Blum Holdings Inc (BLMH)

[Magnum7419]

Convertible Notes

As of the date of this Prospectus, we have outstanding Notes convertible into up to 20,654,103 shares of Common Stock; however we have reserved 41,308,206 shares of Common Stock for issuance upon conversion of the Notes, all of which are registered in this Registration Statement. Each Note is convertible at a rate equal to 90% of the-20 day VWAP of our Common Stock prior to February 5, 2014, which price the Company estimates to be approximately $0.30753 per share, subject to adjustment.