Quarterly report pursuant to Section 13 or 15(d)

Convertible Instruments (Tables)

v3.6.0.2
Convertible Instruments (Tables)
 6 Months Ended
Nov. 30, 2016
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 Convertible Notes as presented below.

 

     May 31, 2015      Year Ended May 31, 2016     May 31, 2016  
        Debt Discount      Fair Value     Conversion    

AVCP Convertible notes payable

    $ 2,637,618       $ 94,344       $ —       $ (2,731,962 )    $ —    

Compound embedded derivative

      2,008,907         —          (646,505 )      (1,362,402 )      —    

Warrants (equity allocation)

      215,732         —          —         —         —    

Accrued interest on notes payable

              (35,627 )   

Fair Value of Common Stock Issued

              4,714,168     

Loss on conversion

              (584,177 )   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
   $ 4,862,257       $ 94,344       $ (646,505 )    $ —       $ —    
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
Investor Warrants  
Weighted Average Assumptions to Value Investor Warrants

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
Detachable Common Stock Warrants  
Weighted Average Assumptions to Value Investor Warrants

The Company determined the fair value of the new warrants using the Black-Scholes option pricing model utilizing certain weighted-average assumptions, such as expected stock price volatility, term of the warrants, risk-free rate and expected dividend yield at the commitment date.

 

     2016

Expected dividend yield

    0%

Stock price volatility

    64.56% – 69.30%

Expected term

    1 year

Risk-free interest rate

    0.33%

Grant-date fair value

    $0.15 – $0.18
Short-Term Convertible Notes  
Activity Related to Notes

Activity related to the Short-Term Convertible Notes for the six-months ended November 30, 2016, and fiscal year ended May 31, 2016 was as follows:

 

     November 30, 2016      May 31, 2016  

Face amount of Notes

    $ —        $ 3,981,050   

Unamortized discounts

      —          —    

Tender offer conversions

      —          (2,693,800 ) 

Conversions

      —          (525,000 ) 

Payments upon maturity

      —          (762,250 ) 
  

 

 

     

 

 

  

Total carrying value of Notes

    $ —        $ —    
  

 

 

     

 

 

  
2013 Convertible Notes  
Activity Related to Notes

Activity related to the 2013 Convertible Notes for the six-months ended November 30, 2016 and fiscal year ended May 31, 2016 was as follows:

 

     November 30, 2016      May 31, 2016  

Face amount of Notes

    $ —        $ 50,000   
  

 

 

     

 

 

  

Unamortized discount

      —          —    

Conversions

      —          (50,000 ) 
  

 

 

     

 

 

  

Total carrying value of Notes

    $ —        $ —