Annual report pursuant to Section 13 and 15(d)

Convertible Instruments (Tables)

v3.10.0.1
Convertible Instruments (Tables)
 12 Months Ended
May 31, 2018
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     Warrants issued on  
     September 26, 2014     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.  

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

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 )    $ —       $ —    
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
Activity Related to Notes

Activity related to the 2017 Notes was as follows:    

 

     For the year ended May 31,  
     2018      2017  

Face amount of Notes

    $ 6,038,500      $ 1,150,000  

Unamortized discount

      —          (92,000 ) 

Registered direct equity offering

      (5,788,500 )       —    

Note repayment

      (250,000 )       —    
  

 

 

     

 

 

  

Carrying value of Notes, net

    $ —        $ 1,058,000  
  

 

 

     

 

 

  
Short-Term Convertible Notes  
Activity Related to Notes

Activity related to the 2015 Notes for fiscal year ended May 31, 2016 was as follows:

 

     May 31, 2016  

Face amount of Notes

    $ 3,981,050  
  

 

 

  

Unamortized discount

      —    

Tender offer conversions

      (2,693,800 ) 

Conversions

      (525,000 ) 

Payments upon maturity

      (762,250 ) 
  

 

 

  

Total carrying value of Notes

    $ —    
  

 

 

  
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 year

Risk-free interest rate

    1.46%-1.58%

Grant-date fair value

    $0.52-$0.76

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

 

     2018   2017

Expected dividend yield

    0%   0%

Stock price volatility

    69.8%   69%

Expected term

    5 year   5 year

Risk-free interest rate

    1.77-1.93%   1.75%

Grant-date fair value

    $0.30-$0.39   $0.24