Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Nov. 30, 2019 | Jan. 06, 2020 | |
Document and Entity Information: | ||
Entity Registrant Name | KushCo Holdings, Inc. | |
Entity Central Index Key | 0001604627 | |
Trading Symbol | kshb | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 107,934,311 | |
Document Type | 10-Q | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Document Period End Date | Nov. 30, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Current assets: | ||
Cash | $ 14,719 | $ 3,944 |
Accounts receivable, net | 26,788 | 25,972 |
Inventory | 40,044 | 43,768 |
Prepaid expenses and other current assets | 17,990 | 12,209 |
Total current assets | 99,541 | 85,893 |
Goodwill | 52,267 | 52,267 |
Intangible assets, net | 2,866 | 3,103 |
Property and equipment, net | 12,350 | 11,054 |
Other assets | 11,549 | 6,917 |
Total Assets | 178,573 | 159,234 |
Current liabilities: | ||
Accounts payable | 10,087 | 10,907 |
Accrued expenses and other current liabilities | 15,657 | 9,460 |
Line of credit | 5,722 | 12,261 |
Total current liabilities | 31,466 | 32,628 |
Long-term liabilities: | ||
Notes payable | 19,926 | 18,975 |
Warrant liability | 2,240 | 5,444 |
Other non-current liabilities | 5,525 | 833 |
Total long-term liabilities | 27,691 | 25,252 |
Total liabilities | 59,157 | 57,880 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.001 par value, 265,000 shares authorized, 107,361 and 90,041 shares issued and outstanding, respectively | 107 | 90 |
Additional paid-in capital | 194,809 | 164,258 |
Accumulated deficit | (75,500) | (62,994) |
Total stockholders' equity | 119,416 | 101,354 |
Total liabilities and stockholders' equity | $ 178,573 | $ 159,234 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Nov. 30, 2019 | Aug. 31, 2019 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 265,000 | 265,000 |
Common stock, shares issued | 107,361 | 90,041 |
Common stock, shares outstanding | 107,361 | 90,041 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Consolidated Statements of Operations | ||
Net revenue | $ 34,963 | $ 25,320 |
Cost of goods sold | 27,692 | 22,091 |
Gross profit | 7,271 | 3,229 |
Operating expenses: | ||
Selling, general and administrative | 21,075 | 12,547 |
Gain on disposition of assets | 21 | (1,254) |
Change in fair value of contingent consideration | 394 | |
Total operating expenses | 21,075 | 11,687 |
Loss from operations | (13,804) | (8,458) |
Other income (expense): | ||
Change in fair value of warrant liability | 3,204 | (216) |
Change in fair value of equity investment | (395) | 536 |
Interest expense | (1,488) | (487) |
Other income (expense), net | (23) | 46 |
Total other income (expense), net | 1,298 | (121) |
Loss before income taxes | (12,506) | (8,579) |
Net loss | $ (12,506) | $ (8,579) |
Net loss per share: | ||
Basic and diluted net loss per share (in dollars per share) | $ (0.12) | $ (0.11) |
Weighted-average common shares outstanding | ||
Basic and diluted weighted average number of common shares outstanding (in shares) | 101,638 | 78,471 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total |
Balance at Aug. 31, 2018 | $ 78 | $ 104,918 | $ (23,358) | $ 81,638 |
Balance (in shares) at Aug. 31, 2018 | 78,273 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | $ 1 | 2,338 | 2,339 | |
Stock-based compensation (in shares) | 286 | |||
Net loss | (8,579) | (8,579) | ||
Balance at Nov. 30, 2018 | $ 79 | 107,256 | (31,937) | 75,398 |
Balance (in shares) at Nov. 30, 2018 | 78,559 | |||
Balance at Aug. 31, 2019 | $ 90 | 164,258 | (62,994) | 101,354 |
Balance (in shares) at Aug. 31, 2019 | 90,041 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | 3,189 | 3,189 | ||
Stock-based compensation (in shares) | 99 | |||
Stock sold to investors | $ 17 | 27,362 | 27,379 | |
Stock sold to investors (in shares) | 17,198 | |||
Stock issued for acquisitions (In shares) | 23 | |||
Net loss | (12,506) | (12,506) | ||
Balance at Nov. 30, 2019 | $ 107 | $ 194,809 | $ (75,500) | $ 119,416 |
Balance (in shares) at Nov. 30, 2019 | 107,361 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (12,506) | $ (8,579) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 962 | 508 |
Amortization of debt discount | 1,181 | |
Provision for bad debt | 362 | 591 |
Provision for sales returns | 45 | |
Provision for inventory reserve | 604 | 457 |
Loss (gain) on disposal of assets | 21 | (1,254) |
Change in fair value of equity investment | 395 | (536) |
Stock-based compensation | 4,662 | 1,808 |
Change in fair value of warrant liability | (3,204) | 216 |
Change in fair value of contingent consideration | 394 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,223) | (2,329) |
Inventory | 3,120 | (6,131) |
Prepaid expenses and other current assets | (5,858) | (6,663) |
Other non-current assets | 439 | (153) |
Accounts payable | (922) | 4,521 |
Accrued expenses and other current liabilities | 4,306 | 1,667 |
Other non-current liabilities | (482) | |
Net cash used in operating activities | (8,098) | (15,483) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property, equipment, and intangibles | (1,940) | (681) |
Security deposits | (26) | |
Net cash used in investing activities | (1,940) | (707) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayment of capital leases | (27) | (18) |
Proceeds from stock option exercises | 41 | |
Proceeds from issuance of common stock | 27,379 | |
Proceeds from line of credit | 25,112 | 30,326 |
Repayments on line of credit | (31,651) | (24,516) |
Payments for contingent consideration | (82) | |
Net cash provided by financing activities | 20,813 | 5,751 |
NET INCREASE (DECREASE) IN CASH | 10,775 | (10,439) |
CASH AT BEGINNING OF YEAR | 3,944 | 3,944 |
CASH AT END OF YEAR | 14,719 | 3,028 |
CASH PAID FOR: | ||
Interest | 351 | 155 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Capital leases | 240 | |
Services prepaid for in common stock | 171 | 704 |
Accrued and unpaid amounts for purchase of property & equipment | $ 103 | 205 |
Fair value of shares received from sale of assets | $ 1,791 |
NATURE OF BUSINESS AND SIGNIFIC
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Nov. 30, 2019 | |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Nature of Business KushCo Holdings, Inc. (“KushCo” or the “Company”) was incorporated in the state of Nevada on February 26, 2014. The Company specializes in marketing and selling customized packaging products, vaporizers, hydrocarbon gases, solvents, accessories and branding solutions to customers operating in the regulated medical and recreational cannabis industries. The Company provides custom branding on packaging products, and its testing standards meet the requirements set by the Consumer Product Safety Commission. The Company’s packaging products primarily consist of bottles, bags, tubes and containers. The Company maintains relationships with a broad range of manufacturers and also has sophisticated in-house labeling and customization capabilities. The Company sells a wide selection of vaporizer cartridges with a variety of core materials and heating technologies, as well as a wide selection of batteries to match the cartridges. The Company provides ultra-pure hydrocarbon gases, including isobutene, n-butane, propane, ethanol, pre-mixes, custom blends and other solvents, which are essential in the extraction process. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the activity of the Company and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information pursuant to Securities and Exchange Commission (“SEC”) rules and regulations. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included in the condensed consolidated financial statements for the interim periods presented herein, but are not necessarily indicative of operating results to be achieved for full fiscal years or other interim periods. The condensed consolidated balance sheet as of August 31, 2019 was derived from the audited financial statements as of that date, but does not include all disclosures as required by GAAP. These condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the fiscal year ended August 31, 2019 and notes thereto included in the Company’s annual report on Form 10-K for the year then ended and filed with the SEC on November 12, 2019. References to amounts in these notes to condensed consolidated financial statements are in thousands, except per share amounts, unless otherwise specified. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Significant estimates relied upon in preparing these condensed consolidated financial statements include revenue recognition, accounts receivable reserves, inventory and related reserves, expected future cash flows used to evaluate the recoverability of long-lived assets, estimated fair values of long-lived assets used to record impairment charges related to intangible assets and goodwill, amortization periods, accrued expenses, stock-based compensation, and recoverability of the Company’s net deferred tax assets and any related valuation allowance. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if past experience or other assumptions do not turn out to be substantially accurate. The Company is subject to a number of risks similar to those of other companies of similar size and having a focus of serving the cannabis industry, including, the development stage of certain products, competition, limited number of suppliers, integration of acquisitions, substantial indebtedness, government regulations, protection of proprietary rights, and dependence on key individuals. Accounts Receivable Trade accounts receivable are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis, thus, trade receivables do not bear interest. Trade accounts receivables are periodically evaluated for collectability based on past credit history and their current financial condition. The Company’s allowance for doubtful accounts was $1,577 and $1,058 as of November 30, 2019 and August 31, 2019, respectively. The Company’s sales return reserve was $521 and $477 as of November 30, 2019 and August 31, 2019, respectively, and is included in “Accounts receivable, net” on the Company’s condensed consolidated balance sheet. Inventory Inventories are stated at the lower of cost or net realizable value using the average cost method. The Company’s inventory consists of finished goods of $40,044 and $43,768 as of November 30, 2019 and August 31, 2019, respectively. The Company also makes prepayments against the future delivery of inventory classified as prepaid inventory. The Company’s prepaid inventory was $10,785 and $7,134 as of November 30, 2019 and August 31, 2019, respectively. Net Loss Per Share The Company computes earnings per share under Accounting Standards Codification (“ASC”) Topic 260, Earnings per Share (“ASC 260”). Basic net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the potentially dilutive securities outstanding during the period. Stock options are potentially dilutive securities; and the number of dilutive options is computed using the treasury stock method. For the quarters ended November 30, 2019 and 2018, basic and diluted weighted average shares are the same, as the Company generated a net loss for the period. The computation for the quarter ended November 30, 2019 does not include 14,407 options and 16,737 warrants as their inclusion would have an anti-dilutive effect on net loss per share. The computation of diluted net loss per share for the quarter ended November 30, 2018 does not include 10,838 options and 3,750 warrants as their inclusion would have an anti-dilutive effect on net loss per share. Revenue Recognition The Company markets and sells packaging products, vaporizers, hydrocarbon gases, solvents, accessories and branding solutions to customers operating in the regulated medical and recreational cannabis industries. In accordance with ASC 606, Revenue from Contracts with Customers , the Company applies the following steps to recognize revenue for the sale of products that reflects the consideration to which the Company expects to be entitled to receive in exchange for the promised goods: · Identify the contract with a customer. · Identify the performance obligations in the contract. · Determine the transaction price. · Allocate the transaction price to the performance obligations in the contract. · Recognize revenue when the Company satisfies a performance obligation. Advertising The Company conducts advertising for the promotion of its products and services. In accordance with ASC subtopic 720-35-25 (“ASC 720”), advertising costs are charged to expense when incurred. Advertising costs were $81 and $493 for the three months ended November 30, 2019 and 2018, respectively. Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Changes to Disclosure Requirements for Fair Value Measurements , which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The ASU removes, modifies, and adds certain disclosure requirements and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is evaluating the potential impact of adoption of this standard on its consolidated financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the condensed consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
CONCENTRATIONS OF RISK
CONCENTRATIONS OF RISK | 3 Months Ended |
Nov. 30, 2019 | |
CONCENTRATIONS OF RISK | |
CONCENTRATIONS OF RISK | NOTE 2 - CONCENTRATIONS OF RISK Supplier Concentrations The Company purchases inventory from various suppliers and manufacturers. For the three months ended November 30, 2019, one vendor accounted for approximately 32% of total inventory purchases. For the three months ended November 30, 2018, one vendor accounted for approximately 56% of total inventory purchases. Customer Concentrations During the three months ended November 30, 2019 and 2018, each quarter had one customer which represented approximately 10% and 15%, respectively, of the Company’s revenues. As of November 30, 2019, there were two customers in the aggregate that represented approximately 35% of accounts receivable. As of November 30, 2018, there was one customer that represented 16% of accounts receivable. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 3 Months Ended |
Nov. 30, 2019 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | NOTE 3 – RELATED-PARTY TRANSACTIONS The Company sells certain products and supplies to two related parties. Sales recognized during the three months ended November 30, 2019 and 2018 from the related parties totaled $866 and $10, respectively. Total accounts receivable from related parties was $1,200 and $465 as of November 30, 2019 and August 31, 2019, respectively. Further, the Company rents certain warehouse equipment from a related party. During the three months ended November 30, 2019 and 2018, total payments of $158 and $5, respectively, were made to the related party. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Nov. 30, 2019 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 4 - PROPERTY AND EQUIPMENT The major classes of fixed assets consist of the following: November 30, August 31, 2019 2019 Machinery and equipment $ 5,814 $ 4,430 Vehicles 603 603 Office Equipment 3,753 3,232 Leasehold improvements 3,301 3,296 Construction in progress 1,971 1,930 15,442 13,491 Accumulated Depreciation (3,092) (2,437) $ 12,350 $ 11,054 Depreciation expense was $725 and $265 for the three months ended November 30, 2019 and 2018, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Nov. 30, 2019 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 5 - INTANGIBLE ASSETS Intangible assets consist of the following: Weighted Average As of November 30, 2019 As of August 31, 2019 Estimated Gross Gross Useful Carrying Accumulated Net Carrying Accumulated Net Description Life Value Amortization Amount Value Amortization Amount Trade name 6 years 2,600 (1,120) 1,480 2,600 (1,011) 1,589 Non-compete agreement 4 years 2,370 (984) 1,386 2,370 (856) 1,514 $ 4,970 $ (2,104) $ 2,866 $ 4,970 $ (1,867) $ 3,103 Amortization expense was $237 and $243 for the three months ended November 30, 2019 and 2018 , respectively. The following table summarizes the remaining estimated amortization of definite-lived intangible assets as of November 30, 2019: For the year ended August 31, 2020 (remaining nine months) $ 710 2021 881 2022 747 2023 528 $ 2,866 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Nov. 30, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 6 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: November 30, August 31, 2019 2019 Customer deposits $ 5,344 $ 2,992 Accrued compensation 3,775 3,485 Sales tax payable 1,062 1,047 Lease liability 1,709 — Other accrued expenses 3,767 1,936 $ 15,657 $ 9,460 |
LEASES
LEASES | 3 Months Ended |
Nov. 30, 2019 | |
LEASES | |
LEASES | NOTE 7 – LEASES The Company adopted ASC 842 “Leases” (“ASC 842”) effective September 1, 2019 utilizing the modified retrospective approach for adoption for all leases that existed at or are commenced after the date of initial application with an option to use certain practical expedients. The package of practical expedients allowed the Company to not reassess: (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases. The Company also used (i) hindsight when evaluating contractual lease options, (ii) the practical expedient that allows lessees to treat lease and non-lease components of leases as a single lease component, (iii) the portfolio approach which allows similar leased assets to be grouped and accounted for together, and (iv) the short-term lease for leases with a term of 12 months or less. In addition, the Company implemented additional internal controls to evaluate future transactions in accordance with ASC 842. The adoption of ASC 842 had a material impact on the consolidated balance sheet due to the recognition of Right of Use (“ROU”) assets and lease liabilities. The adoption of this ASC did not have a material impact on the consolidated statement of operations or the consolidated statement of cash flows. The Company did not recognize a material cumulative effect adjustment to the opening balance sheet retained earnings on September 1, 2019. Because the modified retrospective approach was elected, the ASU was not applied to periods prior to adoption and did not have an impact on previously reported results. At adoption, the Company recognized operating lease ROU assets and lease liabilities that reflect the present value of the future payments. As the rate implicit in the lease could not be determined for any of the Company’s leases, an estimated incremental borrowing rate of 10.7%, which reflects the interest rate the Company would pay to borrow funds over a similar term and in a similar economic environment, was used to determine the present value of lease payments. Based on the impact of ASC 842 on the lease population, the Company recorded $7.6 million in lease liabilities and $6.8 million for ROU assets based upon the lease liabilities adjusted for deferred rent. ROU assets are included in “Other assets” and lease liabilities are included in “Accrued expenses and other current liabilities” and “Other non-current liabilities” on the Company’s condensed consolidated balance sheet. The Company determines if an arrangement is a lease at inception. The Company leases its facilities and certain office equipment under operating leases which expire on various dates through 2026. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. When readily determinable, the Company uses the implicit rate in determining the present value of lease payments. The ROU asset also includes any fixed lease payments, including in-substance fixed lease payments and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease term is determined at lease commencement and includes any non-cancellable period for which the Company has the right to use the underlying asset, together with any options to extend that the Company is reasonably certain to exercise. Lease Liabilities Lease liabilities as of November 30, 2019 consist of the following: Current portion of lease liabilities $ 1,709 Long term lease liabilities, net of current portion 5,525 Total lease liabilities $ 7,234 Aggregate lease maturities as of November 30, 2019 are as follows: Year ended August 31, 2020 (remaining nine months) $ 1,775 2021 2,352 2022 2,139 2023 1,509 2024 616 Thereafter 500 Total minimum lease payments 8,891 Less imputed interest (1,657) Total lease liabilities $ 7,234 Rent expense was $850 for the three months ended November 30, 2019 with a weighted average remaining lease term of 4.1 years and a weighted average discount rate of 10.7%. Rent expense for the three months ended November 30, 2018 was $752 under ASC 840, the predecessor to ASC 842. |
DEBT
DEBT | 3 Months Ended |
Nov. 30, 2019 | |
DEBT | |
DEBT | NOTE 8 – DEBT Monroe Revolving Credit Facility On August 21, 2019, the Company and its subsidiaries (collectively, the “Borrowers”) entered into a secured asset based Revolving Credit Facility (“Monroe Revolving Credit Facility”), with an aggregate amount not to exceed $35.0 million outstanding at any time, with Monroe Capital Management Advisors, LLC (“Monroe”), as collateral agent and administrative agent, and the various lenders party thereto. The Monroe Revolving Credit Facility also includes an accordion feature that permits the Company to increase the available revolving commitments under the Monroe Revolving Credit Facility by up to an additional $15.0 million, subject to satisfaction of certain conditions. The Monroe Revolving Credit Facility has a 5-year term which matures on August 21, 2024. The Monroe Revolving Credit Facility contains customary representations and warranties, affirmative and negative covenants, including a financial covenant requiring certain minimum availability, and events of default. As of November 30, 2019, the balance outstanding on the facility was $5,722 and the interest rate was 10.7%. The Company incurred closing costs associated with the Monroe Revolving Credit Facility in the amount of $2,602, which were deferred and amortized over the 5-year term of the Monroe Revolving Credit Facility on a straight-line basis. As of November 30, 2019, unamortized debt issuance costs of $2,501 is included in “Other assets.” Interest expense and amortization of debt discount, associated with the Monroe Revolving Credit Facility during the three months ended November 30, 2019 amounted to $296 and $154, respectively. Monroe Warrants On August 21, 2019, the Company entered into a Monroe Subscription Agreement, pursuant to which the Company issued to Monroe a Warrant to purchase up to 500 shares of common stock at $0.001 par value per share (the “Monroe Warrant”) at an exercise price of $4.25 per share. The Monroe Warrants have a 5-year term and as such will expire on August 21, 2024. Amortization expense for the three months ended November 30, 2019 was $49. The estimated fair value of the Monroe Warrant was $934 as of November 30, 2019. Long-term Debt On April 29, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Investor”), pursuant to which the Company issued and sold a senior note (the “Original Note”) in a private placement offering in the aggregate principal amount of $21.3 million with an original issue discount of $1.3 million, and received net proceeds of $20.0 million. The Original Note was a senior unsecured obligation, and unless earlier redeemed, was scheduled to mature on October 30, 2020. The Original Note did not bear interest, except upon the occurrence of an event of default. On August 21, 2019, the Company entered into an exchange agreement (the “Exchange Agreement”) with the Investor in order to amend and waive certain provisions of the Purchase Agreement and the Original Note and exchange the Original Note for (i) a new senior note (the “New Senior Note”) for the same aggregate principal amount as the Original Note and (ii) a warrant to purchase up to 650 shares of our common stock at an exercise price of $4.25. The warrant has an expiration date of August 21, 2024 and has not been exercised as of November 30, 2019. As of August 21, 2019, the warrants were reclassified from a derivative liability to equity with a corresponding adjustment to additional paid-in capital. Similar to the terms of the Original Note, the New Senior Note matures on October 30, 2020, at which time the Company must pay the Investor an amount in cash representing 120% of all outstanding principal, less original issue discount, plus any accrued and unpaid interest and accrued and unpaid late charges. Similar to the terms of the Original Note, the New Senior Note will not bear interest except upon the occurrence of an event of default. On November 8, 2019, the Company entered into a Second Exchange Agreement (“Second Exchange Agreement”) with the Investor, pursuant to which the Company amended the New Senior Note (the “Amended Senior Note”). Pursuant to the terms of the Amended Senior Note, the maturity date of the Amended Senior Note was extended to April 29, 2021 and the aggregate principal amount of the Amended Senior Note was increased to approximately $24.0 million and the original issue discount was increased to $1.5 million. Upon maturity, the Company must pay the Investor an amount in cash representing 120% of all outstanding principal, less original issue discount, plus any accrued and unpaid interest and accrued and unpaid late charges. Similar to the terms of the Original Note, the Amended Senior Note will not bear interest, except upon the occurrence of an event of default. |
WARRANT LIABILITY
WARRANT LIABILITY | 3 Months Ended |
Nov. 30, 2019 | |
WARRANT LIABILITY | |
WARRANT LIABILITY | NOTE 9 - WARRANT LIABILITY In June 2018, the Company issued warrants to purchase 3,750 shares of its common stock to investors in a registered direct offering. The warrants have a term of five years from the date of issuance. Pursuant to ASC Topic 815, the initial fair value of the warrants of $15,350 was recorded as a warrant liability on the issuance date. The estimated fair values of the warrants were computed at issuance using a Black-Scholes option pricing model. The estimated fair value of the outstanding warrant liabilities was $2,240 and $5,444 as of November 30, 2019 and August 31, 2019, respectively. Increases or decreases in fair value of the warrant liability are included as a component of "Other expense" in the accompanying condensed consolidated statements of operations for the respective period. The changes to the liability for warrants resulted in a decrease of $3,204 in warrant liability and a corresponding gain for the three months ended November 30, 2019. For the three months ended November 30, 2018, the changes to the liability for warrants resulted in an increase of $216 in warrant liability and a corresponding loss. The estimated fair value of the warrants was computed as of November 30, 2019 using the Black Scholes model with the following assumptions: stock price of $1.77, volatility of 83.1%, risk-free rate of 1.62%, annual dividend yield of 0% and expected life of 3.5 years. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Nov. 30, 2019 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 10 - FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value measurements are performed in accordance with the guidance provided by ASC Topic 820, “Fair Value Measurements and Disclosures " ("ASC 820"). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or parameters are not available, valuation models are applied. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities recorded at fair value in the financial statements are categorized based upon the hierarchy of levels of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 - Unobservable inputs that are supportable by little or no market activity and that are significant to the fair value of the asset or liability. The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, equity investments, accounts receivable, accounts payable and accrued liabilities and capital lease obligations approximate their fair values based on their short-term nature. The carrying amount of the Company’s long-term notes payable approximates its fair value based on interest rates available to the Company for similar debt instruments and similar remaining maturities. The Company accounts for its investment in Smoke Cartel , Inc. ("Smoke Cartel") at fair value. On September 21, 2018, Smoke Cartel and the Company entered into an agreement to sell the RUB web domain and inventory related to this product line and in exchange, received 1,410 shares of Smoke Cartel common stock. The fair value of the Company's investment as of August 31, 2019 and November 30, 2019 was based upon the closing stock price of Smoke Cartel. The investment was classified as a Level 2 financial instrument. In connection with the Company’s registered direct offering in June 2018, the Company issued warrants to purchase shares of its common stock, which are accounted for as a warrant liability (see Note 9 above.) The estimated fair value of the derivative is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument. The estimated fair value of the contingent consideration related to the Company’s business combinations is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument. The following table details the fair value measurement within the fair value hierarchy of the Company’s financial instruments, which includes the Level 2 assets and the Level 3 liabilities: Fair Value at November 30, 2019 Total Level 1 Level 2 Level 3 Assets: Equity investment $ 197 $ — $ 197 $ — Liabilities: Warrant liability $ 2,240 $ — $ — $ 2,240 Fair Value at August 31, 2019 Total Level 1 Level 2 Level 3 Assets: Equity investment $ 592 $ — $ 592 $ — Liabilities: Warrant liability $ 5,444 $ — $ — $ 5,444 The following table reflects the activity for the Company’s investment in Smoke Cartel measured at fair value using Level 2 inputs: Investment in Smoke Cartel As of August 31, 2019 $ 592 Adjustments to estimated fair value (395) As of November 30, 2019 $ 197 Investment in Smoke Cartel As of August 31, 2018 $ — Acquisition of equity investment 1,791 Adjustments to estimated fair value 536 As of November 30, 2018 2,327 The following table reflects the activity for the Company’s warrant derivative liability for the June 2018 registered offering measured at fair value using Level 3 inputs: Warrant Liability Balance at August 31, 2019 $ 5,444 Adjustments to estimated fair value (3,204) Balance at November 30, 2019 $ 2,240 Warrant Liability Balance at August 31, 2018 $ 14,430 Adjustments to estimated fair value 216 Balance at November 30, 2018 $ 14,646 The following table reflects the activity for the Company’s contingent acquisition liabilities measured at fair value using Level 3 inputs: Contingent Consideration Payable Balance at August 31, 2018 $ 5,488 Adjustments to estimated fair value 394 Balance at November 30, 2018 $ 5,882 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Nov. 30, 2019 | |
STOCKHOLDERS' EQUITY. | |
STOCKHOLDERS' EQUITY | NOTE 11 - STOCKHOLDERS’ EQUITY Preferred Stock The Company's authorized preferred stock is 10,000 shares with a par value of $0.001. As of November 30, 2019 and August 31, 2019, there were no shares of preferred stock issued or outstanding. Common Stock The Company's authorized common stock is 265,000 shares with a par value of $0.001. As of November 30, 2019 and August 31, 2019, there were 107,361 and 90,041 shares issued and outstanding, respectively. On September 26, 2019, the Company entered into purchase agreements with accredited investors pursuant to which the Company issued and sold an aggregate of 17,198 units (“Units”), with each unit consisting of one share of its common stock and a warrant to purchase half a share of common stock in a registered direct offering (the “September 2019 Offering”). The purchase price for a Unit was $1.75. The closing of the September 2019 Offering occurred on September 30, 2019 and resulted in aggregate gross proceeds of approximately $30.1 million. The aggregate net proceeds from the September 2019 Offering, after deducting the placement agent fees and other offering expenses, was approximately $27.4 million. Subject to certain ownership limitations, the warrants were immediately exercisable at an exercise price equal to $2.25 per share of Common Stock. The warrants are exercisable for five years from the date of issuance. Share-based Compensation The Company recorded total stock-based compensation expense of $4,662 and $1,808 for the three months ended November 30, 2019 and 2018, respectively, in connection with the issuance of shares of common stock and options to purchase common stock. Stock-based compensation expense is included in selling, general and administrative expense in the Condensed Consolidated Statements of Operations. On September 1, 2019, the Company adopted Accounting Standards Update 2018-07 which addresses several aspects of the accounting for nonemployee share-based payment transactions and expands the scope of ASC 718, Compensation , to include share-based payment transactions for acquiring goods and services from nonemployees. Under the simplified standard, nonemployee options will be valued once at the date of grant. At adoption, all awards without established measurement dates were revalued one final time and did not have a material impact on the condensed consolidated financial statements. Stock Incentive Plan The Company’s 2016 Stock Incentive Plan (the “Plan”) was adopted on February 9, 2016. The Plan authorizes the issuance of up to 18,000 shares of common stock in the form of stock-based awards to the Company’s employees and directors. The Company believes that such awards better align the interests of its employees with those of its shareholders. Option awards are generally granted with an exercise price equal to the market price of the Company's common stock at the date of grant and have 10-year contractual terms. The option awards generally vest over three years subject to the recipient’s continuous service. The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of its stock price over the expected option term, expected risk-free interest rate over the expected option term, and expected dividend yield rate over the expected option term. The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors which are subject to ASC 718. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation on a straight-line basis over the requisite service period for each award. The following table summarizes the assumptions the Company utilized to record compensation expense for stock options granted during the three months ended November 30, 2019 and 2018: Three Months Ended November 30, 2019 2018 Expected term in years 5.3 – 5.9 3.0 Expected volatility 64 % – 85 % 82 % – 87 % Risk-free interest rate 1.4% – 1.7 % 2.7 % – 3.0 % Expected dividend yield 0.0 % 0.0 % The expected term is based on management judgement and reflects expected exercise patterns. The expected volatility is based on management's analysis of historical volatility. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected term of the related option at the time of the grant. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased. The following table summarizes the stock option activity during the three months ended November 30, 2019: Weighted Weighted Average Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Price Term (years) Value Balance Outstanding, August 31, 2019 14,761 $ 4.89 9.0 $ 3,192 Granted 1,655 2.40 Exercised (9) 2.06 $ 14 Forfeited (2,000) 5.06 Balance Outstanding, November 30, 2019 14,407 $ 4.58 8.8 $ 269 Vested and expected to vest at November 30, 2019 12,510 $ 4.56 8.8 $ 260 Exercisable, November 30, 2019 5,782 $ 4.36 8.3 $ 228 Stock compensation expense related to stock options was $2,933 and $1,469 for the three months ended November 30, 2019 and 2018, respectively. The weighted-average grant-date fair value of options granted during the three months ended November 30, 2019 and 2018, was $1.41 and $3.10, respectively. As of November 30, 2019, there was $20,393 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. The expense is expected to be recognized over a weighted-average period of 2.1 years. Restricted Stock During the three months ended November 30, 2019, the Company awarded 90 shares of restricted common stock to consultants in exchange for $171 of services rendered. During the three months ended November 30, 2018, the Company issued 123 restricted shares of common stock to consultants in exchange for $124 of services rendered and $704 of prepaid services, for a total of $828. The $704 of prepaid services was included in prepaid expenses on the condensed consolidated balance sheet as of November 30, 2018. Stock-based compensation expense related to restricted stock awards was $1,729 and $339, respectively, for the three months ended November 30, 2019 and 2018. As of November 30, 2019, $2,077 of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted average period of 1.6 years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Nov. 30, 2019 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 - COMMITMENTS AND CONTINGENCIES Other Commitments In the ordinary course of business, the Company may enter into contractual purchase obligations and other agreements that are legally binding and specify certain minimum payment terms. The Company had no such agreements as of November 30, 2019. Litigation The Company may be subject to legal proceedings and claims which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity. During fiscal 2019, lawsuits were filed in California federal and state court by various purported shareholders against, the Company, each of the current members of the Company’s Board of Directors, and certain of our current and former officers, alleging, among other things, federal securities law violations and/or related breaches of fiduciary duties in connection with the Company’s April 2019 restatement of certain prior period financial statements. In general, the lawsuits assert the same or similar allegations, including that defendants artificially inflated the Company’s securities prices by knowingly making materially false and misleading statements and omissions to the investing public about the Company’s financial statements, business, operations, management, and internal controls. May v. KushCo Holdings, Inc., et al. Filed April 30, 2019. Case No. 8:19-cv-00798-JLS-KES, U.S. District Court for the Central District of California. This putative shareholder class action against the Company and certain of its current and former officers alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, and seeks unspecified compensatory damages and other relief on behalf of a class of purchasers of the Company’s securities between July 13, 2017 and April 9, 2019, inclusive. In July 2019, purported Company shareholders filed motions for appointment of lead counsel and lead plaintiffs. In September 2019, the Court appointed co-lead plaintiffs and co-lead counsel for the plaintiffs. The lead plaintiffs’ amended complaint was filed in November 2019, and the defendants’ responses to the complaint are currently due in January 2020. The Company intends to vigorously defend itself against these claims. Salsberg v. Kovacevich, et al . Filed May 24, 2019. Case No. 8:19-cv-00998-JLS-KES, U.S. District Court for the Central District of California and Neysmith v. Baum, et al . Filed May 31, 2019. Case No. 8:19-cv-01070-JLS-KES, U.S. District Court for the Central District of California. This purported shareholder derivative action against certain current and former directors and officers alleges, among other things, breach of fiduciary duty, waste of corporate assets, and unjust enrichment. The Company is named as a nominal defendant and the plaintiff seeks, among other things, corporate governance reforms, and disgorgement of profits, benefits, and compensation obtained by the defendants from the alleged conduct, to be paid to the Company. In September 2019, the Court consolidated these cases. The parties are expected to stipulate to a date by which the defendants must respond to the complaint. No trial date has been set. Savage vs. Kovacevich, et al . Filed June 14, 2019. Case No. 30-2019-01077191-CU-MC-NJC, Superior Court of California, County of Orange. This purported shareholder derivative action against certain current and former directors and officers alleges, among other things, breach of fiduciary duty, waste of corporate assets, and unjust enrichment. The Company is named as a nominal defendant and the plaintiff seeks, among other things, corporate governance reforms, and unspecified damages and restitution from the defendants, to be paid to the Company. In August 2019, the Court ordered a stay of this action pursuant to a stipulation of the parties pending resolution of the May v. KushCo federal class action. |
NATURE OF BUSINESS AND SIGNIF_2
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Nov. 30, 2019 | |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Business | Nature of Business KushCo Holdings, Inc. (“KushCo” or the “Company”) was incorporated in the state of Nevada on February 26, 2014. The Company specializes in marketing and selling customized packaging products, vaporizers, hydrocarbon gases, solvents, accessories and branding solutions to customers operating in the regulated medical and recreational cannabis industries. The Company provides custom branding on packaging products, and its testing standards meet the requirements set by the Consumer Product Safety Commission. The Company’s packaging products primarily consist of bottles, bags, tubes and containers. The Company maintains relationships with a broad range of manufacturers and also has sophisticated in-house labeling and customization capabilities. The Company sells a wide selection of vaporizer cartridges with a variety of core materials and heating technologies, as well as a wide selection of batteries to match the cartridges. The Company provides ultra-pure hydrocarbon gases, including isobutene, n-butane, propane, ethanol, pre-mixes, custom blends and other solvents, which are essential in the extraction process. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the activity of the Company and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information pursuant to Securities and Exchange Commission (“SEC”) rules and regulations. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included in the condensed consolidated financial statements for the interim periods presented herein, but are not necessarily indicative of operating results to be achieved for full fiscal years or other interim periods. The condensed consolidated balance sheet as of August 31, 2019 was derived from the audited financial statements as of that date, but does not include all disclosures as required by GAAP. These condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the fiscal year ended August 31, 2019 and notes thereto included in the Company’s annual report on Form 10-K for the year then ended and filed with the SEC on November 12, 2019. References to amounts in these notes to condensed consolidated financial statements are in thousands, except per share amounts, unless otherwise specified. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Significant estimates relied upon in preparing these condensed consolidated financial statements include revenue recognition, accounts receivable reserves, inventory and related reserves, expected future cash flows used to evaluate the recoverability of long-lived assets, estimated fair values of long-lived assets used to record impairment charges related to intangible assets and goodwill, amortization periods, accrued expenses, stock-based compensation, and recoverability of the Company’s net deferred tax assets and any related valuation allowance. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if past experience or other assumptions do not turn out to be substantially accurate. The Company is subject to a number of risks similar to those of other companies of similar size and having a focus of serving the cannabis industry, including, the development stage of certain products, competition, limited number of suppliers, integration of acquisitions, substantial indebtedness, government regulations, protection of proprietary rights, and dependence on key individuals. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis, thus, trade receivables do not bear interest. Trade accounts receivables are periodically evaluated for collectability based on past credit history and their current financial condition. The Company’s allowance for doubtful accounts was $1,577 and $1,058 as of November 30, 2019 and August 31, 2019, respectively. The Company’s sales return reserve was $521 and $477 as of November 30, 2019 and August 31, 2019, respectively, and is included in “Accounts receivable, net” on the Company’s condensed consolidated balance sheet. |
Inventory | Inventory Inventories are stated at the lower of cost or net realizable value using the average cost method. The Company’s inventory consists of finished goods of $40,044 and $43,768 as of November 30, 2019 and August 31, 2019, respectively. The Company also makes prepayments against the future delivery of inventory classified as prepaid inventory. The Company’s prepaid inventory was $10,785 and $7,134 as of November 30, 2019 and August 31, 2019, respectively. |
Net Loss Per Share | Net Loss Per Share The Company computes earnings per share under Accounting Standards Codification (“ASC”) Topic 260, Earnings per Share (“ASC 260”). Basic net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the potentially dilutive securities outstanding during the period. Stock options are potentially dilutive securities; and the number of dilutive options is computed using the treasury stock method. For the quarters ended November 30, 2019 and 2018, basic and diluted weighted average shares are the same, as the Company generated a net loss for the period. The computation for the quarter ended November 30, 2019 does not include 14,407 options and 16,737 warrants as their inclusion would have an anti-dilutive effect on net loss per share. The computation of diluted net loss per share for the quarter ended November 30, 2018 does not include 10,838 options and 3,750 warrants as their inclusion would have an anti-dilutive effect on net loss per share. |
Revenue Recognition | Revenue Recognition The Company markets and sells packaging products, vaporizers, hydrocarbon gases, solvents, accessories and branding solutions to customers operating in the regulated medical and recreational cannabis industries. In accordance with ASC 606, Revenue from Contracts with Customers , the Company applies the following steps to recognize revenue for the sale of products that reflects the consideration to which the Company expects to be entitled to receive in exchange for the promised goods: · Identify the contract with a customer. · Identify the performance obligations in the contract. · Determine the transaction price. · Allocate the transaction price to the performance obligations in the contract. Recognize revenue when the Company satisfies a performance obligation. |
Advertising | Advertising The Company conducts advertising for the promotion of its products and services. In accordance with ASC subtopic 720-35-25 (“ASC 720”), advertising costs are charged to expense when incurred. Advertising costs were $81 and $493 for the three months ended November 30, 2019 and 2018, respectively. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Changes to Disclosure Requirements for Fair Value Measurements , which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The ASU removes, modifies, and adds certain disclosure requirements and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is evaluating the potential impact of adoption of this standard on its consolidated financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the condensed consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | The major classes of fixed assets consist of the following: November 30, August 31, 2019 2019 Machinery and equipment $ 5,814 $ 4,430 Vehicles 603 603 Office Equipment 3,753 3,232 Leasehold improvements 3,301 3,296 Construction in progress 1,971 1,930 15,442 13,491 Accumulated Depreciation (3,092) (2,437) $ 12,350 $ 11,054 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
INTANGIBLE ASSETS | |
Schedule of Intangible assets | Weighted Average As of November 30, 2019 As of August 31, 2019 Estimated Gross Gross Useful Carrying Accumulated Net Carrying Accumulated Net Description Life Value Amortization Amount Value Amortization Amount Trade name 6 years 2,600 (1,120) 1,480 2,600 (1,011) 1,589 Non-compete agreement 4 years 2,370 (984) 1,386 2,370 (856) 1,514 $ 4,970 $ (2,104) $ 2,866 $ 4,970 $ (1,867) $ 3,103 |
Schedule of estimated remaining amortization expense | For the year ended August 31, 2020 (remaining nine months) $ 710 2021 881 2022 747 2023 528 $ 2,866 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | November 30, August 31, 2019 2019 Customer deposits $ 5,344 $ 2,992 Accrued compensation 3,775 3,485 Sales tax payable 1,062 1,047 Lease liability 1,709 — Other accrued expenses 3,767 1,936 $ 15,657 $ 9,460 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
LEASES | |
Summary of lease liabilities | Current portion of lease liabilities $ 1,709 Long term lease liabilities, net of current portion 5,525 Total lease liabilities $ 7,234 |
Summary of aggregate lease maturities | Year ended August 31, 2020 (remaining nine months) $ 1,775 2021 2,352 2022 2,139 2023 1,509 2024 616 Thereafter 500 Total minimum lease payments 8,891 Less imputed interest (1,657) Total lease liabilities $ 7,234 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of fair value of financial instruments | Fair Value at November 30, 2019 Total Level 1 Level 2 Level 3 Assets: Equity investment $ 197 $ — $ 197 $ — Liabilities: Warrant liability $ 2,240 $ — $ — $ 2,240 Fair Value at August 31, 2019 Total Level 1 Level 2 Level 3 Assets: Equity investment $ 592 $ — $ 592 $ — Liabilities: Warrant liability $ 5,444 $ — $ — $ 5,444 |
Schedule of fair value investment in smoke cartel | Investment in Smoke Cartel As of August 31, 2019 $ 592 Adjustments to estimated fair value (395) As of November 30, 2019 $ 197 Investment in Smoke Cartel As of August 31, 2018 $ — Acquisition of equity investment 1,791 Adjustments to estimated fair value 536 As of November 30, 2018 2,327 |
Schedule of warrant derivative liability | Warrant Liability Balance at August 31, 2019 $ 5,444 Adjustments to estimated fair value (3,204) Balance at November 30, 2019 $ 2,240 Warrant Liability Balance at August 31, 2018 $ 14,430 Adjustments to estimated fair value 216 Balance at November 30, 2018 $ 14,646 |
Schedule of fair value contingent acquisition liabilities | Contingent Consideration Payable Balance at August 31, 2018 $ 5,488 Adjustments to estimated fair value 394 Balance at November 30, 2018 $ 5,882 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
STOCKHOLDERS' EQUITY. | |
Schedule of assumptions used | Three Months Ended November 30, 2019 2018 Expected term in years 5.3 – 5.9 3.0 Expected volatility 64 % – 85 % 82 % – 87 % Risk-free interest rate 1.4% – 1.7 % 2.7 % – 3.0 % Expected dividend yield 0.0 % 0.0 % |
Schedule of stock option activity | Weighted Weighted Average Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Price Term (years) Value Balance Outstanding, August 31, 2019 14,761 $ 4.89 9.0 $ 3,192 Granted 1,655 2.40 Exercised (9) 2.06 $ 14 Forfeited (2,000) 5.06 Balance Outstanding, November 30, 2019 14,407 $ 4.58 8.8 $ 269 Vested and expected to vest at November 30, 2019 12,510 $ 4.56 8.8 $ 260 Exercisable, November 30, 2019 5,782 $ 4.36 8.3 $ 228 |
NATURE OF BUSINESS AND SIGNIF_3
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Aug. 31, 2019 | |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |||
Allowance for doubtful accounts | $ 1,577 | $ 1,058 | |
Sales return reserve | 521 | 477 | |
Prepaid inventory | 10,785 | 7,134 | |
Inventory finished goods | 40,044 | $ 43,768 | |
Advertising costs | $ 81 | $ 493 | |
Options | |||
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |||
Exclusion of shares that have an anti-dilutive effect on net loss per share | 14,407 | 10,838 | |
Warrant | |||
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | |||
Exclusion of shares that have an anti-dilutive effect on net loss per share | 16,737 | 3,750 |
CONCENTRATIONS OF RISK (Details
CONCENTRATIONS OF RISK (Details) | 3 Months Ended | |
Nov. 30, 2019itemcustomer | Nov. 30, 2018itemcustomer | |
Purchase | Supplier Concentration Risk | ||
Concentration Risk [Line Items] | ||
Number of vendors | item | 1 | 1 |
Concentration risk description | one vendor accounted for approximately 32% of total inventory purchases | two vendors accounted for approximately 40% respectively, of total inventory purchases |
Concentration risk, percentage | 32.00% | |
Purchase | Supplier Concentration Risk | Vendor 2 | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 56.00% | |
Revenue | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk description | each quarter had one customer which represented approximately 10% and 15%, respectively, of the Company's revenues | each quarter had one customer which represented approximately 10% and 15%, respectively, of the Company's revenues |
Concentration risk, percentage | 10.00% | 15.00% |
Number of customer | 1 | 1 |
Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk description | two customers in the aggregate that represented approximately 35% of accounts receivable | one customer that represented 16% of accounts receivable |
Concentration risk, percentage | 35.00% | 16.00% |
Number of customer | 2 | 1 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Aug. 31, 2019 | |
RELATED-PARTY TRANSACTIONS | |||
Sales recognized from related parties | $ 866 | $ 10 | |
Total accounts receivable from related parties | 1,200 | $ 465 | |
Total payments made to related party | $ 158 | $ 5 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Aug. 31, 2019 | |
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 15,442 | $ 13,491 | |
Accumulated Depreciation | (3,092) | (2,437) | |
Property and equipment, net | 12,350 | 11,054 | |
Depreciation expense | 725 | $ 265 | |
Machinery and equipment | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 5,814 | 4,430 | |
Vehicles | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 603 | 603 | |
Office Equipment | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 3,753 | 3,232 | |
Leasehold improvements | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 3,301 | 3,296 | |
Construction in progress | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 1,971 | $ 1,930 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 725 | $ 265 |
INTANGIBLE ASSETS - Intangible
INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Aug. 31, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 4,970 | $ 4,970 |
Accumulated Amortization | (2,104) | (1,867) |
Net Amount | $ 2,866 | 3,103 |
Trade name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average estimated useful life | 6 years | |
Gross Carrying Value | $ 2,600 | 2,600 |
Accumulated Amortization | (1,120) | (1,011) |
Net Amount | $ 1,480 | 1,589 |
Non-compete agreement | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average estimated useful life | 4 years | |
Gross Carrying Value | $ 2,370 | 2,370 |
Accumulated Amortization | (984) | (856) |
Net Amount | $ 1,386 | $ 1,514 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Year ended August 31, | ||
2020 (remaining nine months) | $ 710 | |
2021 | 881 | |
2022 | 747 | |
2023 | 528 | |
Net Amount | $ 2,866 | $ 3,103 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
INTANGIBLE ASSETS | ||
Amortization expense | $ 237 | $ 243 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Customer deposits | $ 5,344 | $ 2,992 |
Accrued compensation | 3,775 | 3,485 |
Sales tax payable | 1,062 | 1,047 |
Lease liability | 1,709 | 0 |
Other accrued expenses | 3,767 | 1,936 |
Accrued expenses and other current liabilities | $ 15,657 | $ 9,460 |
LEASES (Details)
LEASES (Details) $ in Thousands | 3 Months Ended |
Nov. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Lease liabilities | $ 7,234 |
ASU 2016-02 | Restatement | |
Lessee, Lease, Description [Line Items] | |
Estimated incremental borrowing rate | 10.70% |
Lease liabilities | $ 7,600 |
ROU assets | $ 6,800 |
LEASES - Lease liabilities (Det
LEASES - Lease liabilities (Details) $ in Thousands | Nov. 30, 2019USD ($) |
Lease Liabilities | |
Current portion of lease liabilities | $ 1,709 |
Long term lease liabilities, net of current portion | 5,525 |
Total lease liabilities | $ 7,234 |
LEASES - Aggregate lease maturi
LEASES - Aggregate lease maturities (Details) $ in Thousands | Nov. 30, 2019USD ($) |
Aggregate lease maturities | |
2020 (remaining nine months) | $ 1,775 |
2021 | 2,352 |
2022 | 2,139 |
2023 | 1,509 |
2024 | 616 |
Thereafter | 500 |
Total minimum lease payments | 8,891 |
Less imputed interest | (1,657) |
Total lease liabilities | $ 7,234 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
LEASES | ||
Rent expense | $ 850 | |
Weighted average remaining lease term | 4 years 1 month 6 days | |
Weighted average discount rate | 10.70% | |
Rent expense under ASC 840 | $ 752 |
DEBT - Monroe Revolving Credit
DEBT - Monroe Revolving Credit Facility (Details) - USD ($) $ in Thousands | Aug. 21, 2019 | Nov. 30, 2019 |
Line of Credit Facility [Line Items] | ||
Amortization of debt discount | $ 1,181 | |
Monroe Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 35,000 | |
Additional borrowing capacity | $ 15,000 | |
Outstanding amount | $ 5,722 | |
Interest rate (as a percent) | 10.70% | |
Closing costs incurred | $ 2,602 | |
Debt instrument, term | 5 years | 5 years |
Unamortized debt issuance costs | $ 2,501 | |
Interest expense | 296 | |
Amortization of debt discount | $ 154 |
DEBT - Monroe Warrants (Details
DEBT - Monroe Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Nov. 30, 2019 | Sep. 30, 2019 | Sep. 26, 2019 | Aug. 31, 2019 | Aug. 21, 2019 | |
Line of Credit Facility [Line Items] | |||||
Common stock, par value | $ 0.001 | $ 0.001 | |||
Warrants exercise price | $ 2.25 | $ 1.75 | |||
Monroe Subscription Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Warrants issued | 500 | ||||
Common stock, par value | $ 0.001 | ||||
Warrants exercise price | $ 4.25 | ||||
Term of warrants | 5 years | ||||
Amortization expense | $ 49 | ||||
Fair value of warrants | $ 934 |
DEBT - Long-term Debt (Details)
DEBT - Long-term Debt (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 29, 2019 | Nov. 08, 2019 | Sep. 30, 2019 | Sep. 26, 2019 | Aug. 21, 2019 |
Line of Credit Facility [Line Items] | |||||
Warrants exercise price | $ 2.25 | $ 1.75 | |||
Exchange Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Warrants issued | 650 | ||||
Warrants exercise price | $ 4.25 | ||||
Second Exchange Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | $ 24 | ||||
Issue discount | $ 1.5 | ||||
Private placement offering (the "Private Placement") | Securities Purchase Agreement (the "Purchase Agreement") | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | $ 21.3 | ||||
Issue discount | 1.3 | ||||
Gross proceeds from private placement | $ 20 |
WARRANT LIABILITY (Details)
WARRANT LIABILITY (Details) - Derivative Warrant Liability | 3 Months Ended | |||
Nov. 30, 2019USD ($) | Nov. 30, 2018USD ($) | Aug. 31, 2019USD ($) | Jun. 30, 2018USD ($)shares | |
Credit Derivatives [Line Items] | ||||
Warrants issued | shares | 3,750 | |||
Estimated fair value of outstanding warrant liabilities | $ 2,240 | $ 5,444 | $ 15,350 | |
Term of warrants | 5 years | |||
Changes in derivative liability | $ 3,204,000 | $ 216,000 | ||
Stock price | ||||
Credit Derivatives [Line Items] | ||||
Measurement input | 1.77 | |||
Volatility | ||||
Credit Derivatives [Line Items] | ||||
Measurement input | 83.1 | |||
Risk-free rate | ||||
Credit Derivatives [Line Items] | ||||
Measurement input | 1.62 | |||
Annual dividend yield | ||||
Credit Derivatives [Line Items] | ||||
Measurement input | 0 | |||
Expected life | ||||
Credit Derivatives [Line Items] | ||||
Term of warrants | 3 years 6 months |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Recurring - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Assets: | ||
Equity investment | $ 197 | $ 592 |
Liabilities | ||
Warrant liability | 2,240 | 5,444 |
Level 1 | ||
Assets: | ||
Equity investment | 0 | 0 |
Liabilities | ||
Warrant liability | 0 | 0 |
Level 2 | ||
Assets: | ||
Equity investment | 197 | 592 |
Liabilities | ||
Warrant liability | 0 | 0 |
Level 3 | ||
Assets: | ||
Equity investment | 0 | 0 |
Liabilities | ||
Warrant liability | $ 2,240 | $ 5,444 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Investment in Smoke Cartel (Details) - Level 2 - Smoke Cartel, Inc. - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Investment in Smoke Cartel | ||
Balance Beginning | $ 592 | $ 0 |
Acquisition of equity investment | 1,791 | |
Adjustments to estimated fair value | (395) | 536 |
Balance Ending | $ 197 | $ 2,327 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Activity for Warrant derivative Liability (Details) - Recurring - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance Beginning | $ 5,444 | |
Balance Ending | 2,240 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance Beginning | 5,444 | |
Balance Ending | 2,240 | |
Level 3 | Derivative Warrant Liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance Beginning | 5,444 | $ 14,430 |
Adjustments to estimated fair value | (3,204) | 216 |
Balance Ending | $ 2,240 | $ 14,646 |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS - Contingent acquisition liabilities (Details) - Contingent consideration payable - Level 3 - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2018 | Nov. 30, 2018 | |
Contingent Consideration Payable | ||
Balance at August 31, 2018 | $ 5,488 | |
Adjustments to estimated fair value | 394 | |
Balance at November 30, 2018 | $ 5,488 | $ 5,882 |
FAIR VALUE OF FINANCIAL INSTR_7
FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details) | 1 Months Ended |
Sep. 21, 2018shares | |
Smoke Cartel, Inc. | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Common stock issued for consideration to sell a web domain and inventory related to the Company's Roll-uh-Bowl ("RUB") product line | 1,410 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of assumptions used (Details) | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term in years | 3 years | |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term in years | 5 years 3 months 18 days | |
Expected volatility | 64.00% | 82.00% |
Risk-free interest rate | 1.40% | 2.70% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term in years | 5 years 10 months 24 days | |
Expected volatility | 85.00% | 87.00% |
Risk-free interest rate | 1.70% | 3.00% |
STOCKHOLDERS' EQUITY - Stock op
STOCKHOLDERS' EQUITY - Stock option activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Nov. 30, 2019 | Aug. 31, 2019 | |
Stock Options | ||
Balance Outstanding | 14,761 | |
Granted | 1,655 | |
Exercised | (9) | |
Forfeited | (2,000) | |
Balance Outstanding | 14,407 | 14,761 |
Vested and expected to vest | 12,510 | |
Exercisable | 5,782 | |
Weighted Average Exercise Price | ||
Balance Outstanding | $ 4.89 | |
Granted | 2.40 | |
Exercised | 2.06 | |
Forfeited | 5.06 | |
Balance Outstanding | 4.58 | $ 4.89 |
Vested and expected to vest | 4.56 | |
Exercisable | $ 4.36 | |
Weighted Average Remaining Contractual Term Outstanding | 8 years 9 months 18 days | 9 years |
Vested and expected to vest | 8 years 9 months 18 days | |
Weighted Average Remaining Contractual Term Exercisable | 8 years 3 months 18 days | |
Aggregate Intrinsic Value, Balance Outstanding | $ 269 | $ 3,192 |
Aggregate Intrinsic Value Granted | 0 | |
Aggregate Intrinsic Value, Exercised | 14 | |
Aggregate Intrinsic Value, Forfeited | 0 | |
Aggregate Intrinsic Value, Vested and expected to vest | 260 | |
Aggregate Intrinsic Value Exercisable | $ 228 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information 1 (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2019 | Sep. 26, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Nov. 30, 2019 | Sep. 26, 2019 | Aug. 31, 2019 |
Stockholders Equity [Line Items] | |||||||
Preferred stock, shares authorized | 10,000 | 10,000 | |||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares issued | 0 | 0 | |||||
Preferred stock, shares outstanding | 0 | 0 | |||||
Common stock, shares authorized | 265,000 | 265,000 | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Common stock, shares issued | 107,361 | 90,041 | |||||
Common stock, shares outstanding | 107,361 | 90,041 | |||||
Issuance of common stock and warrants for cash, net of offering costs (in shares) | 17,198 | ||||||
Warrants exercise price | $ 2.25 | $ 2.25 | $ 1.75 | ||||
Gross proceeds from the Offering | $ 30.1 | ||||||
Net Proceeds After Deducting Placement Agent Fees And Estimated Offering Expense | $ 27.4 | ||||||
Securities Purchase Agreement (the "Purchase Agreement") | |||||||
Stockholders Equity [Line Items] | |||||||
Term Of Warrants Exercisable | 5 years |
STOCKHOLDERS' EQUITY - Additi_2
STOCKHOLDERS' EQUITY - Additional Information 2 (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
STOCKHOLDERS' EQUITY. | ||
Stock compensation expense | $ 4,662 | $ 1,808 |
STOCKHOLDERS' EQUITY - Additi_3
STOCKHOLDERS' EQUITY - Additional Information 3 (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | Aug. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average remaining contractual term | 8 years 9 months 18 days | 9 years | |
Unrecognized compensation cost related to non-vested share | $ 20,393 | ||
Weighted-average period, cost expected to be recognized | 2 years 1 month 6 days | ||
Stock option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant-date fair value of options granted | $ 1.41 | $ 3.10 | |
Stock compensation expense | $ 2,933 | $ 1,469 | |
2016 Stock Incentive Plan (the Plan) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares issued | 18,000 | ||
Share-based payment award vesting period | 3 years | ||
Weighted average remaining contractual term | 10 years |
STOCKHOLDERS' EQUITY - Additi_4
STOCKHOLDERS' EQUITY - Additional Information 4 (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of stock issued to investor in exchange for services | 90 | 123 |
Value of stock issued to investor in exchange for services | $ 171 | $ 124 |
Stock issued during period value for current and prepaid services | 828 | |
Weighted-average period, cost expected to be recognized | 2 years 1 month 6 days | |
Prepaid expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Value of stock issued to investor in exchange for services | 704 | |
Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | $ 1,729 | $ 339 |
Unrecognized compensation cost related to non-vested share | $ 2,077 | |
Weighted-average period, cost expected to be recognized | 1 year 7 months 6 days |