General form of registration statement for all companies including face-amount certificate companies

Convertible Instruments (Tables)

v2.4.1.9
Convertible Instruments (Tables)
 9 Months Ended 12 Months Ended
Feb. 28, 2014
May 31, 2014
Activity Related to Notes

Activity related to the Notes was as follows:

 

     February 28, 2015      May 31, 2014  

Face amount of Notes

    $ 4,271,250       $ 7,221,250   
  

 

 

     

 

 

  

Unamortized discount

   (633,741 )    (1,932,566 ) 

Repayments

   —        (500,000 ) 

Conversions

   (1,175,000 )    (2,450,000 ) 
  

 

 

     

 

 

  

Total carrying value of Notes

   2,462,509      2,338,684   

Short-term portion of Notes

   (2,462,509 )    —     
  

 

 

     

 

 

  

Long-term portion of Notes

 $ —      $ 2,338,684   
  

 

 

     

 

 

  

Activity related to the Notes was as follows:

 

     May 31, 2014      May 31, 2013  

Face amount of Notes

    $ 7,221,250       $ 6,588,250   
  

 

 

     

 

 

  

Unamortized discount

   (1,932,566 )    (4,539,886 ) 

Repayments

   (500,000 )    —     

Conversions

   (2,450,000 )    (567,000 ) 
  

 

 

     

 

 

  

Total carrying value of Notes

   2,338,684      1,481,364   

Short-term portion of Notes

   —        (328,347 ) 
  

 

 

     

 

 

  

Long-term portion of Notes

 $ 2,338,684    $ 1,153,017   
  

 

 

     

 

 

  
Fair Value of Warrants

The fair value of the warrants was determined using a Black Scholes option model using the following assumptions:

 

     Warrants issued on
September 26, 2014		    Warrants issued on
February 6, 2015

Risk free interest rate

    1.82%    1.48%

Expected life

    5 years    5 years

Expected volatility

    136%    119%

Dividend yield

    0.00%    0.00%
 
Allocation of Cash Proceeds Derivative Liability at Its Fair Value and Warrant at Its Relative Fair Value, with Residual Allocation of Host AVCP Note Agreement

Based on the previous conclusions, the Company allocated the cash proceeds first to the derivative liability at its fair value and then to the warrants at their relative fair value, with the residual allocated to the host AVCP Notes as follows:

 

                   Nine-months Ended
February 28, 2015		        
     September 26, 2014      February 6, 2015      Amortization
Debt Discount		      Change in
Fair Value		     February 28, 2015  

AVCP Convertible note payable

    $ 1,074,617       $ 1,039,387       $ 203,711       $ —        $ 2,317,715   

Compound embedded derivative

      767,038         403,226         —           (455,970 )      714,294   

Warrants (equity allocation)

      158,345         57,387         —           —          215,732   
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  
$ 2,000,000    $ 1,500,000    $ 203,711    $ (455,970 )  $ 3,247,741   
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  
 
Weighted Average Assumptions to Value Investor Warrants  

The Company utilized the following weighted average assumptions to value the above investor warrants:

 

     2014    2013

Expected dividend yield

    -0-%    -0-%

Stock price volatility

    78 - 93%    70 - 94%

Expected term

    3-5 years    2 years

Risk-free interest rate

      .64 -1.42%    0.28%

Grant-date fair value

    $  .66 - $.72    $  .11 - $1.10