Kush Bottles, Inc.

CIK:0001604627|SEC Filings

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2021	May 31, 2020	May 31, 2021	May 31, 2020
Income Statement [Abstract]
Net revenue	$ 28,319	$ 22,264	$ 87,964	$ 87,369
Cost of goods sold	23,950	19,892	71,415	86,634
Gross profit	4,369	2,372	16,549	735
Operating expenses:
Selling, general and administrative	9,099	12,719	28,853	60,977
Restructuring costs	274	952	568	8,253
Total operating expenses	9,373	13,671	29,421	69,230
Loss from operations	(5,004)	(11,299)	(12,872)	(68,495)
Other income (expense):
Change in fair value of warrant liability	821	(1,160)	(295)	3,435
Change in fair value of equity investment	(699)	(9)	1,627	(1,100)
Interest expense	(1,003)	(1,487)	(4,107)	(4,594)
Loss on extinguishment of debt	0	0	(1,324)	0
Other income (expense), net	(1,936)	468	(343)	386
Total other income (expense)	(2,817)	(2,188)	(4,442)	(1,873)
Loss before income taxes	(7,821)	(13,487)	(17,314)	(70,368)
Income tax expense	(156)	0	(156)	0
Net loss	$ (7,977)	$ (13,487)	$ (17,470)	$ (70,368)
Net loss per share:
Basic net loss per common share (in dollars per share)	$ (0.05)	$ (0.11)	$ (0.12)	$ (0.64)
Diluted net loss per common share (in dollars per share)	$ (0.05)	$ (0.11)	$ (0.12)	$ (0.64)
Weighted-average common shares outstanding
Basic weighted average number of common shares outstanding (in shares)	159,381	119,574	140,155	110,440
Diluted weighted average number of common shares outstanding (in shares)	159,381	119,574	140,155	110,440
Other comprehensive income
Foreign currency translation	$ 260	$ 0	$ 260	$ 0
Comprehensive loss	$ (7,717)	$ (13,487)	$ (17,210)	$ (70,368)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	May 31, 2021	May 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (17,470)	$ (70,368)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,564	3,259
Amortization of debt discount	3,669	3,902
Bad debt (recovery)/provision	(380)	10,421
Bad debt recovery on note receivable	(513)	0
Sales return (recovery)/provision	(14)	30
Inventory obsolescence	0	2,218
Inventory reserve (recovery)/provision	(3,816)	14,619
Loss (gain) on disposal of assets	62	26
Gain on termination of leases	0	(798)
Impairment of assets	0	6,895
Change in fair value of equity investment	(1,627)	1,100
Stock compensation expense	6,159	11,074
Change in fair value of warrant liability	295	(3,435)
Loss on extinguishment of debt	1,324	0
Right-of-use assets amortization	953	0
Gain on forgiveness of PPP loan	(1,900)	0
Changes in operating assets and liabilities:
Accounts receivable	2,295	6,854
Inventory	(20,505)	5,101
Prepaid expenses and other current assets	(5,772)	(7,854)
Other non-current assets	(4)	498
Accounts payable	4,797	(5,813)
Customer deposits	1,293	1,225
Accrued expenses and other current liabilities	1,073	1,600
Other non-current liabilities	(1,613)	(752)
Net cash used in operating activities	(29,130)	(20,198)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, equipment, and intangibles	(1,192)	(4,317)
Net cash used in investing activities	(1,192)	(4,317)
CASH FLOWS FROM FINANCING ACTIVITIES
Financing cost paid in connection with extinguishment of debt	(195)	0
Repayment of capital leases	(33)	(86)
Repayment on notes payable	(17,000)	0
Proceeds from notes payable	0	1,900
Proceeds from stock option exercises	18	0
Proceeds from issuance of common stock	37,294	42,095
Proceeds from line of credit	93,743	76,325
Repayments on line of credit	(92,879)	(88,575)
Net cash provided by financing activities	20,948	31,659
NET INCREASE (DECREASE) IN CASH	(9,374)	7,144
CASH AT BEGINNING OF PERIOD	10,476	3,944
CASH AT END OF PERIOD	1,102	11,088
CASH PAID FOR:
Interest	439	624
NON-CASH INVESTING AND FINANCING ACTIVITIES
Right-of-use assets obtained in exchange for new operating lease liabilities	4,592	0
Services prepaid for in common stock	0	646
Accrued and unpaid amounts for purchase of property & equipment	148	403
Stock issued for amendment of debt agreement	6,117	0
Shares issued in exchange for equity investment in XS Financial	0	2,528
Common stock issuance costs in accounts payable	44	0
Debt financing cost paid for in common stock	$ 83	$ 0

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	May 31, 2021	Aug. 31, 2020
Current assets:
Cash	$ 1,102	$ 10,476
Accounts receivable, net	7,398	9,427
Inventory, net	52,370	28,049
Prepaid expenses and other current assets	15,339	9,054
Total current assets	76,209	57,006
Goodwill	52,267	52,267
Intangible assets, net	631	1,000
Property and equipment, net	7,883	8,801
Other assets	13,380	8,582
Total Assets	150,370	127,656
Current liabilities:
Accounts payable	9,307	4,282
Customer deposits	4,480	3,188
Accrued expenses and other current liabilities	8,236	8,195
Current portion of notes payable	0	20,692
Line of credit	663	0
Total current liabilities	22,686	36,357
Long-term liabilities:
Warrant liability	661	365
Other non-current liabilities	7,045	4,205
Total long-term liabilities	7,706	4,570
Total liabilities	30,392	40,927
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued and outstanding	0	0
Common stock, $0.001 par value, 265,000 shares authorized, 159,381 and 125,708 shares issued and outstanding as of May 31, 2021 and August 31, 2020, respectively	159	126
Additional paid-in capital	277,677	227,253
Accumulated other comprehensive income	260	0
Accumulated deficit	(158,118)	(140,650)
Total stockholders' equity	119,978	86,729
Total liabilities and stockholders' equity	$ 150,370	$ 127,656