Current Report Filing (8-k)
26 September 2019 - 5:02PM
Edgar (US Regulatory)
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):
September 26, 2019
KUSHCO HOLDINGS, INC.
(Exact name of registrant as specified in
its charter)
Nevada
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000-55418
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46-5268202
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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6261 Katella Ave Ste 250, Cypress, CA
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90630
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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
(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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¨
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Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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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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¨
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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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Securities registered pursuant to Section 12(b) of the Act:
None.
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 1.01
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Entry into a Material Definitive Agreement.
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On September 26, 2019, KushCo Holdings,
Inc. (the “Company”) entered into securities purchase agreements (each a “Purchase Agreement” and collectively,
the “Purchase Agreements”) with certain investors identified on the signature pages thereto (the “Purchasers”)
pursuant to which the Company agreed to issue and sell an aggregate of 17,197,570 units (the “Units”), with each unit
consisting of one share of the Company’s common stock, par value $0.001 per share (the “Common Stock”) and a
warrant (each a “Warrant” and collectively, the “Warrants”) to purchase half a share of Common Stock, in
a registered direct offering (the “Offering”). The Units were offered by the Company pursuant to the Company’s
shelf registration statement on Form S-3 (File No. 333-231019) filed with the Securities and Exchange Commission (the “Commission”)
on April 25, 2019, and declared effective on May 6, 2019. Subject to certain ownership limitations, the Warrants will be immediately
exercisable at an exercise price equal to $2.25 per share of Common Stock. The Warrants are exercisable for five years from the
date of issuance.
The purchase price for a Unit is $1.75.
The closing of the Offering is expected to occur on or about September 30, 2019. The Company expects the aggregate gross proceeds
from the Offering to be approximately $30.1 million. The Company expects the aggregate net proceeds from the Offering, after deducting
the placement agent fees and other estimated offering expenses, to be approximately $27.4 million. The Company intends to use the
aggregate net proceeds for working capital and for other general corporate purposes.
The Purchase Agreements contain customary
representations, warranties and agreements by the Company and customary conditions to closing. Under the Purchase Agreements, the
Company has agreed, subject to certain exceptions, not to enter into any agreement to issue or announce the issuance or proposed
issuance of any Common Stock or Common Stock equivalents for a period of 90 days following the Offering.
Jefferies LLC (“Jefferies”)
and A.G.P./Alliance Global Partners (“A.G.P.”) are acting as co-lead placement agents for the Offering (the “Placement
Agents”).
The Company agreed to pay the Placement
Agents an aggregate cash fee equal to 7% of the aggregate gross proceeds raised in the Offering pursuant to a Placement Agency
Agreement entered into by the Company and the Placement Agents on September 26, 2019 (the “Placement Agency Agreement”).
The Company also agreed to reimburse the Placement Agents for certain fees and expenses, including up to $100,000 in the aggregate
for the fees and expenses of the Placement Agents’ counsel.
The foregoing summaries of the Warrants,
the Purchase Agreements and the Placement Agency Agreement (the “Transaction Documents”) do not purport to be complete
and are qualified in their entirety by reference to the full texts of the form of Warrant, the form of Purchase Agreement and the
Placement Agency Agreement that are filed herewith as Exhibits 4.1, 10.1 and 10.2, respectively. The representations, warranties
and covenants contained in Transaction Documents were made only for purposes of such agreements and as of specific dates, were
solely for the benefit of the parties to the Transaction Documents, and may be subject to limitations agreed upon by the contracting
parties. Accordingly, the Transaction Documents are incorporated herein by reference only to provide investors with information
regarding the terms of the Transaction Documents, and not to provide investors with any other factual information regarding the
Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other
filings with the Commission.
This Current Report on Form 8-K does not
constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state
or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the
securities laws of any such state or jurisdiction.
On September 26, 2019, the Company issued a press release regarding
the Offering. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01.
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Financial Statements and Exhibits
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Exhibit
Number
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Description of Exhibit
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4.1
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Form of Warrant
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5.1
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Opinion of Holley, Driggs, Walch, Fine, Puzey, Stein & Thompson, LTD
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10.1
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Form of Securities Purchase Agreement dated September 26, 2019
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10.2
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Placement Agency Agreement dated as of September 26, 2019
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23.1
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Consent of Holley, Driggs, Walch, Fine, Puzey, Stein & Thompson, LTD (included in Exhibit 5.1)
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99.1
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Press Release of KushCo Holdings, Inc. dated as of September 26, 2019
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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.
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KUSHCO HOLDINGS, INC.
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(Registrant)
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September 26, 2019
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/s/ Nicholas Kovacevich
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(Date)
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Nicholas Kovacevich
Chairman and Chief Executive Officer
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