrict~~ the ~~ability~~Agreement) ofor ~~the~~by ~~Company to enter into variable rate transactions~~Mr. ~~Pursuant~~Steigerwald ~~to the SPA, the Holder~~without ~~also~~Good ~~has~~Reason ~~certain~~(as ~~participation~~defined ~~rights~~ in ~~certain future equity and debt offerings by~~ the ~~Company~~Agreement), ~~until~~Mr. ~~the~~Steigerwald ~~date~~will ~~that~~be ~~the~~entitled ~~Note~~to isreceive ~~extinguished as~~(collectively ~~well~~referred ~~as piggy-back registration rights with respect~~ to ~~the~~as ~~Common Stock into which~~ the ~~Note is convertible and Warrant is exercisable.~~“Accrued Amounts”):

~~The foregoing~~ ~~descriptions~~(i) ofany ~~the~~accrued ~~Warrant,~~but ~~Note,~~unpaid ~~SPA,~~base ~~and~~salary ~~Guaranty do not purport to be complete~~ and ~~are~~accrued ~~qualified~~but inunused its entirety by reference to the full text of the Warrant, Note, SPA, and Guaranty, copies of which are filed herewith as Exhibits 4.1, 10.1, 10.2, and 10.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.vacation;

~~Item~~(ii) any 2earned but unpaid annual bonus as provided in the Agreement; provided that, if Mr.~~03.~~ ~~Creation~~Steigerwald’s ofemployment ais ~~Direct~~terminated ~~Financial~~by the ~~Obligation~~Company orfor anCause, ~~Obligation~~then ~~under~~any ansuch ~~Off-Balance~~accrued ~~Sheet~~but ~~Arrangement~~unpaid ofannual abonus ~~Registrant~~will be forfeited;

~~To the extent required by~~(iii) ~~Item~~reimbursement ~~2.03~~for ofunreimbursed ~~Form~~business ~~8-K,~~expenses ~~the~~properly ~~information~~incurred ~~contained~~by ~~in Item 1~~Mr.~~01 of~~ ~~this~~Steigerwald; ~~Current Report on Form 8-K is incorporated herein by reference.~~and

~~Item~~(iv) such 3employee benefits (including equity compensation), if any, to which Mr.02 ~~Unregistered~~Steigerwald ~~Sales~~may be entitled under the Company’s employee benefit plans pro rata as of ~~Equity~~the ~~Securities~~termination date; provided that, in no event shall Mr. Steigerwald be entitled to any payments in the nature of severance or termination payments except as specifically provided in the Agreement.

ToMr. Steigerwald’s employment may be terminated on account of the ~~extent~~Company’s ~~required~~failure byto renew the Agreement as provided therein; ~~Item~~by 3Mr.02 Steigerwald for Good Reason; or by the Company without Cause. In the event of ~~Form~~such ~~8-K~~termination, Mr. Steigerwald will be entitled to receive the ~~information~~Accrued ~~contained~~Amounts ~~in Item~~and, ~~1.01~~ subject to the terms of ~~this~~the ~~Current~~Agreement, ~~Report~~a onlump ~~Form~~sum ~~8-K~~payment isequal ~~incorporated~~to ~~herein~~one byyear ~~reference~~of Mr. Steigerwald’s base salary and target bonus for the year in which the termination date occurs.

~~Item~~If 9Mr.01 Steigerwald’s employment is terminated on account of Mr. ~~Financial~~Steigerwald’s ~~Statements~~death or Disability (as defined in the Agreement), Mr. Steigerwald (or Mr. Steigerwald’s estate and/or ~~Exhibits~~beneficiaries, as the case may be) will be entitled to receive (i) the Accrued Amounts; and (ii) a lump sum payment equal to the pro-rata bonus/annual bonus, if any, that Mr. Steigerwald would have earned for the fiscal year in which the termination date occurs based on the achievement of applicable performance goals for such year.

If Mr. Steigerwald’s employment is terminated by Mr. Steigerwald for Good Reason or by the Company on account of its failure to renew the Agreement as provided in the Agreement, or without Cause (dother than on account of Mr. Steigerwald’s death or Disability), ~~Exhibits~~in each case within 24 months following a Change in Control (as defined in the Agreement), Mr. Steigerwald will be entitled to receive the Accrued Amounts and, subject to the terms of the Agreement, the following: (i) a lump sum payment equal to two times the sum of Mr. Steigerwald’s base salary and target bonus for the year in which the termination date occurs (or if greater, the year immediately preceding the year in which the Change in Control occurs); and, (ii) a lump sum payment equal to Mr. Steigerwald’s target bonus for the fiscal year in which the termination date occurs (or if greater, the year in which the Change in Control occurs).

Exhibit No.		Description
4.1		Common Stock Purchase Warrant, dated as of November 14, 2022, by and between Sugarmade, Inc. and Mast Hill Fund, L.P.
10.1		Promissory Note, dated as of November 14, 2022, by and between Sugarmade, Inc. and Mast Hill Fund, L.P.
10.2		Securities Purchase Agreement, dated as of November 14, 2022, by and between Sugarmade, Inc. and Mast Hill Fund, L.P.
10.3		Guaranty, dated as of November 14, 2022, by and between Lemon Glow Company, Inc. and Mast Hill Fund, L.P.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

Notwithstanding the terms of any equity incentive plan or award agreements, as applicable:

~~SIGNATURES~~(i) all outstanding unvested stock options or stock appreciation rights granted to Mr. Steigerwald during the term of the Agreement will become fully vested and exercisable for the remainder of their full term;

~~Pursuant~~(ii) all outstanding equity-based compensation awards other than stock options or stock appreciation rights that are not intended to ~~the~~qualify as ~~requirements~~performance-based compensation under Section 162(m)(4)(C) of the ~~Securities~~Internal ~~Exchange~~Revenue ~~Act~~Code of ~~1934~~1986, as amended (the ~~registrant~~“Code”), will ~~has~~become ~~duly~~fully ~~caused~~vested ~~this~~and ~~report~~the torestrictions bethereon ~~signed~~will onlapse; ~~its~~provided ~~behalf~~that, byany delays in the settlement or payment of such awards that are set forth in the ~~undersigned~~applicable ~~hereunto~~award ~~duly~~agreement ~~authorized.~~and that are required under Section 409A shall remain in effect; and,

	SUGARMADE, INC.
Date: November 18, 2022	By:	/s/ Jimmy Chan
	Name:	Jimmy Chan
	Title:	Chief Executive Officer

(iii) all outstanding equity-based compensation awards other than stock options and stock appreciation rights that are intended to constitute performance-based compensation under Section 162(m)(4)(C) of the Code will remain outstanding and will vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals are satisfied.

The Employment Agreement contains customary representations and warranties.

The foregoing description of the Agreement is qualified in its entirety by reference to the Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit

No.

Description

10.1

Employment Agreement, dated January 31, 2023, by and between the registrant and Jamie Steigerwald.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

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: February 13, 2023	By:	/s/ Jimmy Chan
	Name:	Jimmy Chan
	Title:	Chief Executive Officer

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