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

Amendment to Letter of Intent

As previously reported, on September 13, 2018, we entered into a non-binding letter of intent (the “CannAssist LOI”) with CannAssist, LLC, a Massachusetts limited liability company (“CannAssist”), setting forth the terms and conditions upon which we propose to form an 80/20 joint venture with CannAssist, of which we would own 80%. CannAssist plans to build out a recreationally licensed cultivation grow facility in Leicester, Massachusetts (the “Leicester Facility”). The planned Leicester Facility is in possession of its host community agreement and has applied for a recreational license and is awaiting state approval. We intend to use a portion of the net proceeds of our 2018 Convertible Debenture Offering to fund construction activities at the Leicester Facility. We have not entered into any definitive agreements regarding the transactions contemplated by the CannAssist LOI, and there is no guarantee that these transactions will close.

On November 7, 2018, we amended the CannAssist LOI to extend the termination date to January 15, 2019 and further amended it effective January 15, 2019 to extend the termination date to July 1, 2019.

Loan Transaction

On January 29, 2019, the Company made a line of credit loan to CannAssist, in the principal amount of up to $500,000, subject to the terms and conditions set forth in that certain Loan Agreement, dated as of January 29, 2019 between CannAssist as the Borrower and the Company as the Lender (the “Loan Agreement”). Any draws on the line of credit in excess of $150,000 will only be made in the sole discretion of the Company. The Loan is evidenced by a secured promissory note of CannAssist (the “Note”), which bears interest at the rate of 8% per annum and is personally guaranteed by the two equity owners of CannAssist. Assuming we proceed with the joint venture, it is contemplated that this loan will be rolled into longer term financing and the personal guarantees will be extinguished. If we do not enter into the joint venture, payments on the loan will commence on July 1, 2019 and the Note will mature on December 1, 2019.

To secure the obligations of CannAssist to the Company under the Loan Agreement and the Note, the Company and CannAssist entered into a Security Agreement dated as of January 29, 2019 (the “Security Agreement”), to which CannAssist granted to the Company a first priority lien on and security interest in all personal property of CannAssist.

The description of the Loan Agreement, the Note and the Security Agreement is qualified in its entirety by reference to the full text of these documents that have been filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

CLS Holdings USA, Inc. Exhibit
EX-10.1 2 ex_133959.htm EXHIBIT 10.1 ex_133959.htm     Exhibit 10.1   LOAN AGREEMENT   THIS LOAN AGREEMENT (the “Agreement”),…
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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.