Item 3.02 Unregistered Sales of Equity Securities
On September 20, 2017, CLS Holdings USA, Inc. (the “Company”) entered into an Exchange Agreement (the “First Exchange Agreement”), whereby it agreed to exchange a convertible promissory note in the original principal balance of $200,000 (the “April 2015 Note”) for 1,500,000 shares of its common stock, par value $0.001 per share (the “Common Stock”). The holder of the April 2015 Note had previously sold it for $105,219.18, which represented the balance due by the Company thereunder, to StarForce Media, Inc., an entity that is not affiliated with the Company. The exchange was accomplished pursuant to the exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), set forth in Section 3(a)(9) and Section 4(A)(2). The Common Stock issued in the exchange constitutes “restricted securities” under the Securities Act.
On September 25, 2017, CLS Holdings USA, Inc. (the “Company”) entered into an Exchange Agreement (the “Second Exchange Agreement”), whereby it agreed to exchange a convertible promissory note in the original principal balance of $200,000 (the “Old Main Note”) for up to 4,500,000 shares (the “Share”) of its Common Stock. Old Main Capital, LLC, the original holder of the Old Main Note, had previously sold it for $382,496.00, which amount is payable by the purchaser in six installments, pursuant to a note purchase agreement and assignment (the “Note Purchase Agreement”), and which amount may be reduced as provided in the Note Purchase Agreement between Old Main Capital, LLC and the purchaser. The balance due by the Company under the Old Main Note at the time of the Note Purchase Agreement was approximately $325,000. The Old Main Note was purchased by Andrew J. Glashow, as representative and nominee of certain buyers under an escrow agreement between Mr. Glashow and such buyers. The Company will issue a portion of the Shares to Mr. Glashow or the ultimate buyers, pro rata, as the payments are made to Old Main Capital, LLC under the Note Purchase Agreement. The exchange was accomplished pursuant to the exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), set forth in Section 3(a)(9) and Section 4(A)(2). The Common Stock issued in the exchange will constitute “restricted securities” under the Securities Act.
The First Exchange Agreement and Second Exchange Agreement are incorporated as Exhibits 10.1, and 10.2 respectively, to this Report and the summary description of the terms thereof contained herein is qualified in its entirety by reference to Exhibit 10.1, and 10.2.