In a move that signifies a deepened commitment to supporting the Controlled Environment Agriculture and cannabis sectors, urban-gro, Inc. (Nasdaq: UGRO), an integrated professional services and design-build firm, has announced a significant development in its strategic relationship with XS Financial Inc (CSE: XSF) (OTCQB: XSHLF), a prominent equipment finance company serving the US cannabis industry. The two companies have collaboratively agreed on an investment agreement that exemplifies their commitment to mutual growth and underlines their dedication to robust financial management.
The cornerstone of this announcement is the retirement of urban-gro’s convertible note held by XS Financial. This note, valued at $2.5 million, has been retired for $2.3 million, showcasing a 10% discount to the current book value of the investment. In addition to this cash payment, urban-gro has accrued $0.3 million in interest since its initial investment in the last quarter of 2021. This development demonstrates XS Financial’s commitment to fulfilling its financial obligations and underscores urban-gro’s strategic decision-making in managing its capital resources.
Bradley Nattrass, Chairman and CEO of urban-gro, highlighted the significance of this investment agreement. He noted, “We believe XS Financial is a great company working to support the cannabis industry by helping clients finance their capital expenditures, and we look forward to continuing our strategic relationship.” This statement elucidates the symbiotic nature of the partnership, emphasizing the shared goal of nurturing the cannabis sector through financial support and expert services.
The strategic collaboration between urban-gro and XS Financial transcends the realms of financial transactions. It reflects the confluence of shared values and business strategies. urban-gro’s core focus on providing value-added architectural, engineering, and construction management solutions aligns seamlessly with XS Financial’s mission to offer financial support for capital expenditures in the cannabis industry. This convergence of expertise positions both companies to be prominent players in the evolving landscape of Controlled Environment Agriculture.
Furthermore, urban-gro’s emphasis on sound capital management and maintaining a healthy balance sheet is evident in negotiating the convertible note’s retirement. Retaining the note at a discount to its book value showcases a thoughtful approach to optimizing financial returns while maintaining liquidity. This strategy ensures the efficient use of capital and supports the company’s ability to continue investing in its multi-sector business development plan.
The investment agreement between urban-gro and XS Financial marks a significant milestone in the evolution of both companies. It exemplifies their dedication to supporting the growth of the Controlled Environment Agriculture and Cannabis industries while simultaneously emphasizing sound financial management practices. As these sectors evolve, partnerships like this will undoubtedly play a pivotal role in shaping their trajectory, fostering innovation, and propelling industry advancements.
Image provided by urban-gro
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