CLS HOLDINGS USA, INC. (OTCMKTS:CLSH) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01Entry into a Material Definitive Agreement.

On May 11, 2018, CLS Holdings USA, Inc. (“we,” “us,” “our,” “CLS,” or “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with YA II PN, Ltd., a Cayman Island exempted limited partnership (the “Investor”), to which the Company agreed to sell to the Investor, in two closings, (i) convertible debentures (the “Debentures”) in the aggregate principal amount of $1,250,000, plus accrued interest, which may be converted into shares of our common stock (the “Conversion Shares”), par value $0.0001 per share (the “Common Stock”), at the discretion of either the Investor or the Company in accordance with the terms of the Debentures, and (ii) five-year warrants (the “Warrants”) to purchase an aggregate of 3,125,000 shares of our Common Stock at $0.60 per share of Common Stock. At the first closing, which occurred on May 14, 2018, we issued a $750,000 Debenture (the “First Debenture” to the Investor and a Warrant to purchase 1,875,000 shares of our Common Stock (the “First Warrant”). At the second closing, which occurred on July 20, 2018, we issued a $500,000 Debenture (the “Second Debenture) to the Investor and a Warrant to purchase 1,250,000 additional shares of our Common Stock (the “Second Warrant”).

The Debentures bear interest at the rate of 8% per annum. If an event of default occurs and for so long as such event of default remains uncured, the interest rate on the Debentures shall immediately become 15% per annum and shall remain at such increased interest rate until the applicable event of default is cured.

Commencing on December 1, 2018 and on the first day of each month thereafter through July 1, 2019 (each an “Installment Date”), the Company shall pay to the Investor one-eighth of the principal amount of the Debentures, plus accrued and outstanding interest (the “Installment Amount”), plus 20% of the of the Installment Amount for Installment Amounts due within 180 days following the date of execution of the Purchase Agreement, and 25% of the Installment Amount for Installment Amounts due thereafter in cash or by converting such Installment Amount into shares of Common Stock of the Company, if the Company has met the applicable conditions for such a conversion and as long as the conversion does not exceed certain maximum amounts.

to the terms of the Debentures, the Investor may elect to convert any portion of the principal and accrued interest under the Debentures into our Common Stock at a fixed conversion price of $0.40 per share. The fixed conversion price may change if certain dilutive events or issuances occur. In addition, the Company may, at its sole discretion, make an Installment Payment using its Common Stock if certain conditions have been met. In such case, the applicable conversion price would be equal to 75% of the VWAP of the Company’s Common Stock during the fifteen consecutive trading days immediately preceding such conversion.

In connection with our issuance of the Second Debenture and the Second Warrant, we also agreed to pay the Investor’s designee a commitment fee in an amount equal to 6% of the applicable purchase price. The shares of our Common Stock underlying the Second Debenture and Second Warrant are also subject to the registration rights agreement in favor of the Investor that we executed in connection with the Purchase Agreement.

The descriptions of the Purchase Agreement, the First Debenture, the First Warrant, the registration rights agreement, the Second Debenture, and the Second Warrant are qualified in their entirety by reference to the full text of the Purchase Agreement, the First Debenture, the First Warrant and the registration rights agreement, which have been filed as Exhibits 10.1, 10.2, 10.3, and 10.4, respectively, to the Company’s Current Report on Form 8-K filed on May 17, 2018, and the Second Debenture and the Second Warrant, which are attached as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

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.

The Investor is an accredited investor (as that term is defined in Regulation D of theSecurities Act), and in issuing the above securities to the Investor, we relied on and intend to rely on the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder because the securities were issued in a private offering.

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 THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE.  THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION 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.