Quarterly report pursuant to Section 13 or 15(d)

Convertible Instruments (Tables)

v3.5.0.2
Convertible Instruments (Tables)
 3 Months Ended
Aug. 31, 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		     Warrants issued on
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 )    $ —       $ —    
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
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   
Short-Term Convertible Notes  
Activity Related to Notes

Activity related to the Short-Term Convertible Notes for the three months ended August 31, 2016, and fiscal year ended May 31, 2016 was as follows:

 

     August 31, 2016      May 31, 2016  

Face amount of Notes

    $ —         $ 3,981,050   

Unamortized discounts

      —           —     

Tender offer conversions

      —           (2,693,800 ) 

Conversions

      —           (525,000 ) 

Payments upon maturity

      —           (762,250 ) 
  

 

 

     

 

 

  

Total carrying value of Notes

    $ —         $ —     
  

 

 

     

 

 

  
2013 Convertible Notes  
Activity Related to Notes

Activity related to the 2013 Convertible Notes for the three months ended August 31, 2016 and fiscal year ended May 31, 2016 was as follows:

 

     August 31, 2016      May 31, 2016  

Face amount of Notes

    $ —        $ 50,000   
  

 

 

     

 

 

  

Unamortized discount

      —          —    

Conversions

      —          (50,000 ) 
  

 

 

     

 

 

  

Total carrying value of Notes

    $ —        $ —