SCHEDULE 13D/A: Jushi Holdings CEO James Cacioppo and Affiliates Boost Stake to 19.9% Amidst New Financing

James A. Cacioppo, CEO of Jushi Holdings Inc., and his affiliated entities have significantly increased their beneficial ownership in the company to 19.9% through a series of option and warrant acquisitions, alongside a new debt financing arrangement.

Summary

• James A. Cacioppo, CEO and Director of Jushi Holdings Inc., along with his affiliated entities, collectively beneficially own 46,396,331 Subordinate Voting Shares, representing 19.9% of the class.
• This beneficial ownership includes shares directly held, as well as those acquirable through the exercise of stock options (9,755,232 shares) and warrants (24,722,634 shares) within 60 days from February 25, 2025.
• The percentage of ownership is calculated based on 196,696,597 Subordinate Voting Shares outstanding as of November 1, 2024, plus shares acquirable within 60 days.
• Serpentine Capital Management III, LLC, an affiliate of Mr. Cacioppo, acquired US$3,719,000 principal amount of the Issuer's 12% Second Lien Notes due 2026 and detached warrants to purchase up to 6,198,333 Subordinate Voting Shares on February 25, 2025.
• The exercise price for these new warrants will be a 50% premium to the 20-day volume weighted average price (VWAP) following the 2024 10-K filing, with a floor of US$0.45 and a ceiling of US$0.50 per share.
• The Reporting Persons acquired these securities for investment purposes and may further adjust their holdings, engage in discussions with management, or propose changes to the Issuer's operations, governance, or capital structure.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The significant increase in beneficial ownership by the CEO and his affiliates, coupled with their direct investment in the company's debt, indicates strong insider confidence and financial support, which can be viewed favorably by investors.

Positives

• Increased beneficial ownership by CEO James A. Cacioppo and his affiliates, signaling strong insider confidence in Jushi Holdings Inc.'s future.
• The acquisition of US$3,719,000 in 12% Second Lien Notes by Serpentine Capital Management III, LLC provides additional financing to the Issuer.

Risks

• Certain warrants held by Serpentine Capital Management III LLC are subject to a beneficial ownership limit of 19.99% of the outstanding Subordinate Voting Shares.
• The actual number of warrants to be received by Serpentine Capital Management III LLC and their precise exercise price are subject to future determination based on the Issuer's 2024 Annual Report on Form 10-K filing and market conditions.

Future Outlook

The Reporting Persons intend to continue holding their investment for investment purposes, with the flexibility to further purchase or dispose of shares, options, and warrants. They will routinely monitor the Issuer's operations, business strategy, and market conditions, and may engage in discussions with management or other stakeholders to propose changes in the Issuer's operations, governance, or capital structure.

Management Comments

• "The Reporting Persons acquired the Subordinate Voting Shares, Options and Warrants for investment purposes, and such purchases were made in the Reporting Persons' ordinary course of business."
• "In pursuing such investment purposes, the Reporting Persons may further purchase, hold, vote, trade, dispose or otherwise deal in the Subordinate Voting Shares, Options and Warrants, as they deem advisable to benefit from changes in market prices, changes in the Issuer's operations, business strategy or prospects, or from a sale or merger of the Issuer."
• "The Reporting Persons reserve the right to formulate other plans and/or make other proposals and take such actions with respect to their investment in the Issuer, including any or all of the actions set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D, or acquire additional Subordinate Voting Shares, Options and Warrants or dispose of all Subordinate Voting Shares, Options and Warrants beneficially owned by them."

Industry Context

This Schedule 13D filing primarily focuses on changes in beneficial ownership and related financing activities of Jushi Holdings Inc. by its CEO and affiliated entities. It does not provide broader industry trends or competitive analysis.

Stakeholder Impact

• Shareholders: The increased beneficial ownership by the CEO and his affiliates may be perceived as a positive signal of long-term commitment and confidence in the company's prospects.
• Creditors: The purchase of Second Lien Notes by an affiliate provides additional capital to the company, potentially strengthening its financial position.

Next Steps

• The actual number of warrants to be received by Serpentine Capital Management III LLC will be determined on the second business day following the filing of the Issuer's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
• The exercise price of the new warrants will be determined on the second business day following the filing of the Issuer's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, based on the volume weighted average price (VWAP) of the shares, subject to a floor of US$0.45 and a ceiling of US$0.50.
• The Reporting Persons may continue to monitor the Issuer's performance and market conditions, potentially leading to further purchases, dispositions, or proposals regarding the company's strategy or governance.

Key Dates

Keywords

Jushi Holdings Inc., Schedule 13D, Beneficial Ownership, James Cacioppo, Subordinate Voting Shares, Stock Options, Warrants, Second Lien Notes, Insider Ownership, Corporate Finance