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On February 20, 2018 (the “Closing Date”), CLS Holdings USA, Inc. (“we,” “us,” “our,” “CLS,” or “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with David Lamadrid (“Lamadrid”), whereby Lamadrid agreed to purchase a 8% Convertible Promissory Note of the Company in the aggregate principal amount of $31,250 (the “Note”) due, subject to the terms therein, eighteen (18) months from the date of issuance, for a purchase price of $31,250.

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 Lamadrid a three year Common Stock Purchase Warrant (the “Warrant”) to purchase 25,000 shares of CLS common stock at an initial exercise price of $0.75 per share.

Item 2.03                               Creation 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.

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

Lamadrid as an officer of the Company, is a verified accredited investor (as that term is defined in Regulation D of the Securities Act), and in issuing the above securities to Lamadrid, 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.

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