Convertible Instruments (Tables)
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9 Months Ended |
Feb. 28, 2019 |
Activity Related to Notes |
Activity related to the June 2018 Note and the January 2019 Note is as follows:
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February 28, 2019 |
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Short term |
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Long term |
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Total |
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May 31, 2018 |
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June 2018 Note |
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$ |
2,100,000 |
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$ |
3,600,000 |
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$ |
5,700,000 |
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— |
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Monthly redemption provision |
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2,100,000 |
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(2,100,000 |
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— |
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— |
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Note amendment, net |
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— |
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111,410 |
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111,410 |
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Redemptions |
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— |
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(455,000 |
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(455,000 |
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— |
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January 2019 Note |
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— |
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69,006 |
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69,006 |
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— |
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Carrying value of Notes at February 28, 2019 |
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$ |
4,200,000 |
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$ |
1,225,416 |
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$ |
5,425,416 |
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$ |
— |
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Warrants At Fair Value And Beneficial Conversion Feature At Intrinsic Value [Table Text Block] |
The net proceeds of $5.0 million were allocated first to the redemption provision at its fair value, then to the warrants at their relative fair value and the beneficial conversion feature at its intrinsic value as follows:
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Fair value of redemption provision |
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Relative fair value of equity classified warrants |
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Beneficial conversion feature |
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Short-Term Convertible Notes |
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Activity Related to Notes |
Activity related to the 2018 Short-term Convertible Notes was as follows:
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Face amount of Short-term Convertible Notes |
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Registered direct equity offering |
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Carrying value of Short-term Convertible Notes |
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Two Thousand And Nineteen Short Term Convertible Notes [Member] |
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Activity Related to Notes |
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Face amount of Short-term Convertible Notes |
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Unamortized issuance costs |
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Carrying value of Short-term Convertible Notes |
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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.
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Investor Warrants |
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Summary of Fair Value Valuation Technique |
In connection with the sale of the 2018 Short-term Convertible Notes, detachable common stock warrants to purchase a total of 4,025,656 common shares, with an exercise price of $1.00 per share and a five-year term were issued to the investors. 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.
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