Quarterly report pursuant to Section 13 or 15(d)

Convertible Instruments (Tables)

v3.19.3
Convertible Instruments (Tables)
 3 Months Ended
Aug. 31, 2019
Warrants At Fair Value And Beneficial Conversion Feature At Intrinsic Value 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:
 
    January 30, 2019  
Fair value of redemption provision
   $  1,465,008  
Relative fair value of equity classified warrants
     858,353  
Beneficial conversion feature
     2,676,639  
   
 
 
  
    $ 5,000,000  
   
 
 
  
Activity Related to Notes
Activity related to the June 2018 Note and the January 2019 Note is as follows:
 
    Short Term     Long Term     Total  
June 2018 Note
   $  2,100,000     $ 3,600,000     $ 5,700,000  
Monthly redemption provision
     2,100,000       (2,100,000 )      0  
Note amendment, net
     0       111,410       111,410  
Redemptions
     (676,582 )      (1,783,418 )      (2,460,000 ) 
Interest accretion - June 2018 and January 2019 Notes
     161,933       402,622       564,555  
   
 
 
    
 
 
    
 
 
  
Carrying value of Notes at May 31, 2019
   $ 3,685,351     $ 230,614     $ 3,915,965  
   
 
 
    
 
 
    
 
 
  
   
 
 
    
 
 
    
 
 
  
Two Thousand And Nineteen Short Term Convertible Notes [Member]  
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 - 2019
Expected dividend yield
   0%
Stock price volatility
  
55.8 - 55.88%
Expected term
   5 year
Risk-free interest rate
  
2.48 - 2.56%
Grant-date fair value
  
$0.30 - $0.38
Activity Related to Notes
Activity related to the 2019 Short-term Convertible Notes was as follows:
 
    August 31, 2019     May 31, 2018  
Face amount of Short-term Convertible Notes
   $  5,460,000     $ 5,460,000  
   
 
 
    
 
 
  
Unamortized discount
     (439,000 )      (1,470,000 ) 
Unamortized issuance costs
     (120,000 )      (404,000 ) 
   
 
 
    
 
 
  
Carrying value of Short-term Convertible Notes
   $ 4,901,000     $ 3,586,000