Kuschco Holdings Inc. (OTCMKST:KSHB) has announced that it has signed a definitive agreement with various investors to acquire and sell 10 million units.
KushCo generate $16 million from the share sale
Each unit will consist of one common share for $0.01 per share. The agreement also includes warrants to acquire half a common share at an offering price of $1.60 per unit according to the registered direct offering. The warrants will be exercised at $2 per share and will be exercisable immediately with they have an expiry of five years from the day of issuance.
The company will realize gross proceeds from the offering of around $16 million before factoring the placement agent fees as well as other anticipated offering expenses. KushCo will use the net proceeds of the transaction as working capital and for other general corporate uses. The company expected the closing of the registered direct offering to occur on or by February 10, 2020. However, all this will be subject to the necessary customary closing requirements.
KushCo partners with Xtraction Services
The company recently announced a partnership with Xtraction Services Holding Corp (OTCMKTS: XSHLF). Xtraction Services, which is a finance company that offers equipment leasing solutions, will provide equipment financing to KushCo Holding’s compliant cannabis and CBD operators. Xtraction Services provides equipment financing solutions to cannabis and hemp cultivators, processors, and manufacturers. Equally, the company provides consulting services such as equipment selection, procurement, and equipment distribution.
KushCo CEO and Chairman Nick Kovacevich indicated that in recent months they have been assessing ways of entering the equipment financing arena. He added that the segment is a growth driver as well as a margin accretive business that can meaningfully supplement KushCo’s current ecosystem of ancillary products and services in the cannabis industry.
Kovacevich stated that after internal review and due diligence the company realized that a partnership with Xtraction Services was in the best interest of the company and its customers. The CEO affirmed that this strategic partnership is a good opportunity to offer KushCo customers equipment financing solutions as well as generate more revenue.
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