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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CLS Holdings USA Inc (QB) | USOTC:CLSH | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.005 | -9.09% | 0.05 | 0.045 | 0.055 | 0.0549 | 0.045 | 0.045 | 21,144 | 17:30:26 |
Nevada
|
45-1352286
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large Accelerated filer
☐
|
Accelerated filer
☐
|
Non-accelerated filer
☐
(Do not check if a smaller reporting company)
|
Smaller reporting company
☒
|
Emerging growth company
☐
|
|
|
Page
|
|
|
|
|
3
|
||
|
|
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PART I. FINANCIAL INFORMATION
|
|
|
Item 1.
|
4
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
7
|
|
Item 2.
|
20
|
|
Item 3.
|
27
|
|
Item 4.
|
27
|
|
|
|
|
PART II. OTHER INFORMATION
|
|
|
Item 1.
|
28
|
|
Item 1A.
|
28
|
|
Item 2.
|
28
|
|
Item 3.
|
28
|
|
Item 4.
|
28
|
|
Item 5.
|
28
|
|
Item 6.
|
28
|
|
|
|
|
29
|
August 31,
|
May 31,
|
|||||||
2017
|
2017
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
12,099
|
$
|
78,310
|
||||
Prepaid expenses
|
1,410
|
1,410
|
||||||
Total current assets
|
13,509
|
79,720
|
||||||
Security deposit
|
-
|
50,000
|
||||||
Property, plant and equipment, net of accumulated depreciation of $2,007 and $1,784
|
667
|
890
|
||||||
Intangible assets, net of accumulated amortization of $936 and $828
|
1,222
|
1,330
|
||||||
Total assets
|
$
|
15,398
|
$
|
131,940
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$
|
638,268
|
$
|
581,765
|
||||
Accrued compensation, related party
|
53,750
|
53,750
|
||||||
Due to related party
|
17,930
|
17,930
|
||||||
Accrued interest
|
28,400
|
20,171
|
||||||
Accrued interest, related party
|
130,220
|
106,022
|
||||||
Notes payable, related parties
|
-
|
699,208
|
||||||
Convertible notes payable, net of discount of $18,155 and $57,644
|
307,595
|
252,356
|
||||||
Convertible notes payable, related party, net of discount of $0 and $0
|
24,000
|
-
|
||||||
Derivative liability
|
214,621
|
95,276
|
||||||
Total current liabilities
|
1,414,784
|
1,826,478
|
||||||
Noncurrent liabilities
|
||||||||
Convertible notes payable, related parties, net of discount of $349,219 and $0
|
698,256
|
192,000
|
||||||
Total Liabilities
|
2,113,040
|
2,018,478
|
||||||
Commitments and contingencies
|
-
|
-
|
||||||
Stockholder’s equity
|
||||||||
Common stock, $0.0001 par value; 250,000,000 shares authorized; 32,876,944 and 32,852,944 shares issued and outstanding at August 31, 2017 and May 31, 2017, respectively
|
3,288
|
3,286
|
||||||
Preferred stock, $0.001 par value; 20,000,000 shares authorized; no shares issued
|
-
|
-
|
||||||
Additional paid-in capital
|
7,387,415
|
7,032,836
|
||||||
Stock payable
|
68,950
|
68,950
|
||||||
Accumulated deficit
|
(9,557,295
|
)
|
(8,991,610
|
)
|
||||
Total stockholder’s equity (deficit)
|
(2,097,642
|
)
|
(1,886,538
|
)
|
||||
Total liabilities and stockholders’ equity (deficit)
|
$
|
15,398
|
$
|
131,940
|
For the Three
|
For the Three
|
|||||||
Months Ended
|
Months Ended
|
|||||||
August 31, 2017
|
August 31, 2016
|
|||||||
Revenue
|
$
|
-
|
$
|
-
|
||||
Cost of goods sold
|
-
|
-
|
||||||
Gross margin
|
-
|
-
|
||||||
Selling, general and administrative expenses
|
213,203
|
174,745
|
||||||
Professional fees
|
146,001
|
306,181
|
||||||
Total operating expenses
|
359,204
|
480,926
|
||||||
Operating loss
|
(359,204
|
)
|
(480,926
|
)
|
||||
Other (income) expense:
|
||||||||
Interest expense
|
74,866
|
258,070
|
||||||
Gain on settlement of debt
|
(3,480
|
)
|
-
|
|||||
Loss on modification of debt
|
29,145
|
-
|
||||||
Change in fair value of derivative liability
|
105,950
|
(123,921
|
)
|
|||||
Total other expense
|
206,481
|
134,149
|
||||||
Income (Loss) before income taxes
|
(565,685
|
)
|
(615,075
|
)
|
||||
Income tax expense
|
-
|
-
|
||||||
Net income (loss)
|
$
|
(565,685
|
)
|
$
|
(615,075
|
)
|
||
Net income (loss) per share - basic
|
$
|
(0.02
|
)
|
$
|
(0.03
|
)
|
||
Net income (loss) per share - diluted
|
$
|
(0.02
|
)
|
$
|
(0.03
|
)
|
||
Weighted average shares outstanding - basic
|
32,865,727
|
20,350,003
|
||||||
Weighted average shares outstanding - diluted
|
32,865,727
|
20,350,003
|
For the Three
|
For the Three
|
|||||||
Months Ended
|
Months Ended
|
|||||||
August 31, 2017
|
August 31, 2016
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income (loss)
|
$
|
(565,685
|
)
|
$
|
(615,075
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Imputed interest
|
271
|
271
|
||||||
Change in fair value of derivative
|
105,950
|
(123,921
|
)
|
|||||
Loss on modification of debt
|
29,145
|
-
|
||||||
Gain on settlement of debt
|
(3,480
|
)
|
-
|
|||||
Amortization of debt discounts
|
42,060
|
202,196
|
||||||
Depreciation and amortization expense
|
331
|
331
|
||||||
Changes in assets and liabilities:
|
||||||||
Other assets
|
50,000
|
-
|
||||||
Accounts payable and accrued expenses
|
112,068
|
59,905
|
||||||
Accrued compensation
|
62,500
|
37,500
|
||||||
Due to related parties
|
-
|
4,697
|
||||||
Accrued interest, related party
|
24,198
|
34,191
|
||||||
Deferred rent
|
(49,565
|
)
|
-
|
|||||
Accrued interest
|
8,229
|
21,412
|
||||||
Net cash used in operating activities
|
(183,978
|
)
|
(378,493
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Payment for construction in progress
|
-
|
(11,513
|
)
|
|||||
Net cash used in investing activities
|
-
|
(11,513
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds from related party convertible notes payable
|
-
|
150,000
|
||||||
Proceeds from related party notes payable
|
117,767
|
179,000
|
||||||
Principal payments on related party notes payable
|
-
|
(24,000
|
)
|
|||||
Net cash provided by financing activities
|
117,767
|
305,000
|
||||||
Net increase in cash and cash equivalents
|
(66,211
|
)
|
(85,006
|
)
|
||||
Cash and cash equivalents at beginning of period
|
78,310
|
88,244
|
||||||
Cash and cash equivalents at end of period
|
$
|
12,099
|
$
|
3,238
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Interest paid
|
$
|
-
|
$
|
-
|
||||
Income taxes paid
|
$
|
-
|
$
|
-
|
||||
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Convertible note issued for unpaid accrued salary
|
$
|
62,500
|
$
|
250,000
|
||||
Related party notes payable reclassified as related party convertible notes payable
|
$
|
816,975
|
$
|
222,750
|
||||
Beneficial conversion feature on convertible notes payable
|
$
|
351,790
|
$
|
-
|
||||
Shares issued for settlement of accounts payable
|
$
|
6,000
|
$
|
-
|
August 31,
|
May 31,
|
|||||||
2017
|
2017
|
|||||||
Prepaid legal fees
|
$
|
1,410
|
$
|
1,410
|
||||
Total
|
$
|
1,410
|
$
|
1,410
|
|
August 31,
|
May 31,
|
||||||
|
2017
|
2017
|
||||||
Computer equipment
|
$
|
2,674
|
$
|
2,674
|
||||
Property and equipment, gross
|
2,674
|
2,674
|
||||||
Less: accumulated depreciation
|
(2,007
|
)
|
(1,784
|
)
|
||||
Property and equipment, net
|
$
|
667
|
$
|
890
|
|
August 31,
|
May 31,
|
||||||
|
2017
|
2017
|
||||||
Domain name
|
$
|
2,158
|
$
|
2,158
|
||||
|
2,158
|
2,158
|
||||||
Less: accumulated amortization
|
(936
|
)
|
(828
|
)
|
||||
Intangible assets, net
|
$
|
1,222
|
$
|
1,330
|
August 31,
|
May 31,
|
|||||||
2017
|
2017
|
|||||||
Trade payables
|
$
|
549,817
|
$
|
497,213
|
||||
Accrued payroll and related liabilities
|
32,752
|
34,987
|
||||||
Deferred rent liability
|
55,699
|
49,565
|
||||||
Total accounts payable and accrued liabilities
|
$
|
638,268
|
$
|
581,765
|
August 31,
|
May 31,
|
|||||||
2017
|
2017
|
|||||||
Notes payable to Jeffrey Binder, an officer and director of the Company, for advances to fund operations (the “Binder Funding Notes”). The Binder Funding Notes bear interest at a rate of 6% for loans made through November 30, 2016, and at a rate of 10% for loans made after November 30, 2016. The Binder Funding Notes have no maturity date and are due on demand. During the twelve months ended May 31, 2016, Mr. Binder advanced a total of $95,250 to the Company under the Binder Funding Notes; during the year ended May 31, 2016, $92,500 of this amount was transferred out of the Binder Funding Notes and used to fund two new convertible notes payable to Mr. Binder (See Binder Convertible Notes 1 and 2 below). During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $1,308 on the Binder Funding Notes. In July 2016, the remaining principal balance of $2,750 in the Binder Funding Notes was transferred to a new Convertible Note payable to Mr. Binder (the “Binder Convertible Note 3”).
During the twelve months ended May 31, 2017, Mr. Binder advanced a total of $145,850 to the Company under the Binder Funding Notes. Also during the year ended May 31, 2017, Mr. Binder loaned the Company an additional $49,700; which was credited to the Binder Funding Notes. Also during the year ended May 31, 2017, principal in the amount of $59,750 and accrued interest in the amount of $813 was transferred out of the Binder Funding Notes and used to fund two new convertible notes payable to Mr. Binder (See Binder Convertible Notes 3 and 4 below). Also during the year ended May 31, 2017, the Company made principal payments in the aggregate amount of $61,000 under the Binder Funding Notes. During the year ended May 31, 2017, the Company accrued interest in the amount of $1,910 on the Binder Funding Notes. Effective May 31, 2017, pursuant to the Omnibus Loan Agreement, a conversion feature was added to the Binder Funding Notes related to funds received prior to January 1, 2017 whereby principal and accrued interest is convertible into common stock of the Company at a rate of $0.25 per share.
During the three months ended August 31, 2017, Mr. Binder advanced a total of $47,767 to the Company under the Binder Funding Notes. During the three months ended August 31, 2017, interest in the amount of $2,466 was accrued on the Binder Funding Notes. Also during the three months ended August 31, 2017, principal in the amount of $77,550 and accrued interest in the amount of $3,630 were transferred from the Binder Funding Notes to a new convertible note payable to Mr. Binder (the “Binder Convertible Note 5”), and principal in the amount of $47,767 was transferred from the Binder Funding Notes to a new Convertible Note payable to Mr. Binder (the “Binder Convertible Note 6”).
|
$ |
-
|
$ |
77,550
|
August 31,
|
May 31,
|
|||||||
2017
|
2017
|
|||||||
Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated March 31, 2017 (the “Binder Convertible Note 4”). The Binder Convertible Note 4 was funded with the conversion of $112,500 of unpaid accrued salary due to Mr. Binder and $47,000 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 10% per annum. No interest payments are required until April 1, 2018, at which time all accrued interest becomes due and payable. Commencing on July 1, 2018, the first of eight principal payments in the amount of $19,938 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.25 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $0.25 per share.
Pursuant to the Omnibus Loan Agreement, on May 31, 2017, the requirement to issue warrants upon conversion was deleted, and principal in the amount of $87,500 was converted into a total of 350,000 shares of common stock. The remaining principal balance of $72,000 will be due in eight quarterly payments in the amount of $9,000 commencing July 1, 2018; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $2,666 on the Binder Convertible Note 4.
During the three months ended August 31, 2017, interest in the amount of $1,815 was accrued on Binder Convertible Note 4.
|
$
|
72,000
|
$
|
72,000
|
||||
Unsecured convertible note issued to Newcan, an entity owned by Frank Koretsky, a director of the Company, dated March 31, 2017 (the “Newcan Convertible Note 1”). The Newcan Convertible Note 1 was funded with the conversion of $120,000 of advances made to the Company under the Newcan Funding Notes. This note bears interest at the rate of 10% per annum. No interest payments are required until April 1, 2018, at which time all accrued interest becomes due and payable. Commencing on July 1, 2018, the first of eight principal payments in the amount of $15,000 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.25 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $0.25 per share. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $2,005 on the Koretsky Convertible Note 4. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, the requirement to issue warrants upon conversion was deleted.
During the three months ended August 31, 2017, interest in the amount of $3,025 was accrued on Newcan Convertible Note 1.
|
120,000
|
120,000
|
||||||
Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated August 23, 2017 in the original principal amount of $115,050 (the “Binder Convertible Note 5”). The Binder Convertible Note 5 was funded with the conversion of $37,500 of unpaid accrued salary due to Mr. Binder and $77,550 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 10% per annum. No interest payments are required until October 1, 2018, at which time all accrued interest becomes due and payable. Commencing on January 2, 2019, the first of eight principal payments in the amount of $14,381 will become due; subsequent principal payments will become due on the first day of each April, July, October, and January until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one share of common stock for each $0.25 converted. The Company recognized a discount of $46,020 on the Binder Convertible Note 5 related to the value of the beneficial conversion feature at the time of issuance; $336 of this discount was amortized during the three months ended August 31, 2017. During the three months ended August 31, 2017, interest in the amount of $252 was accrued on Binder Convertible Note 5 and $3,630 of accrued interest was transferred from the Binder Funding Notes.
|
115,050
|
-
|
August 31,
2017
|
May 31,
2017
|
|||||||
Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated August 23, 2017 in the original principal amount of $72,767 (the “Binder Convertible Note 6”). The Binder Convertible Note 6 was funded with the conversion of $25,000 of unpaid accrued salary due to Mr. Binder and $47,767 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 10% per annum. No interest payments are required until October 1, 2018, at which time all accrued interest becomes due and payable. Commencing on January 2, 2019, the first of eight principal payments in the amount of $9,096 will become due; subsequent principal payments will become due on the first day of each April, July, October, and January until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one share of common stock for each $0.25 converted. The Company recognized a discount of $29,107 on the Binder Convertible Note 6 related to the value of the beneficial conversion feature at the time of issuance; $213 of this discount was amortized during the three months ended August 31, 2017. During the three months ended August 31, 2017, interest in the amount of $159 was accrued on Binder Note 6.
|
72,767
|
-
|
||||||
Unsecured convertible note issued to Newcan, an entity owned by Frank Koretsky, a director of the Company, dated August 23, 2017 in the original principal amount of $621,658 (the “Newcan Convertible Note 4”). The Newcan Convertible Note 4 was funded with the conversion of $621,658 of advances Newcan made to the Company under the Newcan Funding Notes. This note bears interest at the rate of 10% per annum. No interest payments are required until October 1, 2018, at which time all accrued interest becomes due and payable. Commencing on January 2, 2019, the first of eight principal payments in the amount of $69,074 will become due; subsequent principal payments will become due on the first day of each April, July, October, and January until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one share of common stock for each $0.25 converted. The Company recognized a discount of $248,663 on the Newcan Convertible Note 4 related to the value of the beneficial conversion feature at the time of issuance; $1,817 of this discount was amortized during the three months ended August 31, 2017. During the three months ended August 31, 2017, interest in the amount of $1,363 was accrued on Newcan Convertible Note 4 and $23,856 of accrued interest was transferred from the Newcan Funding Notes.
|
621,658
|
-
|
||||||
Unsecured convertible note issued to Newcan, an entity owned by Frank Koretsky, a director of the Company, dated August 23, 2017 in the original principal amount of $70,000 (the “Newcan Convertible Note 5”). The Newcan Convertible Note 5 was funded with the conversion of $70,000 of advances Newcan made to the Company under the Newcan Funding Notes. This note bears interest at the rate of 10% per annum. No interest payments are required until October 1, 2018, at which time all accrued interest becomes due and payable. Commencing on January 2, 2019, the first of eight principal payments in the amount of $8,750 will become due; subsequent principal payments will become due on the first day of each April, July, October, and January until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one share of common stock for each $0.25 converted. The Company recognized a discount of $28,000 on the Newcan Convertible Note 5 related to the value of the beneficial conversion feature at the time of issuance; $205 of this discount was amortized during the three months ended August 31, 2017. During the three months ended August 31, 2017, interest in the amount of $153 was accrued on Newcan Convertible Note 5.
|
70,000
|
-
|
||||||
Total – Convertible Notes Payable, Related Parties
|
$
|
1,071,475
|
$
|
192,000
|
||||
Less: Discount
|
(349,219
|
)
|
-
|
|||||
Convertible Notes Payable, Related Parties, Net of Discounts
|
$
|
722,256
|
$
|
192,000
|
||||
Convertible Notes Payable, Related Parties, Net of Discounts, Current Portion
|
$
|
24,000
|
$
|
-
|
||||
Convertible Notes Payable, Related Parties, Net of Discounts, Long-term Portion
|
698,256
|
192,000
|
August 31,
2017
|
May 31,
2017
|
|||||||
Convertible promissory note issued to an unaffiliated third party due April 29, 2018 (the “April 2015 Note”). During the twelve months ended May 31, 2015, the lender loaned the Company the amount of $200,000 pursuant to this note. The April 2015 Note bears interest at a rate of 15% per annum. On the first anniversary of this note, the all then accrued interest became due. Thereafter, the Company is required to make eight equal payments of principal together with accrued interest, quarterly in arrears, commencing on July 1, 2016 until paid in full. The note and any accrued unpaid interest is convertible into common stock of the Company. For each dollar converted, the note holder shall receive two shares of common stock and one three-year warrant to purchase 1.33 shares of common stock at $0.75 per share. The Company recognized a discount of $200,000 on the April 2015 Note related to the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $66,667 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $30,082 on this note. During the year ended May 31, 2017, the Company repaid principal in the amount of $100,000 and interest in the amount of $53,837 on this note. Also during the year ended May 31, 2017, the Company charged $100,545 of the discount to operations, and accrued interest in the amount of $22,440 on the April 2015 Note.
During the three months ended August 31, 2017, the Company accrued interest in the amount of $3,781 on this note.
|
$ |
100,000
|
$ |
100,000
|
||||
Convertible promissory note payable to Old Main Capital, LLC (“Old Main”) dated March 18, 2016 and bearing interest at a rate of 8% (the “8% Note”). The 8% Note was issued for Old Main’s commitment to enter into an equity line transaction with the Company and prepare all of the related transaction documents. Old Main may, at its option, convert all or a portion of the note and accrued but unpaid interest into shares of common stock at a conversion price of $1.07 per share (post Reverse-Split) (the “8% Fixed Conversion Price”). The 8% Fixed Conversion Price is subject to adjustment if, at any time while this note is outstanding, the Company should issue any equity security with an effective price per share that is lower than the 8% Fixed Conversion Price (the “8% Base Conversion Price”), other than certain exempt issuances. In such an instance, the 8% Fixed Conversion Price will be lowered to match the 8% Base Conversion Price. The shares underlying the 8% Note are subject to a registration rights agreement. At the earlier of September 18, 2016 or two trading days after this registration statement becomes effective, the Company must begin to redeem 1/6th of the face amount of the note and any accrued but unpaid interest on a monthly basis. Such amortization payment may be made, at its option, in cash or, subject to certain conditions, in common stock pursuant to a conversion rate equal to the lower of (a) $1.07 (post Reverse-Split) or (b) 75% of the lowest daily volume weighted average price of the common stock in the twenty consecutive trading days ending on the trading day that is immediately prior to the applicable conversion date. The Company recognized a discount of $172,108 on the value of the embedded derivative.
On November 28, 2016, the 8% Note was amended converting the note from an installment note to a “balloon” note, with all principal and accrued interest due on March 18, 2017. In addition, the Fixed Conversion Price was changed to a variable conversion price equal to the lesser of the prior Fixed Conversion Price or 75% of the lowest VWAP in the fifteen trading days ending on the trading day immediately prior to the conversion date. The November 28, 2016 amendment required an extinguishment analysis of the 8% Note resulting in gain on extinguishment of debt in the amount of $81,496 for the nine months ended February 28, 2017. The gain on extinguishment of debt was included in additional paid-in capital at February 28, 2017. The 8% Note was revalued as of the November 28, 2016 amendment and the Company recognized a discount of $169,476 on the value of the embedded derivative. At February 28, 2017 and May 31, 2016, the amount of discount remaining on these notes was $118,998 and $163,586, respectively.
On March 27, 2017, the Company entered into a further amendment to the 8% Note, whereby the Company agreed to increase the outstanding amount due under the 8% Note as of March 18, 2017 by 5%, or $10,000. In exchange for doing so, Old Main agreed to extend the maturity of the 8% Note until July 1, 2017 and to suspend conversions under the 8% Note until July 1, 2017. Also during the year ended May 31, 2017, the Company accrued interest in the amount of $17,207 on the 8% Note.
On July 6, 2017, the 8% Note was further amended, whereby the maturity date was extended to July 15, 2017 and the outstanding balance was increased by $15,750. On August 23, 2017, the 8% Note was amended again to extend the maturity date to September 15, 2017. During the three months ended August 31, 2017, the Company accrued interest in the amount of $4,449 on the 8% Note, and $30,411 of the discount was amortized to interest expense.
|
225,750
|
210,000
|
||||||
Total - Convertible Notes Payable
|
$
|
325,750
|
$
|
310,000
|
||||
Less: Discount
|
(18,155
|
)
|
(57,644
|
)
|
||||
Convertible Notes Payable, Net of Discounts
|
$
|
307,595
|
$
|
252,356
|
||||
Total - Convertible Notes Payable, Net of Discounts, Current Portion
|
$
|
307,595
|
$
|
252,356
|
||||
Total - Convertible Notes Payable, Net of Discounts, Long-term Portion
|
$
|
-
|
$
|
-
|
||||
Discounts on notes payable amortized to interest expense:
|
$
|
42,060
|
$
|
252,356
|
|
August 31, 2017
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Liabilities
|
||||||||||||||||
Derivative liabilities
|
$
|
-
|
$
|
-
|
$
|
214,621
|
$
|
214,621
|
|
May 31, 2017
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Liabilities
|
||||||||||||||||
Derivative liabilities
|
$
|
-
|
$
|
-
|
$
|
95,276
|
$
|
95,276
|
|
Derivative
|
|||
|
Liability
|
|||
Liabilities Measured at Fair Value
|
||||
|
||||
Balance as of May 31, 2017
|
$
|
95,276
|
||
|
||||
Issuances
|
13,395
|
|||
|
||||
Conversions/Redemptions
|
-
|
|||
|
||||
Extinguishment of debt – related party
|
-
|
|||
|
||||
Revaluation loss
|
105,950
|
|||
|
||||
Balance as of August 31, 2017
|
$
|
214,621
|
|
August 31,
2017
|
May 31,
2017
|
||||||
Current Assets
|
$
|
13,509
|
$
|
79,720
|
||||
Current Liabilities
|
$
|
1,414,784
|
$
|
1,826,478
|
||||
Working Capital (Deficit)
|
$
|
(1,401,275
|
)
|
$
|
(1,746,758
|
)
|
· |
Estimates and assumptions used in the valuation of derivative liabilities: Management utilizes a lattice model to estimate the fair value of derivative liabilities. The model includes subjective assumptions that can materially affect the fair value estimates.
|
· |
We do not have an independent board of directors or audit committee or adequate segregation of duties; and
|
· |
We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to our limited resources.
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
CLS HOLDINGS USA, INC.
|
|
|
|
|
|
|
Date:
October 13,
2017
|
By:
|
/s/ Jeffrey I. Binder
|
|
|
|
Jeffrey I. Binder
|
|
|
|
Chairman, President and Chief Executive Officer
(Principal Executive Officer and Principal Financial Officer)
|
|
1 Year CLS Holdings USA (QB) Chart |
1 Month CLS Holdings USA (QB) Chart |
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