SHAREHOLDER ALERT – KushCo Holdings, Inc. (KSHB) Bronstein, Gewirtz & Grossman, LLC Announces Class Action and Lead Plaintiff Deadline: July 1, 2019
NEW YORK, May 16, 2019 (GLOBE NEWSWIRE) — Attorney Advertising — Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against KushCo Holdings, Inc. (“KushCo” or the “Company”) (OTCMKTS: KSHB) and certain of its officers, on behalf of shareholders who purchased or otherwise acquired KushCo securities between July 13, 2017 and April 9, 2019, both dates inclusive. Such investors are encouraged to join this case by visiting the firm’s site: www.bgandg.com/kshb.
This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
KushCo primarily engages in the wholesale distribution of packaging supplies in the United States, Canada, Europe, and internationally. KushCo offers pop-top bottles; child resistant exit, paper exit, and foil barrier bags; tubes; and polystyrene, silicone-lined polystyrene or glass containers. KushCo also provides vaporizer cartridges, heating technologies, batteries, and disposable units; and hydrocarbon gases, including isobutene, n-butane, propane, ethanol, pre-mixes, custom blends, and other solvents.
In the past several years, KushCo has expanded its services through the acquisition of several companies in the cannabis industry. For example, in May 2017, KushCo 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 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 acquired The Hybrid Creative (“Hybrid”), a self-described premier creative agency for cannabis ventures, including branding, marketing, web, and strategy.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) KushCo made material accounting errors in connection with its acquisitions of CMP Wellness, Summit, and Hybrid; (ii) as a result, KushCo’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; (iii) KushCo’s net loss for the fiscal year ended August 31, 2018, was more than twice as high than previously reported; (iv) KushCo 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 (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On April 9, 2019, KushCo issued a press release, attached as an exhibit to the Company’s Current Report on Form 8-K (the “April 2019 8-K”), announcing 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.
Specifically, the April 2019 8-K disclosed 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.
On this news, KushCo’s stock price fell $0.45 per share, or 7.76%, to close at $5.35 on April 10, 2019.
If you wish to review a copy of the Complaint you can visit the firm’s site: www.bgandg.com/kshb or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in KushCo you have until July 1, 2019 to request that the Court appoint you as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff.
Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm’s expertise includes general corporate and commercial litigation, as well as securities arbitration. Attorney advertising. Prior results do not guarantee similar outcomes.
Source: Globe NewsWire West