• SEC Filings

On February 5, 2018 (the “Closing Date”), CLS Holdings USA, Inc. (“we,” “us,” “our,” “CLS,” or “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Darling Capital LLC (“Darling”), whereby Darling agreed to purchase a 8% Convertible Promissory Note of the Company in the aggregate principal amount of $550,000 (the“Note”) due, subject to the terms therein, eighteen (18) months from the date of issuance, for a purchase price of $500,000.

The Note bears interest at the rate of 8% per annum. Any overdue accrued and unpaid interest to be paid under the Note bear interest at the lesser of 15% per annum or the maximum rate permitted by applicable law. At any time prior to the 180^th day following the date of issuance, CLS may offer to prepay all or any portion of the principal amount of the Note and any accrued and unpaid interest by offering to pay the following amounts: (i) within the initial 30 days after the date of issuance: 110% multiplied by the principal amount then due plus accrued interest; (ii) from the 31^st day through the 60^th day after the date of issuance: 115% multiplied by the principal amount then due plus accrued interest; (iii) from the 61^st day through the 120^th day after the date of issuance: 120% multiplied by the principal amount then due plus accrued interest; and (iv) from the 121^st day through the 180^th day after the date of issuance: 125% multiplied by the principal amount then due plus accrued interest. Within two business days after receipt of CLS’ prepayment notice, the holder shall have the right to convert all or a portion of the amount proposed to be prepaid.

The Note is convertible at any time into shares of CLS common stock, at the option of the holder, at an initial conversion rate equal $0.3125 per share of common stock (the “Fixed Conversion Price”). Subject to certain exclusions, if CLS sells or issues its common stock or certain common stock equivalents at an effective price per share that is lower than the then applicable conversion price, the conversion price will be reduced to equal to such lower price. In the event of any event of default under the Note, the outstanding principal amount of the Note plus accrued but unpaid interest, multiplied by 115%, shall become immediately due and payable, payable in common stock and/or cash, at the election of the holder.

On the Closing Date, CLS also issued Darling a three year Common Stock Purchase Warrant (the“Warrant”) to purchase 400,000 shares of CLS common stock at an initial exercise price of $0.75 per share. We also granted Darling or its designees a commitment fee equal to 10% of the purchase price to enter into the Purchase Agreement and prepare all of the related transaction documents.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item.

Item 3.02Unregistered Sales of Equity Securities

The disclosure in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item.

Darling is a verified accredited investor (as that term is defined in Regulation D of theSecurities Act), and in issuing the above securities to Darling, we relied on and intend to rely on the exemption from the registration requirements of the Securities Act provided by Rule 506(c) of Regulation D promulgated thereunder.

Item 9.01Financial Statements and Exhibits

(d)Exhibits.

CLS Holdings USA, Inc. Exhibit
EX-10.1 2 ex10-1.htm EX-10.1 Exhibit 10.1   NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,…
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About CLS HOLDINGS USA, INC. (OTCMKTS:CLSH)

CLS Holdings USA, Inc., is engaged in developing a method of extracting cannabinoids from cannabis plants and converting the resulting cannabinoid extracts into concentrates. The Company’s concentrates include oils, waxes, edibles and shatter. These concentrates may be ingested in various ways, including through vaporization through electronic cigarettes (e-cigarettes), and used for a range of pharmaceutical and other purposes. The Company intends to monetize extraction method through the licensing of its methods and processes to others, as in the Colorado Arrangement; the processing of cannabis for others, and the purchase of cannabis and the processing and sale of cannabis-related products. The Company’s products and services include Licensing Operations, Processing Revenue, Processing Facilities and Sale of Products and Brand Creation. As of May 31, 2016, the Company had not generated any revenues.