Frank Koretsky
About Frank Koretsky
Frank Koretsky is the controlling beneficial owner of CLS Holdings USA, Inc. common stock, but is not a director or officer of CLSH. As of May 1, 2025 he beneficially owned 80,027,062 shares (48.6%) through FK Legacy Trust and Newcan Investment Partners LLC; company records state he manages personal investments primarily in real estate via these entities . The proxy further identifies him as an affiliate and not part of the Board’s independent committee deliberations on the go‑private transaction; he formally adopted the independent committee’s fairness analysis but did not participate in deliberations .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| FK Legacy Trust | Beneficiary/Controlling beneficial owner of CLSH shares | Ongoing (disclosed past 5 years) | Converted $2.2M of debt into CLSH equity in 2024 (corrected from $2.6M) |
| Newcan Investment Partners LLC | Beneficial owner/Investment entity | Ongoing (disclosed past 5 years) | Holds 3,368,706 CLSH common shares |
External Roles
| Organization | Role | Nature | Notes |
|---|---|---|---|
| FK Legacy Trust | Beneficiary | Private trust | 76,658,356 CLSH shares as of May 1, 2025 |
| Newcan Investment Partners LLC | Beneficial owner | Private LLC | 3,368,706 CLSH shares as of May 1, 2025 |
Board Governance
- Koretsky is not on the CLSH Board; current directors are Andrew Glashow (Chair/CEO), Ross Silver (independent), and David Zelinger (independent) .
- Independent Special Committee to evaluate the 2025 reverse split comprised Ross Silver and David Zelinger; CEO Glashow recused .
- Position of Koretsky: deemed affiliate; believes the reverse split is substantively and procedurally fair, adopting the independent committee’s conclusions; did not participate in committee or Board deliberations .
Other Directorships & Interlocks
| Company | Board Role | Committees | Notes |
|---|---|---|---|
| None disclosed | — | — | Proxies list no public company director roles for Koretsky |
Expertise & Qualifications
- Investor; manages personal investments primarily in real estate through FK Legacy Trust and Newcan Investment Partners LLC .
- No education, certifications, or “financial expert” designation disclosed in proxies .
Equity Ownership
| Date | Holder/Entity | Shares Beneficially Owned | % of Outstanding | Notes |
|---|---|---|---|---|
| Sep 13, 2024 | Frank Koretsky (FK Legacy Trust + Newcan) | 80,027,062 | 48.25% | Includes correction of prior debt‑to‑equity conversion; FK Legacy canceled 10,335,918 shares to reflect $2.2M converted at $0.0387/share |
| May 1, 2025 | Frank Koretsky (FK Legacy Trust + Newcan) | 80,027,062 | 48.6% | 76,658,356 shares via FK Legacy Trust; 3,368,706 via Newcan Investment Partners LLC |
- Vested/unvested breakdown: Not applicable; common stock beneficial ownership only (no disclosed unvested awards) .
- Pledging/hedging: No pledging disclosures noted; company states no pending arrangements that may result in change of control beyond large holders .
Related‑Party Transactions (Conflict Review)
| Date/Period | Counterparty | Instrument | Key Terms | Amount/Shares | Notes |
|---|---|---|---|---|---|
| Sep 2024 (corrected Sep 20, 2024) | FK Legacy Trust | Debt‑to‑Equity Conversion | Price per share: $0.0387 | $2.2M converted into 56,847,545 shares; 10,335,918 shares canceled to correct error | Reported in 8‑K and proxy footnote; increased Koretsky beneficial ownership |
| 2025 (post‑Special Mtg plan) | Koretsky (individual) | Secured Promissory Loan to CLSH | Interest 12%/yr; 36‑month amortization; monthly P&I $14,946.44; prepayable w/o penalty; secured by unencumbered assets | $450,000 | Intended to help fund cash‑out of fractional shares in reverse split |
- Independence and voting: Koretsky is an affiliate permitted to vote on Proposal 1 (reverse split); will be cashed out of ~27,000 shares yet remain a shareholder post‑split .
- Potential conflicts: Company acknowledges affiliate interests may differ from unaffiliated holders; independent committee process and fairness opinion used to mitigate .
Governance Assessment
- Controlling shareholder influence: Koretsky’s 48.6% stake confers significant influence over outcomes requiring shareholder approval. While the company formed an independent special committee and obtained a Houlihan Capital fairness opinion, affiliates (including Koretsky) are allowed to vote, which can raise minority‑holder fairness concerns in go‑private actions .
- Related‑party financing: The planned $450,000 secured loan at 12% from Koretsky to fund fractional share repurchases introduces creditor influence post‑transaction; terms are disclosed and not contingent, but still a conflict vector if negotiations arise over collateral or default remedies .
- Section 16 compliance: FK Legacy Trust failed to timely file an initial Form 3 upon crossing 10% ownership; while later corrected, late filings by 10% holders are a governance red flag indicating weaker compliance controls at large shareholders .
- Minority protections: Dissenters’ rights under Nevada law are disclosed with detailed procedures; cash‑out price set at $0.037, the high end of fairness range ($0.018–$0.037) from Houlihan; nevertheless, the transaction’s structure allows affiliates to vote, increasing risk of perceived coercion by minority holders despite appraisal remedies .
- Board independence and process: Koretsky is not on the Board; the independent committee (Silver, Zelinger) met five times and used external counsel and a third‑party fairness opinion; CEO recused. Process quality and transparency are positives for investor confidence .
RED FLAGS
- Late Section 16 initial filing by FK Legacy Trust (10%+ holder) .
- Affiliate voting and related‑party loan to fund cash‑out in going‑private reverse split .
- Concentration risk: Near‑control beneficial ownership by a single holder (48.6%) .
Positive Signals
- Independent special committee oversight and third‑party fairness opinion; cash‑out set at top of fairness range .
- Explicit non‑participation of Koretsky in committee deliberations; formal fairness position disclosed .
Notes
- Director compensation, committee assignments, attendance, and say‑on‑pay are not applicable to Koretsky; he is not a CLSH director per 2024 and 2025 proxy statements .
- No legal proceedings, SEC injunctions, or convictions involving Koretsky disclosed in the past five years .