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

Convertible Instruments (Tables)

v3.2.0.727
Convertible Instruments (Tables)
 12 Months Ended
May. 31, 2015
Weighted Average Assumptions to Value Investor Warrants

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

 

                                     
             2015                   2014        

Expected dividend yield

    0%   0%

Stock price volatility

    80.68%   78-93%

Expected term

    .50 yr   3-5 years

Risk-free interest rate

    0.12%   .64-1.42%

Grant-date fair value

    $0.15   $.66-$.72

 

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

 

     2015

Expected dividend yield

    0%

Stock price volatility

    88.79%

Expected term

    5 years

Risk-free interest rate

    1.46%-1.58%

Grant-date fair value

    $0.52-$0.76

Activity Related to Notes

Activity related to the Notes was as follows:

 

     May 31, 2015      May 31, 2014  

Face amount of Notes

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

 

 

     

 

 

  

Unamortized discount

   (6,529 )    (1,932,566 ) 

Repayments

   —        (500,000 ) 

Conversions

   (4,221,250 )    (2,450,000 ) 
  

 

 

     

 

 

  

Total carrying value of Notes

 $ 43,471    $ 2,338,684   
  

 

 

     

 

 

  

Short-term portion of Notes

 $ 43,471    $ —     
  

 

 

     

 

 

  

Long-term portion of Notes

 $ —      $ 2,338,684   
  

 

 

     

 

 

  
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:

 

     September 26, 2014      February 6, 2015      Debt Discount      Fair Value      May 31, 2015  

AVCP convertible notes payable

    $ 1,074,617       $ 1,039,387       $ 523,614       $ —         $ 2,637,618   

Compound embedded derivative

      767,038         403,226         —           838,643         2,008,907   

Warrants (equity allocation)

      158,345         57,387         —           —           215,732   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
$ 2,000,000    $ 1,500,000    $ 523,614    $ 838,643    $ 4,862,257