Quarterly report pursuant to Section 13 or 15(d)

Convertible Instruments (Tables)

v3.3.1.900
Convertible Instruments (Tables)
 9 Months Ended
Feb. 29, 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     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.

 

            Nine Months Ended February 29, 2016        
     May 31, 2015      Debt Discount      Fair Value     Conversion     February 29, 2016  

AVCP Convertible note 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 note payable

      —           —           —          (35,627 )      —     

Fair Value of Common Stock Issued

      —           —           —          4,714,168        —     

Loss on conversion

      —           —           —          (584,177 )      —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

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

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
Short-Term Convertible Notes  
Activity Related to Notes

Activity related to the Short-Term Convertible Notes for the nine months ended February 29, 2016 and fiscal year ended May 31, 2015 was as follows:

 

     February 29, 2016      May 31, 2015  

Face amount of Notes

    $ 3,981,050       $ 3,981,050   

Unamortized discounts

      —         $ (2,390,063 ) 

Tender offer conversions

      (2,693,800 )       —     

Conversions

      (525,000 )       —     

Payments upon maturity

      (762,250 )       —     
  

 

 

     

 

 

  

Total carrying value of Notes

    $ —         $ 1,590,987   
  

 

 

     

 

 

  
2013 Convertible Notes  
Activity Related to Notes

Activity related to the 2013 Convertible Notes for the nine months ended February 29, 2016 and fiscal year ended May 31, 2015 was as follows:

 

     February 29, 2016      May 31, 2015  

Face amount of Notes

    $ 50,000       $ 4,271,250   
  

 

 

     

 

 

  

Unamortized discount

      —          (6,529 ) 

Conversions

      (50,000 )       (4,221,250 ) 
  

 

 

     

 

 

  

Total carrying value of Notes

    $ —        $ 43,471   
  

 

 

     

 

 

  
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 interest rate and expected dividend yield at the commitment date.

 

     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

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 interest rate and expected dividend yield at the commitment date.

 

     2015

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