Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY

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STOCKHOLDERS' EQUITY
9 Months Ended
May 31, 2020
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY STOCKHOLDERS’ EQUITY
Preferred Stock
The Company’s authorized preferred stock is 10,000 shares with a par value of $0.001. As of May 31, 2020, 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 May 31, 2020, and August 31, 2019, there were 119,933 and 90,041 shares issued and outstanding, respectively.
On September 26, 2019, the Company entered into purchase agreements with certain accredited investors pursuant to which the Company issued and sold an aggregate of 17,198 units, with each unit consisting of one share of its common stock and a warrant to purchase half a share of its 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 to the Company of approximately $30.1 million. The aggregate net proceeds to the Company 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.
On February 6, 2020, the Company entered into purchase agreements with certain accredited investors pursuant to which the Company issued and sold an aggregate of 10,000 units, with each unit consisting of one share of its common stock and a warrant to purchase half a share of its common stock in a registered direct offering (the “February 2020 Offering”). The purchase price for a unit was $1.60. The closing of the February 2020 Offering occurred on February 10, 2020 and resulted in aggregate gross proceeds to the Company of approximately $16.0 million. The aggregate net proceeds from the February 2020 Offering, after deducting the placement agent fees and other offering expenses, was approximately $14.6 million. Subject to certain ownership limitations, the warrants were immediately exercisable at an exercise price equal to $2.00 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 $2,985 and $2,667 for the three months ended May 31, 2020 and May 31, 2019, respectively, and $11,074 and $8,839 for the nine months ended May 31, 2020 and May 31, 2019, 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 2018-7 which addresses several aspects of the accounting for non-employee share-based payment transactions and expands the scope of ASC 718, Compensation, to include share-based payment transactions for acquiring goods and services from non-employees. Under the simplified standard, non-
employee 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 closing market price of the Company’s common stock at the date of grant and have 10 years 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 only 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 nine months ended May 31, 2020 and May 31, 2019:
  Nine Months Ended
  May 31, 2020 May 31, 2019
Expected term in years
5.3 – 5.9
1-3
Expected volatility
64% – 120%
69% – 87%
Risk-free interest rate
0.3% – 1.7%
2.3% – 3.0%
Expected dividend yield 0.0% 0.0%
The expected term of stock options granted during the nine months ended May 31, 2020 and May 31, 2019 is based on management's judgement and reflects expected exercise patterns. The expected volatility of these stock options 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 of these options was increased, a higher expected volatility was used, or if the expected dividend yield increased.
The following table summarizes the Company's stock option activity during the nine months ended May 31, 2020:
Stock
Options
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term (years)
Aggregate
Intrinsic
Value
Balance Outstanding, August 31, 2019 14,761    $ 4.89    9.0 $ 3,192   
Granted 3,667    2.24   

Exercised (9)   2.06    $ 14   
Forfeited (7,051)   4.74   

Balance Outstanding, May 31, 2020 11,368    $ 4.10    8.4 $ 358   
Vested and expected to vest at May 31, 2020 10,187    4.13    8.3 $ 285   
Exercisable, May 31, 2020 5,998    $ 4.40    7.9 $ 26   
Stock compensation expense related to stock options was $7,348 and $5,740 for the nine months ended May 31, 2020 and May 31, 2019, respectively. The weighted-average grant-date fair value of options granted during the nine months ended May 31, 2020 and May 31, 2019, was $1.39 and $2.59, respectively.
As of May 31, 2020, there was $12,482 of total unrecognized compensation cost related to non-vested stock options granted under the Plan. The expense is expected to be recognized over a weighted-average period of 1.7 years.
Restricted Stock and Restricted Stock Units
During the nine months ended May 31, 2020, the Company awarded 533 shares of restricted stock to consultants in exchange for $662 of services rendered.
During the nine months ended May 31, 2019, the Company issued 295 shares of restricted stock to consultants in exchange for $377 of services rendered and $1,277 of prepaid services, for a total of $1,654. The prepaid services are included in prepaid expenses on the condensed consolidated balance sheet as of May 31, 2019.
Stock-based compensation expense related to restricted stock awards was $3,726 and $3,099, respectively, for the nine months ended May 31, 2020 and May 31, 2019.
During the nine months ended May 31, 2020, the Company awarded 174 shares of restricted stock units to directors for serving on the board of directors.
As of May 31, 2020, $2,329 of total unrecognized compensation cost related to restricted stock units is expected to be recognized over a weighted average period of 1.3 years.