| Reconciliation of Federal Statutory Income Tax |
Reconciliation of the federal statutory income tax rate of 21% for the year ended May 31, 2020, the federal statutory blended rate of 21% for the year ended May 31, 2019 and the federal statutory rate of 28.6% for the year ended May 31, 2018, to the effective income tax rate is as follows for all periods presented:
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2020 |
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2019 |
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2018 |
|
Income tax provision at statutory rate: |
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21.0 |
% |
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|
21.0 |
% |
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28.6 |
% |
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— |
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— |
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— |
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— |
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— |
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(34.8 |
) |
Loss on debt extinguishment |
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— |
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(0.5 |
) |
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— |
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|
(1.6 |
) |
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0.6 |
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|
1.0 |
|
Valuation allowance release from asset acquisition |
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— |
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4.8 |
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— |
|
Non-deductible debt issuance costs |
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(0.1 |
) |
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— |
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(0.2 |
) |
Non-deductible interest on convertible notes |
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(1.2 |
) |
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(0.3 |
) |
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(0.1 |
) |
Inducement interest expense |
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(1.3 |
) |
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(0.1 |
) |
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(2.0 |
) |
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(0.3 |
) |
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— |
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(1.1 |
) |
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— |
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— |
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(0.1 |
) |
Current year credits generated |
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— |
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— |
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4.4 |
|
Credit carry forward generated (released) |
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(0.1 |
) |
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(3.8 |
) |
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4.1 |
|
Non-deductible debt discount amortization |
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(0.3 |
) |
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— |
|
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— |
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(2.4 |
) |
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— |
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— |
|
Stock compensation in excess of ASC 718 |
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3.2 |
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— |
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— |
|
Non-deductible legal settlement expense |
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(3.8 |
) |
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— |
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— |
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(13.1 |
) |
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(16.9 |
) |
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0.3 |
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Effective income tax rate |
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0.0% |
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4.8% |
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0.0% |
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| Net Deferred Tax Assets and Liabilities |
Net deferred tax assets and liabilities are comprised of the following as of May 31, 2020 and 2019:
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2020 |
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2019 |
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Deferred tax asset (liability) non-current:
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$ |
55,624,018 |
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$ |
39,996,561 |
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2,062,692 |
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2,062,692 |
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4,069,035 |
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3,628,085 |
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Charitable contribution—carry forward |
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— |
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— |
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Accrued vacation & payroll |
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111,514 |
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— |
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(429 |
) |
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— |
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349,384 |
|
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251,293 |
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|
|
|
(454 |
) |
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(340 |
) |
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372,877 |
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329,360 |
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|
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— |
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|
(308,621 |
) |
Basis difference in acquired assets |
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(2,483,097 |
) |
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(2,826,919 |
) |
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|
(60,105,540 |
) |
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(43,132,111 |
) |
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Deferred tax asset (liability) non-current
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$ |
— |
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$ |
— |
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Noncurrent asset (liabilities) |
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60,105,540 |
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|
43,132,111 |
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|
(60,105,540 |
) |
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(43,132,111 |
) |
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Deferred tax asset (liability) non-current
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$ |
— |
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$ |
— |
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