UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2017
Kush Bottles, Inc.
(State or other jurisdiction of incorporation)
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Nevada
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000-55418
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46-5268202
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(State or other jurisdiction
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(Commission file Number)
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(IRS Employer
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of incorporation)
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Identification No.)
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1800 Newport Circle, Santa Ana, CA
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92705
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code:
(714) 243-4311
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(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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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
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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.
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 31, 2017, Chris Martin resigned from his position as Chief Financial Officer of Kush Bottles, Inc. (the “Company”). In connection with Mr. Martin’s resignation, pursuant to his employment agreement with the Company, dated July 28, 2014, Mr. Martin executed and delivered to the Company a release in order to be entitled to the severance amounts described in such employment agreement. The foregoing description of such employment agreement is qualified in its entirety by reference to the full text of the employment agreement, which is filed as Exhibit 10.2 to the Company’s Form 10-12G/A filed on May 29, 2015 and is incorporated herein by reference.
On August 1, 2017, Jim McCormick, age 50, was appointed as the Company’s Chief Financial Officer. Prior to his appointment, from 2016 through 2017, Mr. McCormick served as a management consultant in the consumer goods sector including companies operating within the cannabis industry. From 2014 through 2016, Mr. McCormick served as the Chief Financial Officer of Electronic Cigarettes Group International, a Grand Rapids, Michigan based electronic cigarette marketing and distribution company. Prior to this Mr. McCormick served as the Chief Financial Officer of the corporate services division of Sodexo North America, a global provider of food and facilities management services. In addition, Mr. McCormick held multiple international Chief Financial Officer roles as a member of British American Tobacco, the second largest international tobacco company, where he was employed from 1992 through 2008.
In connection with his appointment, the Company and Mr. McCormick entered into an Offer Letter dated as of July 3, 2017 (the “Offer Letter”). Pursuant to the Offer Letter, Mr. McCormick will receive an initial annual base salary of $150,000. In addition, Mr. McCormick will have the opportunity to earn an annual bonus of up to $50,000, based on achievement of annual target performance goals, as established by the Company’s board of directors or Chief Executive Officer, in their sole and absolute discretion. Mr. McCormick will also be entitled to receive up to $18,000 of reimbursements for relocation expenses, which will be subject to repayment if, before August 1, 2018, Mr. McCormick voluntarily terminates his employment or is terminated for “cause” (as defined in the Offer Letter). In addition, subject to approval of the Company’s board of directors, Mr. McCormick will be granted options to purchase 600,000 shares of the Company’s common stock, which will vest over three years commencing August 1, 2017, with 1/3 vesting on August 1, 2018, and the remaining 2/3 vesting ratably in equal monthly installments over the remaining two years. The options will be governed by the terms and conditions of a stock option agreement which Mr. McCormick will be required to sign, which terms and conditions will reflect the foregoing and will provide for vesting upon a change of control of the Company, to be specified more fully in such stock option agreement.
The foregoing description of the Offer Letter is qualified in its entirety by reference to the full text of the Offer Letter, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Mr. McCormick has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K, has no arrangement or understanding between him and any other person required to be disclosed pursuant to Item 401(b) of Regulation S-K and has no family relationships required to be disclosed pursuant to Item 401(d) of Regulation S-K.
Item 8.01 Other Events.
On August 3, 2017, the Company issued a press release announcing the resignation of Mr. Martin and the appointment of Mr. McCormick. A copy of the press release is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are attached with this Current Report on Form 8-K:
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10.1
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Offer Letter, dated as of July 3, 2017, by and between Kush Bottles, Inc. and Jim McCormick
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99.1
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Kush Bottles, Inc. Press Release dated August 3, 2017
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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KUSH BOTTLES, INC.
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Date: August 3, 2017
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By:
/s/ Nicholas Kovacevich
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Nicholas Kovacevich
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Chief Executive Officer
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EXHIBIT INDEX
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Number
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Description
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10.1
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Offer Letter, dated as of July 3, 2017, by and between Kush Bottles, Inc. and Jim McCormick
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99.1
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Kush Bottles, Inc. Press Release dated August 3, 2017
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Kush Bottles, Inc.
1800 Newport Circle, Santa Ana, CA
July 3, 2017
Mr. Jim McCormick
Dear Jim,
We are very pleased to offer you a position with KUSH BOTTLES, INC., a Nevada corporation (the “Company”). Your employment is subject to the terms and conditions set forth in this letter.
You will be hired as the full-time Chief Financial Officer, effective July 31, 2017. It is an exempt position. In your capacity as Chief Financial Officer, you will perform duties and responsibilities that are reasonable and consistent with such position as may be assigned to you from time to time. You will report directly to the Chief Executive Officer. You agree to devote your full business time attention and best efforts to the performance of your duties and to the furtherance of the Company’s interests during your employment.
In consideration of your services, you will be paid a salary of $150,000 per year, payable in accordance with the standard payroll practices of the Company and subject to all withholdings and deductions as required by law. Furthermore, for each full year of employment you complete with the Company, you will have the opportunity to earn an annual bonus of up to $50,000, based on achievement of annual target performance goals, as established by the Board of Directors or Chief Executive Officer, in their sole and absolute discretion.
You will also receive up to $18,000 of reimbursement for relocation related expenses. If you voluntarily terminate your employment with Kush Bottles or are terminated for “Cause” prior to twelve (12) months from your hire date, you will be required to reimburse the Company for all relocation expenses paid to you.
In addition, subject to the Company’s Board of Directors’ approval, you will be granted a stock option to purchase six hundred thousand (600,000) shares of the Company’s common stock. The option will vest in accordance with the following three-year vesting schedule: 1/3 of the option shares will vest on the first (1st) anniversary of your employment start date and the remaining 2/3 of the option shares will vest ratably in equal monthly installments over the remaining two (2) years. All terms and conditions of the stock option shall be governed by the terms and conditions of the applicable option agreement, which you will be required to sign. These terms include a “change in control” clause that would accelerate the option vesting period.
If this offer is accepted and you begin employment with the Company, you will be eligible to participate in any benefit plans and programs in effect from time to time, including vacation/Paid Time Off (PTO), group medical and life insurance and disability benefits, and other fringe benefits as are made available to other similarly situated employees of the Company, in accordance with and subject to the eligibility and other provisions of such plans and programs.
You will be subject to all applicable employment and other policies of the Company, as outlined in the Company’s employee handbook and elsewhere.
Your employment will be at-will, meaning that you or the Company may terminate the employment relationship at any time, with or without cause, and with or without notice.
This offer of employment is contingent upon the satisfactory completion of the following requirements:
(a)
Verification of your right to work in the United States, as demonstrated by your completion of the I-9 form upon hire and your submission of acceptable documentation (as noted on the I-9 form) verifying your identity and work authorization within three days of starting employment.
(b)
Your execution of the Company’s form of Employee Proprietary Information and Inventions Agreement.
(c)
Satisfactory completion of a background investigation, reference checks and drug screening.
This offer will be withdrawn if any of the above conditions are not satisfied.
By accepting this offer, you confirm that you are able to accept this job and carry out the work that it would involve without breaching any legal restrictions on your activities, such as restrictions imposed by a current or former employer. You also confirm that you will inform the Company about any such restrictions and provide the Company with as much information about them as possible, including any agreements between you and your current or former employer describing such restrictions on your activities. You further confirm that you will not remove or take any documents or proprietary data or materials of any kind, electronic or otherwise, with you from your current or former employer to the Company without written authorization from your current or former employer. If you have any questions about the ownership of particular documents or other information, discuss such questions with your former employer before removing or copying the documents or information.
All of us at the Company are excited at the prospect of you joining our team. If you have any questions about the above details, please call me immediately. If you wish to accept this position, please sign below and return this letter agreement to me within three business days. This offer is open for you to accept until July 7th, 2017 at which time it will be deemed to be withdrawn.
I look forward to hearing from you.
Yours sincerely,
![[F101002.GIF]](https://content.edgar-online.com/edgar_conv_img/2017/08/03/0001511164-17-000452_F101002.GIF)
![[F991002.GIF]](https://content.edgar-online.com/edgar_conv_img/2017/08/03/0001511164-17-000452_F991002.GIF)
Kush Bottles Appoints Jim McCormick as Chief Financial Officer
SANTA ANA, Calif., August 3, 2017 --
Kush Bottles
(OTCQB: KSHB),
Kush Bottles, Inc. (OTCQB: KSHB), a leading provider of packaging, supplies, vaporizers, accessories, branding solutions and terpenes for the regulated cannabis industry
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announced today it has appointed industry veteran, Mr. Jim McCormick, as Chief Financial Officer (“CFO”), effective August 1, 2017. Mr. Chris Martin, Kush Bottles’ previous CFO, will consult for the Company for approximately three months to ensure a smooth transition period.
Mr. McCormick has extensive CFO experience and has demonstrated financial and strategic leadership in his previous roles in the cannabis and tobacco industries. In his role as Chief Financial Officer, Jim McCormick will lead Kush Bottles’ financial operations. He will also be responsible for managing liquidity, balance sheet risk, and capital market transactions to ensure Kush Bottles remains well positioned to capitalize on growth opportunities. He will report directly to Nick Kovacevich, co-founder and CEO.
Mr. McCormick has recently served as a management consultant where he led business development initiatives in the California cannabis sector. Prior to this role, he was Chief Financial Officer at Electronic Cigarettes Group International. Previously, he was also Senior Vice President and CFO, Corporate Services Division at Sodexo. Mr. McCormick spent the majority of his career in British American Tobacco where he held multiple general management and CFO roles internationally over his sixteen year tenure with the firm.
Nick Kovacevich, Co-Founder & CEO, Kush Bottles, commented, “I am pleased to welcome Jim to the Kush Bottles team. Jim is a highly successful senior leader with extensive CFO experience at both start-ups and global companies, complemented by an entrepreneurial spirit. His deep cross-functional understanding of developing and executing financial strategies is expected to help drive sustainable revenue and earnings performance at Kush Bottles. Furthermore, his lobbying experience and network from his time working in both the cannabis and tobacco sectors will be useful assets to the Company as we navigate the complexities of the cannabis industry.”
Mr. Kovacevich added, “I would also like to thank Chris for all his contributions as CFO over the past three years. He has been instrumental in building Kush Bottles into the dynamic company it is today and I wish him all the best for his future endeavors.”
Jim McCormick, Chief Financial Officer, commented, “Kush Bottles is key player in the emergent legal cannabis industry and I am excited to join the company at a time when it is on the cusp of achieving rapid growth. I hope that, under my strategic direction and leveraging my experience in dynamic regulated industries, the company will go on to achieve even stronger financial results.”
Mr. McCormick has a Master of Business Administration (MBA) from Southern Illinois University, Edwardsville, IL and a Bsc. in Finance & Accounting from Eastern Illinois University, Charleston, IL.
To be added to the distribution list please email ir@kushbottles.com with ‘Kush’ in the subject line.
About Kush Bottles, Inc.
Kush Bottles, Inc. is a dynamic sales platform that provides unique products and services for both businesses and consumers in the cannabis industry.
Founded in 2010 as a packaging and supplies company for dispensaries and growers, Kush Bottles has sold more than 100 million units and now regularly services more than 4,000 legally operated medical and adult-use dispensaries, growers, and producers across North America, South America, and Europe.
The company has facilities in the three largest U.S. cannabis markets and a local sales presence in every major U.S. cannabis market.
Kush Bottles aims to be the gold standard for responsible and compliant products and services in the cannabis industry. Kush Bottles has no direct involvement with cannabis plants or extracts. The company has been featured in media nationwide, including CNBC, Los Angeles Times, TheStreet.com, Entrepreneur, and Inc. Magazine.
For more information, visit www.kushbottles.com or call (888)-920-5874.
Connect:
Website: www.kushbottles.com
Instagram: instagram.com/kushbottles
Facebook: facebook.com/kushbottles
Twitter: twitter.com/kushbottles
Forward-Looking Statements:
This press release may include predictions, estimates or other information that might be considered forward-looking within the meaning of applicable securities laws. While these forward-looking statements represent our current judgments, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this release. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. When used herein, words such as: “potential,” “look forward,” “believe,” “dedicated,” “building,” or variations of such words and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are often discussed in filings we make with the United States Securities and Exchange Commission (SEC), available at: www.sec.gov, and on our website, at: www.kushbottles.com.
Company Contact:
Ryan Selewicz
Director of Marketing
714-243-4017
ryan@kushbottles.com
Investor Contact:
Elizabeth Barker / Phil Carlson
KCSA Strategic Communications
212-896-1203 / 212-896-1233
ir@kushbottles.com