CLSH CLS Holdings USA Inc (QB)

Item 1.01            Entry into a Material Definitive Agreement.

Between August 8, 2018 and August 10, 2018, CLS Holdings USA, Inc. (“we,” “us,” “our,” “CLS,” or the “Company”) entered into five Subscription Agreements (each a “Subscription Agreement” and, collectively, the “Subscription Agreements”), pursuant to which the Company agreed to sell, for an aggregate purchase price of $2,750,000, 6,875,000 Units ($0.40 per Unit), representing (i) 6,875,000 shares of our common stock, par value $0.0001 per share (the “Common Stock”), and (ii) three-year warrants (the “Warrants”) to purchase an aggregate of 6,875,000 shares of our Common Stock (the “Warrant Shares”) at an exercise price of $0.60 per share of Common Stock.  The parties to the Subscription Agreements (each an “Investor” and, collectively, the “Investors”) and their respective purchase amounts are: Ionic Ventures, LLC (625,000 Units), Navy Capital Green Management, LLC (“Navy Capital”), as nominee for the Thomas K. Ireland 2003 Revocable Trust (1,250,000 Units), Navy Capital, as nominee for the Mark A. Reichenbaum Revocable Trust (2,500,000 Units), Navy Capital, as nominee for Stephen Aiello (625,000 Units) and Navy Capital, as nominee for James A. Weil (1,875,000 Units). The Subscription Agreements require us to file, on or before November 1, 2018, a registration statement with the U.S. Securities and Exchange Commission registering the shares of Common Stock and Warrant Shares issued to the Investors. If we fail to file the registration statement on or before that date, we must issue to the Investors an additional number of Units equal to ten percent (10%) of the Units originally subscribed for by the Investor (which will include additional Warrants at the original exercise price).

The Warrants are exercisable from time to time, in whole or in part for three years. The Warrants have anti-dilution provisions that provide for an adjustment to the exercise price in the event of a future sale of Common Stock at a lower price, subject to certain exceptions as set forth in the Warrant. The Warrants also provide that they are callable at any time after the bid price of the Company’s Common Stock exceeds 120% of the exercise price of the Warrants for a period of 20 consecutive business days.

The description of the Subscription Agreements and the Warrants is qualified in its entirety by reference to the full text of a subscription agreement and warrant that has been incorporated by reference into this Current Report on Form 8-K in satisfaction of the requirement to file the Subscription Agreements as Exhibits 10.1 through 10.5 to this Current Report on Form 8-K.