KushCo Holdings, Inc. (OTC: KSHB) Investor Securities Class Action Lawsuit 04/30/2019

If you purchased a significant amount of shares of KushCo Holdings, Inc. (OTC: KSHB) between July 13, 2017 and April 9, 2019, and / or if you purchased any OTC: KSHB shares prior to July 2017 and continue to hold any of those shares, you have certain options and for certain investors are short and strict deadlines running. Deadline: July 1, 2019. OTC: KSHB investors should contact the Shareholders Foundation, Inc.

To have your information reviewed for options and to recieve notifications about this case, please use this form. You may also send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Company Name(s): 
KushCo Holdings
Case Name: 
KushCo Holdings Shareholder Class Action Lawsuit 04/30/2019
Case Status: 
Lawsuit Filed
Affected Securities
OTC: KSHB
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
04/30/2019
Class Period Begin: 
07/13/2017
Class Period End: 
04/09/2019
Court of Filing: 
U.S. District Court for the Central District of California
Summary: 

An investor in shares of KushCo Holdings, Inc. (OTC: KSHB) filed a lawsuit in the U.S. District Court for the Central District of California over alleged violations of Federal Securities Laws by KushCo Holdings, Inc. in connection with certain allegedly false and misleading statements made between July 13, 2017 and April 9, 2019.

Garden Grove, CA based KushCo Holdings, Inc. primarily engages in the wholesale distribution of packaging supplies in the United States, Canada, Europe, and internationally. KushCo Holdings, Inc. reported that its Total Revenue rose from $18.79 million for the 12 months period that ended on August 31, 2017 to $52.07 million for the 12 months period that ended on August 31, 2018 and that its Net Income of $1.65 million for the 12 months period that ended on August 31, 2017 declined to a Net Loss of $24.33 million for the 12 months period that ended on August 31, 2018.

In the past several years, KushCo Holdings, Inc has expanded its services through the acquisition of several companies in the cannabis industry. For example, in May 2017, KushCo Holdings, Inc acquired CMP Wellness LLC (“CMP Wellness”), a privately-held manufacturer and distributor of Med-ePen brand vaporizer pens, cartridges, tanks, and accessories. Then, in May 2018, KushCo Holdings, Inc acquired Summit Innovations, LLC (“Summit”), a distributor of hydrocarbon products, such as propane and butane, to the legal cannabis industry. Finally, in July 2018, KushCo Holdings, Inc acquired The Hybrid Creative (“Hybrid”), a self-described premier creative agency for cannabis ventures, including branding, marketing, web, and strategy. On April 9, 2019, KushCo Holdings, Inc announced in a filing with the SEC the Company’s decision to restate prior period financial statements for fiscal years 2017 and 2018 for non-cash items related to acquisitions of CMP Wellness, Summit, and Hybrid.
KushCo Holdings, Inc disclosed in a SEC filing in April 2019 that KushCo had inaccurately accounted for certain shared-settled contingent consideration relating to its CMP Wellness, Summit, and Hybrid acquisitions, by recording their respective earnout arrangements as equity rather than as liabilities.

Shares of KushCo Holdings, Inc. (OTC: KSHB) declined to as low as $4.77 per share on May 2, 2019.

According to the complaint the plaintiff alleges on behalf of purchasers of KushCo Holdings, Inc. (OTC: KSHB) common shares between July 13, 2017 and April 9, 2019, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between July 13, 2017 and April 9, 2019, the Defendants made false and/or misleading statements and/or failed to disclose that KushCo Holdings, Inc made material accounting errors in connection with its acquisitions of CMP Wellness, Summit, and Hybrid, that as a result, KushCo Holdings, Inc’s previously issued financial statements as of and for the fiscal years ended August 31, 2018 and August 31, 2017, included in the Company’s Annual Reports on Form 10-K for such periods, and financial statements as of and for the quarterly periods ended May 31, 2017, November 30, 2017, February 28, 2018, May 31, 2018 and November 30, 2018, included in the Company’s Quarterly Reports on Form 10-Q for such periods, could not be relied upon, that KushCo Holdings, Inc’s net loss for the fiscal year ended August 31, 2018, was more than twice as high than previously reported, that KushCo Holdings, Inc and its management’s assurances that its financial statements for those fiscal years and periods were accurate and fairly reported could not be relied upon, and that as a result, the Company’s public statements were materially false and misleading at all relevant times.