Annual report pursuant to Section 13 and 15(d)

Consolidated Statement of Cash Flows

Consolidated Statement of Cash Flows - USD ($)
12 Months Ended
May. 31, 2015
May. 31, 2014
Cash flows from operating activities:    
Net loss $ (25,088,070) $ (12,431,413)
Adjustments to reconcile net loss to net cash used by operating activities:    
Amortization and depreciation 360,582 352,429
Amortization of debt issuance costs 103,598 120,000
Amortization of discount on convertible notes 2,145,010 3,807,320
Amortization of discount on related party notes 523,614  
Gain on settlement of accounts payable   (183,944)
Loss on the sale of fixed asset 583  
Change in fair value of derivative liability 838,643  
Inducement interest expense 1,526,254 193,160
Stock-based compensation 631,302 928,413
Changes in current assets and liabilities:    
Decrease (increase) in prepaid expenses (498,928) (348,972)
Increase (decrease) in accounts payable, accrued salaries and severance, accrued license fees, accrued interest and accrued liabilities 7,440,554 176,064
Net cash used in operating activities (12,016,858) (7,386,943)
Cash flows from investing activities:    
Furniture and equipment purchases (18,585) (19,220)
Net cash used in investing activities (18,585) (19,220)
Cash flows from financing activities:    
Payments on indebtedness to related parties   (500,000)
Payments on convertible notes payable   (500,000)
Payments of debt issuance costs (423,104) (120,000)
Payments of offering costs   (2,084,063)
Proceeds from sale of common stock   13,642,667
Proceeds from issuance of convertible notes payable 7,481,050 1,200,000
Proceeds from exercise of warrants 1,141,435 50,000
Net cash provided by financing activities 8,199,381 11,688,604
Net change in cash (3,836,062) 4,282,441
Cash, beginning of period 4,886,122 603,681
Cash, end of period 1,050,060 4,886,122
Cash paid during the period for:    
Income taxes 3,142  
Interest 203,864 311,991
Non-cash investing and financing transactions:    
Common stock issued upon conversion of convertible debt 4,221,250 2,459,000
Common stock issued or to be issued for accrued interest payable 138,373 58,518
Original issue discount and intrinsic value of beneficial conversion feature related to debt issued with warrants   1,200,000
Preferred and common stock subject to rescission liability 378,000 158,500
Amortization of deferred offering costs related to rescission liability 68,292 28,638
Accounts payable extinguished through settlements   $ 183,944
Original issue discount related to valuation of compound embedded derivative of convertible note payable issued with anti-dilution feature 1,170,264  
Original issue discount related to valuation of relative fair value of warrants issued with convertible notes payable $ 2,220,143  
Warrants issued for debt discount on convertible notes payable 285,118