Repayment of the note, which the company said was done to support sales growth, realigns KushCo’s capital structure and significantly reduces its total debt outstanding
KushCo Holdings Inc (OTCQX:KSHB) announced Monday that it has paid $17 million to retire its senior unsecured term debt, represented by a senior note originally issued in April 2019.
Repayment of the note, which the company said was done to support sales growth, realigns KushCo’s capital structure and significantly reduces its total debt outstanding. The company also recently closed a $40 million registered direct offering, which was oversubscribed with commitments in excess of $125 million.
“Following nearly a year of comprehensive restructuring and right-sizing- which saw us return to growth, reduce our cost structure by more than 50% and achieve positive adjusted EBITDA for two consecutive quarters, more high-quality institutional investors are beginning to appreciate KushCo’s investment thesis, as evidenced by our recent oversubscribed offering,” CEO Nick Kovacevich said in a statement.
READ: KushCo moves ahead with $40M registered direct offering to pay down debt, advance other business purposes
“With this capital, we have not only completely retired our term debt- which was set to mature in April 2021, and which we believe has been a material overhang on our stock, but have also paid down the balance of our existing line of credit, significantly reducing our total debt outstanding. We also have a healthy amount of capital left from the raise to support our continued growth and fund the business’ sales and financial goals for at least the remainder of fiscal 2021.
KushCo’s products and services include:
- Vaporizer hardware and technology (about 60% of the company’s revenue), producing cartridges, pod systems and batteries with a variety of core materials and heating technologies;
- Packaging, papers and supplies (about 30% of the company’s revenue), which encompasses manufacturing child-resistant compatible, fully customizable and CBD packaging plus compliant labels and processing supplies;
- Energy and natural products (around 10% of the company’s revenue), which includes cannabis and CBD-based hydrocarbons, solvents and food-safe oils, as well as investments in stainless steel storage tanks;
- CBD services, such as retail execution, merchandising, and sales management for compliant hemp-derived CBD products, along with hemp trading solutions for growers and processors; and
- Equipment financing through the company’s strategic partnership with , in which KushCo owns an approximate 19.5% equity stake
Overall, we believe this is an incredible achievement for the Company, and the latest sign that we are becoming more in control of our own destiny and moving closer toward establishing ourselves as the preeminent provider of all ancillary solutions to the legal cannabis and CBD industries.”
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