WASHINGTON, D.C. 20549
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Item 1.01 Entry into a Material Definitive Agreement.
Item 3.02. Unregistered Sale of Equity Securities.
On June 20, 2018, CLS Holdings USA, Inc. (the "Company") executed an Agency Agreement with Canaccord Genuity Corp. and closed on a private offering of its special warrants for aggregate gross proceeds of C$13,037,859 (USD$9,988,173). In connection therewith, the Company also entered into a Special Warrant Indenture and a Warrant Indenture with Odyssey Trust Company, as special warrant agent and warrant agent.
Pursuant to the offering, the Company issued 28,973,019 special warrants at a price of C$0.45 (USA$0.34) per special warrant. Each special warrant is automatically exercisable, for no additional consideration, into units of the Company on the earlier of: (i) the date that is five business days following the date on which the Company obtains a receipt from the applicable securities regulatory authorities in each of the jurisdictions in Canada in which the special warrants were told for a final prospectus qualifying the distribution of the units, which is intended to be no later than August 31, 2018, and (ii) the date that is four months and one day after the completion of the Company's acquisition of all of the membership interests in Alternative Solutions, LLC, known as Oasis Cannabis.
Upon exercise of the special warrants, each unit shall consist of one share of the Company's common stock and one warrant to purchase one share of common stock. Each warrant will be exercisable at a price of C$0.65 for three years after the Company's common stock is listed on a recognized Canadian stock exchange, subject to adjustment in certain events. If the Company has not received a receipt from the applicable Canadian securities authorities for the qualifying prospectus by August 19, 2018, the unexercised special warrant will thereafter generally entitle the holder to receive 1.1 units instead of one unit of the Company.
In connection with the offering, the Company paid a cash commission equal to C$1,043,028 (USD$799,053), a corporate finance fee equal to 1,448,651 special warrants, and 2,317,842 compensation warrants. Each compensation warrant entitles the holder thereof to acquire one unit at a price of C$0.45 per unit for a period of 36 months from the date that the Company's common stock is listed on a recognized Canadian stock exchange, subject to adjustment in certain events.
The net proceeds of the offering will be disbursed to the Company in connection with its purchase of all of the membership interests in Alternative Solutions, LLC, known as Oasis Cannabis.
The special warrants, compensation warrants, units and underlying common stock and warrants are restricted securities. The sale of the units in Canada was exempt from registration under the Securities Act because the units were sold in a private offering in accordance with the requirements of Category 3 of Rule 903 of Regulations S under the Securities Act. The sale of the units in the United States was exempt from registration under the Securities Act because the units were sold in a private offering to verified accredited investors pursuant to Rule 506(c) under the Securities Act.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
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Exhibit No.
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Description of Exhibit
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| 4.1 |
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| 4.2 |
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10.1
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