Quarterly report pursuant to Section 13 or 15(d)

Convertible Instruments (Tables)

v3.10.0.1
Convertible Instruments (Tables)
 6 Months Ended
Nov. 30, 2018
Activity Related to Notes

Activity related to the Note was as follows:

 

     November 30, 2018         
     Short term      Long term      Total      May 31, 2018  

Face amount of convertible promissory note

    $ —        $ —        $ —        $  —    

June 26, 2018 convertible promissory note

      2,100,000        3,600,000        5,700,000        —    

Monthly redemption

      700,000        (700,000 )       —          —    

Unamortized discount at August 31, 2018

      (344,614 )       (281,628 )       (626,242 )       —    
  

 

 

     

 

 

     

 

 

     

 

 

  

Carrying value of convertible notes at August 31, 2018

    $ 2,455,386      $ 2,618,372      $ 5,073,758      $ —    
  

 

 

     

 

 

     

 

 

     

 

 

  

Carrying value of convertible notes at November 30, 2018

    $ 4,200,000      $ 1,396,974      $ 5,596,974      $ —    
  

 

 

     

 

 

     

 

 

     

 

 

  
Convertible Note Redemption Provision Derivative Liability [Member]  
Summary of Fair Value Valuation Technique

The Company estimated the fair value of the redemption provision using the following assumptions on the closing date of November 15, 2015 and November 30, 2018:

 

     November 15,
2018		     November 30,
2018		  

Fair value of underlying stock

    $ 0.57     $ 0.58  

Risk free rate

      2.78 %      2.78 % 

Expected term (in years)

      1.61       1.61  

Stock price volatility

      58.8 %      58.8 % 

Expected dividend yield

      —         —    

Discount factor

      85 %      85 % 
Short-Term Convertible Notes  
Activity Related to Notes

Activity related to the short-term Convertible Notes was as follows:

 

     November 30, 2018      May 31, 2018  

Face amount of short-term Convertible Notes

    $ —        $ 6,038,500  
  

 

 

     

 

 

  

Unamortized discount

      —          —    

Registered direct equity offering

      —          (5,788,500 ) 

Note repayment

      —          (250,000 ) 
  

 

 

     

 

 

  

Carrying value of short-term Convertible Notes

    $ —        $ —    
  

 

 

     

 

 

  
Investor Warrants  
Summary of Fair Value Valuation Technique

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

Expected dividend yield

    0%

Stock price volatility

    69.80%

Expected term

    5 year

Risk-free interest rate

    1.77-1.93%

Grant-date fair value

    $0.30-$0.39