NOTE 4 - ACQUISITION OF SUMMIT INNOVATIONS, LLC On May 2, 2018, the Company completed its acquisition of Summit, a leading distributor of hydrocarbon gases to the legal cannabis industry. Pursuant to the terms of the Merger Agreement with Summit, Summit merged with and into KCH, a wholly-owned subsidiary of the Company, with KCH as the surviving entity. The acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805. The fixed purchase consideration paid to the Members of Summit at the closing included the cash consideration, consisting of an aggregate of $905 in cash, net of cash received, $188 in cash held back and the share consideration, consisting of an aggregate of 1,280 shares common stock. The Company held back approximately 640 shares of common stock from the share consideration for a period of 15 months for potential post-closing working capital and/or indemnification claims relating to, among other things, breaches of representations, warranties and covenants contained in the Merger Agreement. The Members may become entitled to receive contingent equity consideration of up to an additional 1,280 shares of common stock, in the aggregate, based on the net revenue performance of the Summit business during a one-year period following the closing. Fair value of consideration transferred (based on the May 2, 2018 closing price of $5.59) was as follows: May 2, 2018 Measurement Period August 31, 2018 (As initially reported) Adjustments (1) (As adjusted) Cash $ 945 $ (40) $ 905 Cash held back 500 (312) 188 Fair value of common shares issued to Summit members 3,578  3,578 Fair value common shares held back 3,578 (762) 2,816 Fair value contingent consideration payable in common shares 7,155  7,155 Total $ 15,756 $ (1,114) $ 14,642 (1) As of August 31, 2018, the Company recorded measurement period adjustments to decrease cash held back from $500 to $188, to decrease cash, net of cash acquired, from $945 to $905, and to decrease the fair value of shares held back from $3,578 to $2,816. The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed: May 2, 2018 Measurement Period August 31, 2018 (As initially reported) Adjustments (1) (As adjusted) Accounts receivable, net of allowance $ 471 $ (253) $ 218 Prepaid expenses and other current assets 87  87 Inventory 237  237 Property and equipment, net 649  649 Accounts payable (1,377) 103 (1,274) Accrued expenses and other current liabilities (358)  (358) Notes payable (987)  (987) Total identifiable net assets (1,278) (150) (1,428) Non-compete  620 620 Goodwill 17,034 (1,584) 15,450 Total fair value of consideration $ 15,756 $ (1,114) $ 14,642 (1) As of August 31, 2018, the Company recorded measurement period adjustments to allocate $620 to the non-compete, decrease accounts receivable, net of allowance, from $471 to $218 and decrease accounts payable from $1,377 to $1,274. As discussed in Note 2, in connection with the Companys initial acquisition accounting, the Company inadvertently classified the contingent equity consideration as equity. Given that the earnout arrangements allow for a variable number of shares to be issued depending on how the Summit business performs against the revenue target, the Company should have classified the contingent equity consideration as a liability until the contingency is resolved. Accordingly, the Company has recorded the changes in the fair value of its contingent consideration within its statements of operations. The following unaudited pro forma financial data assumes the acquisition had occurred at September 1, 2016. Pro forma results have been prepared by adjusting the Companys historical results to include Summit's results of operations. The unaudited pro forma results presented do not necessarily reflect the results of operations that would have resulted had the acquisition been completed at September 1, 2016, nor do they indicate the results of operations in future periods. Additionally, the unaudited pro forma results do not include the impact of possible business model changes, nor do they consider any potential impacts of current market conditions or revenues, reduction of expenses, asset dispositions, or other factors. The impact of these items could alter the following pro forma results: Year Ended Year Ended August 31, 2018 August 31, 2017 Unaudited Unaudited Total revenues $ 56,950 $ 19,018 Net loss $ (26,086) $ 1,458 Loss per share: Basic $ (0.40) $ (0.03) Diluted $ (0.40) $ (0.02) On August 13, 2019, the Company issued an aggregate of 1,147 shares of common stock associated with the contingent equity consideration and holdback shares in accordance with the terms of the Merger Agreement. As of August 31, 2019, the Company is holding back the remaining 200 shares pending resolution of certain claims.