SGMD Sugarmade Inc (CE)

Item 5.07. Submission of Matters to a Vote of Security Holders.

On December 16, 2021, Mr. Chan, who holds a majority of the voting power of the Company’s issued and outstanding capital stock, acting by written consent, approved the Amendment. Mr. Chan is the Company’s Chief Executive Officer, Chairman, principal financial officer and principal accounting officer. In addition to other securities of the Company, Mr. Chan holds one share of the Company’s Series C preferred stock, $0.001 par value per share (the “Series C Preferred”), which has a number of votes at any time equal to (i) the number of votes then held or entitled to be made by all other equity securities of the Company, including, without limitation, the common stock, debt securities of the Company or pursuant to any other agreement, contract or understanding of the Company, plus (ii) one. The Series C Preferred votes on any matter submitted to the holders of the common stock, or any class thereof, for a vote, and votes together with the common stock, or any class thereof, as applicable, on such matter for as long as the share of Series C Preferred is issued and outstanding. As a result of Mr. Chan’s share of Series C Preferred, Mr. Chan holds a majority of the voting power of the Company’s issued and outstanding capital stock.

Also on December 16, 2021, Mr. Chan, acting by written consent, approved an amendment to the Certificate of Incorporation that, if filed, would effect a reverse stock split of the outstanding shares of the Company’s common stock, by a ratio of 1-for-200, with any fractional shares being rounded up to the next higher whole share (the “Reverse Stock Split”). The Reverse Stock Split is subject to clearance by the Financial Industry Regulatory Authority (“FINRA”), and the Company will not effect the Reverse Stock Split until it is cleared by FINRA. The Board retains the authority to abandon the Reverse Stock Split for any reason at any time prior to effecting the Reverse Stock Split.