Sugarmade, Inc. - FORM 8-K - September 25, 2013

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EX-3.2 - EX-3.2 - Sugarmade, Inc.	v355817_ex3-2.htm

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): September 25, 2013

SUGARMADE, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware

000-23446

94-300888

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

1536 Newell Ave

Walnut Creek, CA

94596

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (888)747-6233

(Former name or former address, if changed since last report)

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:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On September 18, 2013, the Board of Directors (the “Board”) of Sugarmade, Inc. (the “Company”) approved the compensation package outlined for CEO Clifton Leung and approved the issuance of the 2,500,000 restricted common shares. Clifton Leung is also President, Treasurer and a Director of the Company. The issuance of these securities was deemed to be exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(2) thereof, as a transaction by an issuer not involving a public offering. Clifton Leung is also CEO of Sugarcane Paper Company, which is the sole supplier of paper to the Company. He also holds a controlling interest in Sugarcane Paper Company.

On September 18, 2013, the Board of Directors approved a series of transactions, which will have the effect of significantly reducing the Company’s level of debt. These transactions remove approximately $591,071 of debt from the Company’s balance sheet. These transactions included the following:

On September 18, 2013, the Board approved the modification of the Convertible Promissory Note dated November 27, 2012 held in the name of Jonathan Leong to allow for conversion of the outstanding principal and interest due at a rate of Ten US Cents ($0.10) per share. Jonathan Leong is a Director and Secretary of the Company. Mr. Leong subsequently exercised the conversion option on the Convertible Promissory Note and will be issued 1,113,918 common shares pursuant to the Notice of Conversion, dated September 18, 2013. The conversion has resulted in a reduction of $111,318 of debt owned by the Company. The issuance of these securities was deemed to be exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(2) thereof, as a transaction by an issuer not involving a public offering.

On September 18, 2013, the Board approved the issuance of 1,057,534 common shares to our CEO, President, and Treasurer, Clifton Leung, pursuant to a settlement agreement dated September 20, 2013, allowing for the conversion of the $100,000 promissory note balance and $5,753.43 interest due at a rate of $0.10 per share. Mr. Leung is also a Director of the Company. This action has resulted in a reduction of $105,753 of debt owed by the Company. The issuance of these securities was deemed to be exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(2) thereof, as a transaction by an issuer not involving a public offering. Clifton Leung is also CEO of Sugarcane Paper Company, which is the sole supplier of paper to the Company. He also holds a controlling interest in Sugarcane Paper Company.

On September 18, 2013, the Board approved a settlement agreement between Sugarcane Paper Company and the Company dated on September 20, 2013, which converts the entire balance of principal and interest due on the August 1, 2013 and September 6, 2013 credit lines into 900,000 shares of common stock. Our CEO, President, and Treasurer, Clifton Leung, is also a Director of the Company, and is CEO of Sugarcane Paper Company and holds a controlling interest in Sugarcane Paper Company. Sugarcane Paper Company is the sole supplier of paper to the Company. This action has resulted in the reduction of approximately $90,000 of debt owed by the Company. The exact amount of debt reduction will be determined at a later date. The issuance of these securities was deemed to be exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(2) thereof, as a transaction by an issuer not involving a public offering.

On September 18, 2013, the Board approved a settlement agreement between Sugarcane Paper Company and the Company dated on September 20, 2013, which converts $284,000 of the balance of principal and interest due on the credit line, outstanding as of March 31, 2013, into 2,840,000 shares of common stock. Our CEO, President, and Treasurer, Clifton Leung, is also a Director of the Company, and is CEO of Sugarcane Paper Company and holds a controlling interest in Sugarcane Paper Company. Sugarcane Paper Company is the sole supplier of paper to the Company. The remaining balance of principal plus interest in excess of $284,000 remains outstanding. The Company believes this settlement removes the vast majority of the outstanding production credit line owed by the Company to Sugarcane Paper Company. At this time, the exact outstanding balance owed by the Company to Sugarcane Paper Company has not been determined. The issuance of these securities was deemed to be exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(2) thereof, as a transaction by an issuer not involving a public offering.

Item 5.02. Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 18, 2013, The Board approved the appointment Clifton Leung as of July 19, 2013, as the Chief Executive Officer, President, and Treasurer. Clifton Leung is also a Director. The Board approved the contract for management services with Clifton Leung, acting as Chief Executive Officer, President, and Treasurer of the Company. The services contract, which has a term of six months and is renewable at the discretion of the Board of Directors, calls for no monthly or annual salary and compensation in the form of 2,500,000 restricted common shares for the contract period. Clifton Leung is also CEO of Sugarcane Paper Company, which is the sole supplier of paper to the Company. He also holds a controlling interest in Sugarcane Paper Company.

On September 18, 2013, The Board approved the appointment of Jonathan Leong as Corporate Secretary of the Company. Mr. Leong is also a Director of the Company.

Item 5.03. Amendments to Articles of Incorporation or Bylaws;

On September 18, 2013, the Board of Directors adopted an amendment to the Amended and Restated Bylaws of the Company (as so amended, the "Bylaws"), effective immediately upon adoption, to supersede and replace the existing bylaws of the Company.

A summary of the changes are as follows:

ARTICLE I MEETINGS OF STOCKHOLDERS Section 2. Special Meetings, which had read as follows,

Section 2. Special Meetings. Special meetings of the stockholders, unless otherwise prescribed by statute, may be called at any time by the Board of Directors or the President and shall be called by the President or Secretary at the request in writing of stockholders of record owning at least twenty-five per centum (25%) of the shares of stock of the Corporation outstanding and entitled to vote.

Has been amended to read as follows:

Section 2. Special Meetings. A special meeting of the stockholders may be called at any time by the Board, Chairman of the Board, Chief Executive Officer or President (in the absence of a Chief Executive Officer) or by one or more stockholders holding shares in the aggregate entitled to cast not less than 25% of the votes at that meeting.

If any person(s) other than the Board calls a special meeting, the request shall:

(i) be in writing;

(ii) specify the time of such meeting and the general nature of the business proposed to be transacted; and

(iii) be delivered personally or sent by registered mail or by facsimile transmission to the Chairman of the Board, the Chief Executive Officer, the President (in the absence of a Chief Executive Officer) or the Secretary of the Corporation.

The officer(s) receiving the request shall cause notice to be promptly given to the stockholders entitled to vote at such meeting, in accordance with these bylaws, that a meeting will be held at the time requested by the person or persons calling the meeting. No business may be transacted at such special meeting other than the business specified in such notice to stockholders. Nothing contained in this paragraph of this Section 2 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.

ARTICLE II BOARD OF DIRECTORS Section 7. Notice of Meetings, which had read as follows,

Section 7. Notice of Meetings. Notice of each special meeting of the Board of Directors (and of each regular meeting for which notice shall be required) shall be given by the Secretary as hereinafter provided in this Section 7, in which notice shall be stated the time and place of the meeting. Notice of each such meeting shall be delivered to each director either personally or by telephone, telegraph cable or wireless, at least twenty-four hours before the time at which such meeting is to be held or by first-class mail, postage prepaid, addressed to him at his residence, or usual place of business, at least three days before the day on which such meeting is to beheld. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to him. Except as otherwise specifically required by these By-Laws, a notice or waiver of notice of any regular or special meeting need not state the purpose of such meeting.

Has been amended to read as follows:

Section 7. Notice of Meetings. Notice of each special meeting of the Board of Directors (and of each regular meeting for which notice shall be required) shall be given by the Chairman of the Board, the Chief Executive Officer, the President, the Secretary, or any director as hereinafter provided in this Section 7, in which notice shall be stated the time and place of the meeting. Notice of each such meeting shall be delivered to each director either personally or by telephone, telegraph cable or wireless, at least twenty-four hours before the time at which such meeting is to be held or by first-class mail, postage prepaid, addressed to him at his residence, or usual place of business, at least three days before the day on which such meeting is to beheld. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to him. Except as otherwise specifically required by these By-Laws, a notice or waiver of notice of any regular or special meeting need not state the purpose of such meeting.

ARTICLE II BOARD OF DIRECTORS Section 14. Action Without Meeting, which had read as follows,

Section 14. Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

Has been amended to read as follows:

Section 14. Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors be taken without a meeting if all members of the Board of Directors consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III COMMITTEES - Section 1. Committees, which had read as follows,

Section 1. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.