UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 8-K

  

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 31, 2020

  

KUSHCO HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada 000-55418 46-5268202
(State or other jurisdiction
of incorporation)  		(Commission File Number)  (IRS Employer Identification No.) 

 

6261 Katella Ave Ste 250, Cypress, CA 90630
(Address of principal executive offices) (Zip Code)

 

Registrant's telephone number, including area code:   (714) 243-4311

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None

 

 Title of each class  Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.001 per share KSHB OTCQX

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

 

 

 

 

 

Item 7.01 Regulation FD Disclosure.

 

On January 31, 2020, KushCo Holdings, Inc. (the “Company”) issued a news release, a copy of which is furnished herewith as Exhibit 99.1 and is incorporated herein by reference, announcing that the Company has reached agreement to acquire a minority ownership interest in Xtraction Services Holding Corp. (CSE: XS; OTCQB: XSHLF).

 

References to KushCo Holdings, Inc.’s website, Xtraction Services Holding Corp.’s website, and/or other social media sites or platforms in the release do not incorporate by reference the information on such websites, social media sites or platforms into this Current Report on Form 8-K, and the Company disclaims any such incorporation by reference. The information in the news release attached as Exhibit 99.1 is incorporated by reference into this Item 7.01 in satisfaction of the public disclosure requirements of Regulation FD. This information is “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and is not otherwise subject to the liabilities of that section. Such information may be incorporated by reference in another filing under the Securities Exchange Act of 1934 or the Securities Act of 1933 only if and to the extent such subsequent filing specifically references the information incorporated by reference herein.

 

Item 9.01.

   

(d) Exhibits.

 

Exhibit

Number

  Title
99.1

Press Release issued by KushCo Holdings, Inc. on January 31, 2020 announcing acquisition of minority ownership interest in Xtraction Services Holding Corp.

 

 

 

 

 

SIGNATURE

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    KUSHCO HOLDINGS, INC.
    (Registrant)
     
January 31, 2020   /s/   Nicholas Kovacevich
(Date)   Nicholas Kovacevich
Chairman and Chief Executive Officer

 

 

 

 

 

 

 

 

Exhibit 99.1

 

 

 

 

KushCo Holdings to Offer Equipment Financing to Network of Thousands of Cannabis and CBD Operators by Acquiring Interest in Xtraction Services

 

Company’s Strategic Partnership Includes 19.9% Ownership Interest in Xtraction Services

 

CYPRESS, Calif., — January 31, 2020 — KushCo Holdings, Inc. (OTCQX: KSHB) (''KushCo'' or the ''Company''), the premier producer of ancillary products and services to the legal cannabis and CBD industries, has partnered with Xtraction Services Holding Corp. (CSE: XS; OTCQB: XSHLF) (“Xtraction Services” or “XS”), a rapidly growing specialty finance company that provides equipment leasing solutions to owners and operators of cannabis and hemp companies in the United States, to offer equipment financing to KushCo’s network of thousands of compliant cannabis and CBD operators.

 

Founded in 2017, Xtraction Services specializes in providing equipment financing solutions to cultivators, oil processors, manufacturers, and testing laboratories, among others. The company also provides a full range of consulting services, including equipment selection and procurement through its network of preferred vendor partnerships with original equipment manufacturers (OEMs) and equipment distributors. Along with a comprehensive suite of on-site support services, Xtraction Services is able to provide a complete end-to-end solution for the legal cannabis and hemp industries, which have lacked traditional sources of capital since inception.

 

“For the past several months, we have been evaluating ways in which we can successfully enter the equipment financing arena, which we identified early on as being another growth driver and margin accretive business that can significantly complement our existing ecosystem of ancillary products and services,” said Nick Kovacevich, KushCo’s Co-founder, Chief Executive Officer, and Chairman. “After much due diligence and internal review, we realized that an investment in and partnership with Xtraction Services—who has already built a robust equipment financing platform, including relationships with more than 70 OEMs and distributors across the laboratory, testing, processing, and extraction space—is the best option for KushCo and our customers. We can now not only indirectly offer our customers the equipment financing solutions they have been requesting but also, in the case of CBD, directly facilitate the delivery of the hemp biomass that will be used in the extraction process as well as delivery of the offtake products to our network of brands whom we are helping place into mainstream retail. Altogether, this strategic move represents an excellent entry point to provide highly demanded equipment financing solutions to our customers, generate attractive recurring revenue streams and higher margins, and cross-sell our customer base even further to earn a bigger share of every transaction in the legal cannabis and CBD industries.”

 

David Kivitz, Xtraction Services’ Chief Executive Officer, added: “Since 2017, we have been able to leverage our extensive experience in specialty finance, underwriting, and cannabis and hemp oil processing to provide our customers with much-needed equipment financing solutions that can reduce the need for excessive capital expenditures and start-up costs. Whether it’s for extraction, trimming, or testing machines, these customers have increasingly been turning to us to finance and, in some cases, to free up incremental cash to grow their businesses. KushCo represents an ideal partner for Xtraction Services largely due to its deep and robust customer network that is continually seeking products and services complementary to equipment financing, from securing compliant hemp biomass, hydrocarbons and solvents critical to the extraction process, to moving the finished products into a wide array of distribution channels, including to many of the brands KushCo regularly works with across the country. We are truly excited to combine our collective strengths in equipment financing and deep customer relationships to make a substantial impact in this underappreciated yet essential step in our industry’s value chain.”

 

 

 

 

Under the terms of the agreement, KushCo will receive 19.9% of the basic outstanding equity interests of Xtraction Services, on an as-converted basis, in the form of Proportionate Voting Shares (the “XS Shares”). Upon the closing of the transaction, the Company will pay Xtraction Services shares of KushCo whose value shall be equivalent to 19.9% of Xtraction Services’ market capitalization, assuming conversion of the XS shares into subordinate voting shares.

 

In addition, KushCo and Xtraction Services will enter into a strategic partnership to facilitate long-term cooperation and development of business opportunities, including participation in joint marketing and promotional campaigns, as well as rights of first refusal to both parties for the delivery of each company’s products and services to their respective customers.

 

About KushCo Holdings

 

KushCo Holdings, Inc. (OTCQX: KSHB) (www.kushco.com) is the premier producer of ancillary products and services to the legal cannabis and CBD industries. KushCo Holdings' subsidiaries and brands provide product quality, exceptional customer service, compliance knowledge and a local presence in serving its diverse customer base.

 

Founded in 2010, KushCo Holdings has now sold more than 1 billion units to growers, processors and producers across North America, South America, and Europe.

 

The Company has been featured in media nationwide, including CNBC, Fox News, Yahoo Finance, Cheddar, Los Angeles Times, TheStreet.com, and Entrepreneur, Inc Magazine. While KushCo Holdings provides products and solutions to customers in the cannabis and CBD industries, it has no direct involvement with the cannabis plant or any products that contain THC.

 

For more information, visit www.kushco.com or call (888) 920-5874.

 

KushCo Holdings Contact

 

Investor Contact:

Najim Mostamand, CFA

Director of Investor Relations

714-539-7653

ir@kushco.com