Item
4.01


CONVERTIBLE
PROMISSORY NOTE 








	Effective Date: January 23, 2018	U.S. $335,000.00



 


 


FOR VALUE RECEIVED,
Mountain High Acquisitions Corp., a Colorado corporation (“Borrower”),
promises to pay to St. George Investments LLC, a Utah limited liability company,
or its successors or assigns (“Lender”), $335,000.00 and any interest, fees, charges, and late fees on the date
that is twelve (12) months after the Purchase Price Date in accordance with the terms set forth herein and to pay interest on the
Outstanding Balance at the rate of ten percent (10%) per annum from the Purchase Price Date until the same is paid in full. This
Convertible Promissory Note (this “Note”) is issued and made effective as of January 23, 2018 (the “Effective
Date”). This Note is issued pursuant to that certain Securities Purchase Agreement dated January 23, 2018, as the same
may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”). All interest
calculations hereunder shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months,
shall compound daily and shall be payable in accordance with the terms of this Note. Certain capitalized terms used herein are
defined in Attachment 1 attached hereto and incorporated herein by this reference.


This Note carries
an OID of $30,000.00. In addition, Borrower agrees to pay $5,000.00 to Lender to cover Lender’s legal fees, accounting costs,
due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of this Note (the “Transaction
Expense Amount”), all of which amount is included in the initial principal balance of this Note. The purchase price for
this Note shall be $300,000.00 (the “Purchase Price”), computed as follows: $335,000.00 original principal balance,
less the OID, less the Transaction Expense Amount. The Purchase Price shall be payable by Lender by wire transfer of immediately
available funds.


1.
Payment; Prepayment.


1.1.
Payment. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares
(as defined below), as provided for herein, and delivered to Lender at the address or bank account furnished to Borrower for that
purpose. All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to
(c) accrued and unpaid interest, and thereafter, to (d) principal.


1.2.
Prepayment. Notwithstanding the foregoing, so long as Borrower has not received a Conversion Notice (as defined below)
from Lender where the applicable Conversion Shares have not yet been delivered and so long as no Event of Default has occurred
since the Effective Date (whether declared by Lender or undeclared and regardless of whether or not cured), then Borrower shall
have the right, exercisable on not less than five (5) Trading Days prior written notice to Lender to prepay the Outstanding Balance
of this Note, in full, in accordance with this Section 1. Any notice of prepayment hereunder (an “Optional Prepayment
Notice”) shall be delivered to Lender at its registered address and shall state: (i) that Borrower is exercising its
right to prepay this Note, and (ii) the date of prepayment, which shall be not less than five (5) Trading Days from the date of
the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), Borrower
shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of Lender as may be specified by Lender
in writing to Borrower. If Borrower exercises its right to prepay this Note, Borrower shall make payment to Lender of an amount
in cash equal to 125% multiplied by the then Outstanding Balance of this Note (the “Optional Prepayment Amount”).
In the event Borrower delivers the Optional Prepayment Amount to Lender prior to the Optional Prepayment Date or without delivering
an Optional Prepayment Notice to Lender as set forth herein without Lender’s prior written consent, the Optional Prepayment
Amount shall not be deemed to have been paid to Lender until the Optional Prepayment Date. Moreover, in such event the Optional
Prepayment Liquidated Damages Amount will automatically be added to the Outstanding Balance of this Note on the day Borrower delivers
the Optional Prepayment Amount to Lender. In the event Borrower delivers the Optional Prepayment Amount without an Optional Prepayment
Notice, then the Optional Prepayment Date will be deemed to be the date that is five (5) Trading Days from the date that the Optional
Prepayment Amount was delivered to Lender and Lender shall be entitled to exercise its conversion rights set forth herein during
such five (5) day period. In addition, if Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment
Amount due to Lender within two (2) Trading Days following the Optional Prepayment Date, Borrower shall forever forfeit its right
to prepay this Note.


2.
Security. This Note is not secured.


3.
Conversion.


3.1.
Conversions. Lender has the right at any time after the Purchase Price Date until the Outstanding Balance has been
paid in full, including without limitation until any Optional Prepayment Date (even if Lender has received an Optional Prepayment
Notice), at its election, to convert (each instance of conversion is referred to herein as a “Conversion”) all
or any part of the Outstanding Balance into shares (“Conversion Shares”) of fully paid and non-assessable common
stock, $0.0001 par value per share (“Common Stock”), of Borrower as per the following conversion formula: the
number of Conversion Shares equals the amount being converted (the “Conversion Amount”) divided by the Conversion
Price (as defined below). Conversion notices in the form attached hereto as Exhibit A (each, a “Conversion Notice”)
may be effectively delivered to Borrower by any method of Lender’s choice (including but not limited to facsimile, email,
mail, overnight courier, or personal delivery), and all Conversions shall be cashless and not require further payment from Lender.
Borrower shall deliver the Conversion Shares from any Conversion to Lender in accordance with Section 8 below.


3.2.
Conversion Price. Subject to the adjustments set forth herein, the conversion price (the “Conversion Price”)
for each Conversion shall be equal to 65% (the “Conversion Factor”) multiplied by the average of the two (2)
lowest Closing Bid Prices in the twenty (20) Trading Days immediately preceding the applicable Conversion. Additionally, if at
any time after the Effective Date, Borrower is not DWAC Eligible, then the then-current Conversion Factor will automatically be
reduced by 5% for all future Conversions. If at any time after the Effective Date, the Conversion Shares are not DTC Eligible,
then the then-current Conversion Factor will automatically be reduced by an additional 5% for all future Conversions. Finally,
in addition to the Default Effect, if any Major Default occurs after the Effective Date, the Conversion Factor shall automatically
be reduced for all future Conversions by an additional 5% for each of the first three (3) Major Defaults that occur after the Effective
Date (for the avoidance of doubt, each occurrence of any Major Default shall be deemed to be a separate occurrence for purposes
of the foregoing reductions in Conversion Factor, even if the same Major Default occurs three (3) separate times). For example,
the first time Borrower is not DWAC Eligible, the Conversion Factor for future Conversions thereafter will be reduced from 65%
to 60% for purposes of this example. Following such event, the first time the Conversion Shares are no longer DTC Eligible, the
Conversion Factor for future Conversions thereafter will be reduced from 60% to 55% for purposes of this example. If, thereafter,
there are three (3) separate occurrences of a Major Default pursuant to Section 4.1(a), then for purposes of this example the Conversion
Factor would be reduced by 5% for the first such occurrence, and so on for each of the second and third occurrences of such Major
Default.


4.
Defaults and Remedies.


4.1.
Defaults. The following are events of default under this Note (each, an “Event of Default”): (a)
Borrower fails to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) Borrower
fails to deliver any Conversion Shares in accordance with the terms hereof; (c) a receiver, trustee or other similar official shall
be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days
or shall not be dismissed or discharged within sixty (60) days; (d) Borrower becomes insolvent or generally fails to pay, or admits
in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (e) Borrower makes
a general assignment for the benefit of creditors; (f) Borrower files a petition for relief under any bankruptcy, insolvency or
similar law (domestic or foreign); (g) an involuntary bankruptcy proceeding is commenced or filed against Borrower; (h) Borrower
or any pledgor, trustor, or guarantor of this Note defaults or otherwise fails to observe or perform any covenant, obligation,
condition or agreement of Borrower or such pledgor, trustor, or guarantor contained herein or in any other Transaction Document
(as defined in the Purchase Agreement), other than those specifically set forth in this Section 4.1 and Section 4 of the Purchase
Agreement; (i) any representation, warranty or other statement made or furnished by or on behalf of Borrower or any pledgor, trustor,
or guarantor of this Note to Lender herein, in any Transaction Document, or otherwise in connection with the issuance of this Note
is false, incorrect, incomplete or misleading in any material respect when made or furnished; (j) the occurrence of a Fundamental
Transaction without Lender’s prior written consent; (k) Borrower fails to maintain the Share Reserve as required under the
Purchase Agreement; (l) Borrower effectuates a reverse split of its Common Stock without twenty (20) Trading Days prior written
notice to Lender; (m) any money judgment, writ or similar process is entered or filed against Borrower or any subsidiary of Borrower
or any of its property or other assets for more than $100,000.00, and shall remain unvacated, unbonded or unstayed for a period
of twenty (20) calendar days unless otherwise consented to by Lender; (n) Borrower fails to be DWAC Eligible; (o) Borrower fails
to observe or perform any covenant set forth in Section 4 of the Purchase Agreement; or (p) Borrower, any affiliate of Borrower,
or any pledgor, trustor, or guarantor of this Note breaches any covenant or other term or condition contained in any Other Agreements.


4.2.
Remedies. At any time and from time to time after Lender becomes aware of the occurrence of any Event of Default,
Lender may accelerate this Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable
in cash at the Mandatory Default Amount. Notwithstanding the foregoing, at any time following the occurrence of any Event of Default,
Lender may, at its option, elect to increase the Outstanding Balance by applying the Default Effect (subject to the limitation
set forth below) via written notice to Borrower without accelerating the Outstanding Balance, in which event the Outstanding Balance
shall be increased as of the date of the occurrence of the applicable Event of Default pursuant to the Default Effect, but the
Outstanding Balance shall not be immediately due and payable unless so declared by Lender (for the avoidance of doubt, if Lender
elects to apply the Default Effect pursuant to this sentence, it shall reserve the right to declare the Outstanding Balance immediately
due and payable at any time and no such election by Lender shall be deemed to be a waiver of its right to declare the Outstanding
Balance immediately due and payable as set forth herein unless otherwise agreed to by Lender in writing). Notwithstanding the foregoing,
upon the occurrence of any Event of Default described in clauses (c), (d), (e), (f) or (g) of Section 4.1, the Outstanding Balance
as of the date of acceleration shall become immediately and automatically due and payable in cash at the Mandatory Default Amount,
without any written notice required by Lender. At any time following the occurrence of any Event of Default, upon written notice
given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the applicable Event of Default
occurred at an interest rate equal to the lesser of 22% per annum or the maximum rate permitted under applicable law (“Default
Interest”). For the avoidance of doubt, Lender may continue making Conversions at any time following an Event of Default
until such time as the Outstanding Balance is paid in full. Borrower further acknowledges and agrees that Lender may continue making
Conversions following the entry of any judgment or arbitration award in favor of Lender until such time that the entire judgment
amount or arbitration award is paid in full. Borrower agrees that any judgment or arbitration award will, by its terms, be made
convertible into Common Stock. Any Conversions made following a judgment or arbitration award shall be made pursuant to the following
formula: the amount of the judgment or arbitration award being converted divided by 80% of the lowest Closing Bid Price in the
ten (10) Trading Days immediately preceding the date of Conversion. In such event, Borrower and Lender agree that it is their expectation
that any such judgment amount or arbitration award that is converted will tack back to the Purchase Price Date for purposes of
determining the holding period under Rule 144. Borrower and Lender agree and stipulate that any judgment or arbitration award entered
against Borrower shall be reduced by $1,000.00 and such $1,000.00 shall become the new Outstanding Balance of this Note and this
Note shall expressly survive such judgment or arbitration award. Additionally, following the occurrence of any Event of Default,
Borrower may, at its option, pay any Conversion in cash instead of Conversion Shares by paying to Lender on or before the applicable
Delivery Date (as defined below) a cash amount equal to the number of Conversion Shares set forth in the applicable Conversion
Notice multiplied by the highest intra-day trading price of the Common Stock that occurs during the period beginning on the date
the applicable Event of Default occurred and ending on the date of the applicable Conversion Notice. In connection with acceleration
described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any
kind, and Lender may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder
and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time
prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as Lender receives
full payment pursuant to this Section 4.2. No such rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other remedies available to it at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to Borrower’s
failure to timely deliver Conversion Shares upon Conversion of the Note as required pursuant to the terms hereof.


5.
Unconditional Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and
enforceable obligation of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights
of offset it now has or may have hereafter against Lender, its successors and assigns, and agrees to make the payments or Conversions
called for herein in accordance with the terms of this Note.


6.
Waiver. No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by
the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any
other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing
waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in
writing.


7.
Rights Upon Issuance of Securities.


7.1.
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision hereof,
if Borrower at any time on or after the Effective Date subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately
prior to such subdivision will be proportionately reduced. Without limiting any provision hereof, if Borrower at any time on or
after the Effective Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately
increased. Any adjustment pursuant to this Section 7.1 shall become effective immediately after the effective date of such subdivision
or combination. If any event requiring an adjustment under this Section 7.1 occurs during the period that a Conversion Price is
calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.


7.2.
Other Events. In the event that Borrower (or any subsidiary) shall take any action to which the provisions hereof
are not strictly applicable, or, if applicable, would not operate to protect Lender from dilution or if any event occurs of the
type contemplated by the provisions of this Section 7 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then Borrower’s
board of directors shall in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect
the rights of Lender, provided that no such adjustment pursuant to this Section 7.2 will increase the Conversion Price as otherwise
determined pursuant to this Section 7, provided further that if Lender does not accept such adjustments as appropriately protecting
its interests hereunder against such dilution, then Borrower’s board of directors and Lender shall agree, in good faith,
upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination
shall be final and binding and whose fees and expenses shall be borne by Borrower.


8.
Method of Conversion Share Delivery. On or before the close of business on the third (3rd) Trading Day
following each date of delivery of a Conversion Notice (the “Delivery Date”), Borrower shall, provided it is
DWAC Eligible at such time, deliver or cause its transfer agent to deliver the applicable Conversion Shares electronically via
DWAC to the account designated by Lender in the applicable Conversion Notice. If Borrower is not DWAC Eligible, it shall deliver
to Lender or its broker (as designated in the Conversion Notice), via reputable overnight courier, a certificate representing the
number of shares of Common Stock equal to the number of Conversion Shares to which Lender shall be entitled, registered in the
name of Lender or its designee. For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by
the Delivery Date unless Lender or its broker, as applicable, has actually received the certificate representing the applicable
Conversion Shares no later than the close of business on the relevant Delivery Date pursuant to the terms set forth above. Moreover,
and notwithstanding anything to the contrary herein or in any other Transaction Document, in the event Borrower or its transfer
agent refuses to deliver any Conversion Shares to Lender on grounds that such issuance is in violation of Rule 144 under the Securities
Act of 1933, as amended (“Rule 144”), Borrower shall deliver or cause its transfer agent to deliver the applicable
Conversion Shares to Lender with a restricted securities legend, but otherwise in accordance with the provisions of this Section
8. In conjunction therewith, Borrower will also deliver to Lender a written opinion from its counsel or its transfer agent’s
counsel opining as to why the issuance of the applicable Conversion Shares violates Rule 144.


9.
Conversion Delays. If Borrower fails to deliver Conversion Shares in accordance with the timeframe stated in Section
8, Lender, at any time prior to selling all of those Conversion Shares, may rescind in whole or in part that particular Conversion
attributable to the unsold Conversion Shares, with a corresponding increase to the Outstanding Balance (any returned amount will
tack back to the Purchase Price Date for purposes of determining the holding period under Rule 144). In addition, for each Conversion,
in the event that Conversion Shares are not delivered by the fourth (4th) Trading Day (inclusive of the day of the Conversion),
a late fee equal to the greater of (a) $500.00 and (b) 2% of the applicable Conversion Share Value rounded to the nearest multiple
of $100.00 (but in any event the cumulative amount of such late fees for each Conversion shall not exceed 200% of the applicable
Conversion Share Value) will be assessed for each day after the third (3rd) Trading Day (inclusive of the day of the
Conversion) until Conversion Share delivery is made; and such late fee will be added to the Outstanding Balance (such fees, the
“Conversion Delay Late Fees”). For illustration purposes only, if Lender delivers a Conversion Notice to Borrower
pursuant to which Borrower is required to deliver 100,000 Conversion Shares to Lender and on the Delivery Date such Conversion
Shares have a Conversion Share Value of $20,000.00 (assuming a Closing Trade Price on the Delivery Date of $0.20 per share of Common
Stock), then in such event a Conversion Delay Late Fee in the amount of $500.00 per day (the greater of $500.00 per day and $20,000.00
multiplied by 2%, which is $400.00) would be added to the Outstanding Balance of the Note until such Conversion Shares are delivered
to Lender. For purposes of this example, if the Conversion Shares are delivered to Lender twenty (20) days after the applicable
Delivery Date, the total Conversion Delay Late Fees that would be added to the Outstanding Balance would be $10,000.00 (20 days
multiplied by $500.00 per day). If the Conversion Shares are delivered to Lender one hundred (100) days after the applicable Delivery
Date, the total Conversion Delay Late Fees that would be added to the Outstanding Balance would be $40,000.00 (100 days multiplied
by $500.00 per day, but capped at 200% of the Conversion Share Value).


10.
Ownership Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents,
if at any time Lender shall or would be issued shares of Common Stock under any of the Transaction Documents, but such issuance
would cause Lender (together with its affiliates) to beneficially own a number of shares exceeding 4.99% of the number of shares
of Common Stock outstanding on such date (including for such purpose the shares of Common Stock issuable upon such issuance) (the
“Maximum Percentage”), then Borrower must not issue to Lender shares of Common Stock which would exceed the
Maximum Percentage. For purposes of this section, beneficial ownership of Common Stock will be determined pursuant to Section 13(d)
of the 1934 Act. The shares of Common Stock issuable to Lender that would cause the Maximum Percentage to be exceeded are referred
to herein as the “Ownership Limitation Shares”. Borrower will reserve the Ownership Limitation Shares for the
exclusive benefit of Lender. From time to time, Lender may notify Borrower in writing of the number of the Ownership Limitation
Shares that may be issued to Lender without causing Lender to exceed the Maximum Percentage. Upon receipt of such notice, Borrower
shall be unconditionally obligated to immediately issue such designated shares to Lender, with a corresponding reduction in the
number of the Ownership Limitation Shares. Notwithstanding the forgoing, the term “4.99%” above shall be replaced with
“9.99%” at such time as the Market Capitalization is less than $10,000,000.00. Notwithstanding any other provision
contained herein, if the term “4.99%” is replaced with “9.99%” pursuant to the preceding sentence, such
increase to “9.99%” shall remain at 9.99% until increased, decreased or waived by Lender as set forth below. By written
notice to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to itself but any such waiver will not be
effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement is enforceable, unconditional and
non-waivable and shall apply to all affiliates and assigns of Lender.


11.
Payment of Collection Costs. If this Note is placed in the hands of an attorney for collection or enforcement prior
to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Lender
otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note, then Borrower shall pay
the costs incurred by Lender for such collection, enforcement or action including, without limitation, attorneys’ fees and
disbursements. Borrower also agrees to pay for any costs, fees or charges of its transfer agent that are charged to Lender pursuant
to any Conversion or issuance of shares pursuant to this Note.


12.
Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender
has the right to have any such opinion provided by its counsel. Lender also has the right to have any such opinion provided by
Borrower’s counsel.


13.
Governing Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of
Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. The provisions set
forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference.


14.
Resolution of Disputes.


14.1.
Arbitration of Disputes. By its acceptance of this Note, each party agrees to be bound by the Arbitration Provisions
(as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.


14.2.
Calculation Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any Calculation
(as defined in the Purchase Agreement), such dispute will be resolved in the manner set forth in the Purchase Agreement.


15.
Cancellation. After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in
full, shall automatically be deemed canceled, and shall not be reissued.


16.
Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this
Note.


17.
Assignments. Borrower may not assign this Note without the prior written consent of Lender. This Note and any shares
of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by Lender without the consent
of Borrower.


18.
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Note
and the documents and instruments entered into in connection herewith.


19.
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall
be given in accordance with the subsection of the Purchase Agreement titled “Notices.”


20.
Liquidated Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or
provisions of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because
of the parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant
factors. Accordingly, Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed
under this Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under
Lender’s and Borrower’s expectations that any such liquidated damages will tack back to the Purchase Price Date for
purposes of determining the holding period under Rule 144).


21.
Waiver of Jury Trial. EACH OF LENDER AND BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND
THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR THE RELATIONSHIPS OF THE PARTIES
HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE
STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING
SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.


22.
Voluntary Agreement. Borrower has carefully read this Note and has asked any questions needed for Borrower to understand
the terms, consequences and binding effect of this Note and fully understand them. Borrower has had the opportunity to seek the
advice of an attorney of Borrower’s choosing, or has waived the right to do so, and is executing this Note voluntarily and
without any duress or undue influence by Lender or anyone else.


23.
Severability. If any part of this Note is construed to be in violation of any law, such part shall be modified to
achieve the objective of Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in
full force and effect.


[Remainder of page intentionally left blank;
signature page follows]




    	 



    	 



    

IN WITNESS WHEREOF,
Borrower has caused this Note to be duly executed as of the Effective Date.


BORROWER:


Mountain
High Acquisitions Corp.


 


 


By: /s/ Alan m Smith


Name: Alan Smith


Title: CEO


 


ACKNOWLEDGED, ACCEPTED AND AGREED:


LENDER:


St.
George Investments LLC


 


By: Fife Trading, Inc., Manager


 


 


By:  /s/
John M. Fife


John M. Fife, President


 


 


 


 


 




    	 



    	 



    

ATTACHMENT 1


DEFINITIONS


 


For purposes
of this Note, the following terms shall have the following meanings:


A1.
“Bloomberg” means Bloomberg L.P. (or if that service is not then reporting the relevant information regarding
the Common Stock, a comparable reporting service of national reputation selected by Lender and reasonably satisfactory to Borrower).


A2.
“Closing Bid Price” and “Closing Trade Price” means the last closing bid price and
last closing trade price, respectively, for the Common Stock on its principal market, as reported by Bloomberg, or, if its principal
market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as
the case may be) then the last bid price or last trade price, respectively, of the Common Stock prior to 4:00:00 p.m., New
York time, as reported by Bloomberg, or, if its principal market is not the principal securities exchange or trading market for
the Common Stock, the last closing bid price or last trade price, respectively, of the Common Stock on the principal securities
exchange or trading market where the Common Stock is listed or traded as reported by Bloomberg, or if the foregoing do not apply,
the last closing bid price or last trade price, respectively, of the Common Stock in the over-the-counter market on the electronic
bulletin board for the Common Stock as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is
reported for the Common Stock by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers
for the Common Stock as reported by OTC Markets Group, Inc., and any successor thereto. If the Closing Bid Price or the Closing
Trade Price cannot be calculated for the Common Stock on a particular date on any of the foregoing bases, the Closing Bid Price
or the Closing Trade Price (as the case may be) of the Common Stock on such date shall be the fair market value as mutually determined
by Lender and Borrower. If Lender and Borrower are unable to agree upon the fair market value of the Common Stock, then such dispute
shall be resolved in accordance with the procedures in Section 14.2. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.


A3.
“Conversion Share Value” means the product of the number of Conversion Shares deliverable pursuant to
any Conversion multiplied by the Closing Trade Price of the Common Stock on the Delivery Date for such Conversion.


A4.
“Default Effect” means multiplying the Outstanding Balance as of the date the applicable Event of Default
occurred by (a) 15% for each occurrence of any Major Default, or (b) 5% for each occurrence of any Minor Default, and then adding
the resulting product to the Outstanding Balance as of the date the applicable Event of Default occurred, with the sum of the foregoing
then becoming the Outstanding Balance under this Note as of the date the applicable Event of Default occurred; provided that the
Default Effect may only be applied three (3) times hereunder with respect to Major Defaults and three (3) times hereunder with
respect to Minor Defaults; and provided further that the Default Effect shall not apply to any Event of Default pursuant to Section
4.1(b) hereof.


A5.
“DTC” means the Depository Trust Company or any successor thereto.


A6.
“DTC Eligible” means, with respect to the Common Stock, that such Common Stock is eligible to be deposited
in certificate form at the DTC, cleared and converted into electronic shares by the DTC and held in the name of the clearing firm
servicing Lender’s brokerage firm for the benefit of Lender.


A7.
“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer program.


A8.
“DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.


A9.
“DWAC Eligible” means that (a) Borrower’s Common Stock is eligible at DTC for full services pursuant
to DTC’s operational arrangements, including without limitation transfer through DTC’s DWAC system, (b) Borrower has
been approved (without revocation) by DTC’s underwriting department, (c) Borrower’s transfer agent is approved as an
agent in the DTC/FAST Program, (d) the Conversion Shares are otherwise eligible for delivery via DWAC; (e) Borrower has previously
delivered all Conversion Shares to Lender via DWAC; and (f) Borrower’s transfer agent does not have a policy prohibiting
or limiting delivery of the Conversion Shares via DWAC.


A10.
“Fundamental Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly
or indirectly, in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries
is the surviving corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or indirectly,
in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially
all of its respective properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries shall,
directly or indirectly, in one or more related transactions, allow any other person or entity to make a purchase, tender or exchange
offer that is accepted by the holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any
shares of voting stock of Borrower held by the person or persons making or party to, or associated or affiliated with the persons
or entities making or party to, such purchase, tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall,
directly or indirectly, in one or more related transactions, consummate a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person or
entity whereby such other person or entity acquires more than 50% of the outstanding shares of voting stock of Borrower (not including
any shares of voting stock of Borrower held by the other persons or entities making or party to, or associated or affiliated with
the other persons or entities making or party to, such stock or share purchase agreement or other business combination), or (v) Borrower
or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize or reclassify
the Common Stock, other than an increase in the number of authorized shares of Borrower’s Common Stock, or (b) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations
promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding voting stock of Borrower.


A11.
“Major Default” means any Event of Default occurring under Sections 4.1(a), 4.1(k), or 4.1(o) of this
Note.


A12.
“Mandatory Default Amount” means the greater of (a) the Outstanding Balance divided by the Conversion
Price on the date the Mandatory Default Amount is demanded, multiplied by the VWAP on the date the Mandatory Default Amount is
demanded, or (b) the Outstanding Balance following the application of the Default Effect.


A13.
“Market Capitalization” means a number equal to (a) the average VWAP of the Common Stock for the immediately
preceding fifteen (15) Trading Days, multiplied by (b) the aggregate number of outstanding shares of Common Stock as reported on
Borrower’s most recently filed Form 10-Q or Form 10-K.


A14.
“Minor Default” means any Event of Default that is not a Major Default.


A15.
“OID” means an original issue discount.


A16.
“Optional Prepayment Liquidated Damages Amount” means an amount equal to the difference between (a) the
product of (i) the number of shares of Common Stock obtained by dividing (1) the applicable Optional Prepayment Amount by (2) the
Conversion Price as of the date Borrower delivered the applicable Optional Prepayment Amount to Lender, multiplied by (ii) the
Closing Trade Price of the Common Stock on the date Borrower delivered the applicable Optional Prepayment Amount to Lender, and
(b) the applicable Optional Prepayment Amount paid by Borrower to Lender. For illustration purposes only, if the applicable Optional
Prepayment Amount were $50,000.00, the Conversion Price as of the date the Optional Prepayment Amount was paid to Lender was equal
to $0.75 per share of Common Stock, and the Closing Trade Price of a share of Common Stock as of such date was equal to $1.00,
then the Optional Prepayment Liquidated Damages Amount would equal $16,666.67 computed as follows: (a) $66,666.67 (calculated as
(i) (1) $50,000.00 divided by (2) $0.75 multiplied by (ii) $1.00) minus (b) $50,000.00.


A17.
“Other Agreements” means, collectively, (a) all existing and future agreements and instruments between,
among or by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and (b) any financing
agreement or a material agreement that affects Borrower’s ongoing business operations.


A18.
“Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased,
as the case may be, pursuant to the terms hereof for payment, Conversion, offset, or otherwise, plus the OID, the Transaction Expense
Amount, accrued but unpaid interest, collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer,
stamp, issuance and similar taxes and fees related to Conversions, and any other fees or charges (including without limitation
Conversion Delay Late Fees) incurred under this Note.


A19.
“Purchase Price Date” means the date the Purchase Price is delivered by Lender to Borrower.


A20.
“Trading Day” means any day on which the New York Stock Exchange is open for trading.


A21.
“VWAP” means the volume weighted average price of the Common stock on the principal market for a particular
Trading Day or set of Trading Days, as the case may be, as reported by Bloomberg.




    	 



    	 



    

EXHIBIT A


St. George Investments LLC


303 East Wacker Drive, Suite 1040


Chicago, Illinois 60601


 


Mountain High Acquisitions Corp.                                               Date: __________________


Attn: Alan Smith, CEO


6501 West Greenway Pkwy, Suite 103-412


Scottsdale, Arizona 85254


 


CONVERSION NOTICE


 


The above-captioned Lender hereby gives notice
to Mountain High Acquisitions Corp., a Colorado corporation (the “Borrower”), pursuant to that certain Convertible
Promissory Note made by Borrower in favor of Lender on January 23, 2018 (the “Note”), that Lender elects to
convert the portion of the Note balance set forth below into fully paid and non-assessable shares of Common Stock of Borrower as
of the date of conversion specified below. Said conversion shall be based on the Conversion Price set forth below. In the event
of a conflict between this Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender
in its sole discretion, Lender may provide a new form of Conversion Notice to conform to the Note. Capitalized terms used in this
notice without definition shall have the meanings given to them in the Note.


		A.	Date of Conversion: ____________



		B.	Conversion #: ____________



		C.	Conversion Amount: ____________



		D.	Conversion Price: _______________



		E.	Conversion Shares: _______________ (C divided by D)



		F.	Remaining Outstanding Balance of Note: ____________*



* Subject to adjustments for corrections,
defaults, interest and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms
of which shall control in the event of any dispute between the terms of this Conversion Notice and such Transaction Documents.


 


Please transfer the Conversion Shares
electronically (via DWAC) to the following account:


Broker:
_____________________                        Address:
_______________________


DTC#: _____________________                                       _______________________


Account #: __________________                                       _______________________


Account Name: ______________


 


To the extent the Conversion
Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender
via reputable overnight courier after receipt of this Conversion Notice (by facsimile transmission or otherwise) to:


_____________________________________


_____________________________________


_____________________________________


 


Sincerely,


 


Lender:


 


St.
George Investments LLC


 


By: Fife Trading, Inc., Manager


 


 


By: __________________________


John M. Fife, President