| Summary of the impact by financial statement line item of the corrections |
During the preparation of the quarterly financial statements as of and for the period ended November 30, 2021, the Company identified an error in how non-cash inducement interest expense was calculated in previous reporting periods dating back to fiscal year 2018. The original inducement expense model was designed to calculate non-cash inducement interest expense specific to inducements that modified the warrant term (e.g., extension of the term or modification of exercise price) without settling the instrument. However, starting in fiscal year 2018, inducements were primarily structured to result in a settlement of the warrant, not merely a modification of a warrant that would remain outstanding for some period. The error was identified when the model started to calculate a gain on substantially all inducements, which was inconsistent with the economics of the arrangements. The error resulted in an understatement of non-cash inducement interest expense and additional paid-in capital.
The Company assessed the materiality of the misstatement in accordance with Accounting Standards Codification (“ASC”) 250, Accounting Changes and Error Corrections, as well as SEC Staff Accounting Bulletins No. 99, Materiality, and No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and concluded that the misstatement was not material to the Company’s consolidated financial position for the prior periods and, accordingly, that amendments of previously filed reports were not required. However, the Company determined that the impact of the corrections would be too significant to record in the quarter ended November 30, 2021. As such, the revisions for the correction are reflected in the accompanying balance sheet as of May 31, 2021, the statements of operations for the six months ended November 30, 2021 and the three and six months ended November 30, 2020, changes in stockholders’ (deficit) equity for the three months ended August 31, 2021 and 2020 and November 30, 2020, and cash flows for the six months ended November 30, 2021 and 2020. Financial reporting periods that are affected but not presented herein will be revised, as applicable, in future
periods and filings. The errors had no impact on operating loss, cash, net cash used in or provided by operating, financing, and investing activities, assets, liabilities, commitments and contingencies, total stockholders’ (deficit) equity, number of shares issued and outstanding, basic and diluted weighted average common shares outstanding, and number of shares available for future issuance for any period presented.
The following tables present a summary of the impact by financial statement line item of the corrections:
|
|
|
|
|
|
|
|
|
|
As of and For the Year Ended May 31, 2019 |
(in thousands) |
As Previously Reported |
|
Adjustments |
|
As Revised |
Inducement interest expense |
$ |
(196) |
|
$ |
(4,532) |
|
$ |
(4,728) |
Total interest expense |
$ |
(3,313) |
|
$ |
(4,532) |
|
$ |
(7,845) |
Loss before income taxes |
$ |
(59,014) |
|
$ |
(4,532) |
|
$ |
(63,546) |
Income tax benefit |
$ |
2,827 |
|
$ |
— |
|
$ |
2,827 |
Net loss |
$ |
(56,187) |
|
$ |
(4,532) |
|
$ |
(60,719) |
Basic and diluted loss per share |
$ |
(0.21) |
|
$ |
(0.02) |
|
$ |
(0.23) |
Additional paid-in capital (1) |
$ |
220,120 |
|
$ |
5,057 |
|
$ |
225,177 |
Accumulated (deficit) (1) |
$ |
(229,363) |
|
$ |
(5,057) |
|
$ |
(234,420) |
(1) Includes adjustment of $525 for the fiscal year ended May 31, 2018. |
|
|
|
|
|
|
|
|
|
|
As of and For the Year Ended May 31, 2020 |
(in thousands, except per share amount) |
As Previously Reported |
|
Adjustments |
|
As Revised |
Inducement interest expense |
$ |
(7,904) |
|
$ |
(15,533) |
|
$ |
(23,437) |
Total interest expense |
$ |
(18,219) |
|
$ |
(15,533) |
|
$ |
(33,752) |
Loss before income taxes |
$ |
(124,403) |
|
$ |
(15,533) |
|
$ |
(139,936) |
Net loss |
$ |
(124,403) |
|
$ |
(15,533) |
|
$ |
(139,936) |
Basic and diluted loss per share |
$ |
(0.30) |
|
$ |
(0.04) |
|
$ |
(0.34) |
Additional paid-in capital (1) |
$ |
351,711 |
|
$ |
20,590 |
|
$ |
372,301 |
Accumulated (deficit) (1) |
$ |
(354,711) |
|
$ |
(20,590) |
|
$ |
(375,301) |
(1) Includes adjustments of $4,532 and $525 for the fiscal years ended May 31, 2019 and 2018, respectively. |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended November 30, 2020 |
|
|
Six months ended November 30, 2020 |
(in thousands, except per share amount) |
As Previously Reported |
|
Adjustments |
|
As Revised |
|
|
As Previously Reported |
|
Adjustments |
|
As Revised |
Inducement interest expense |
$ |
(3,758) |
|
$ |
(459) |
|
$ |
(4,217) |
|
|
$ |
(7,103) |
|
$ |
(459) |
|
$ |
(7,562) |
Total interest expense |
$ |
(6,294) |
|
$ |
(459) |
|
$ |
(6,753) |
|
|
$ |
(11,454) |
|
$ |
(459) |
|
$ |
(11,913) |
Loss before income taxes |
$ |
(34,966) |
|
$ |
(459) |
|
$ |
(35,425) |
|
|
$ |
(65,798) |
|
$ |
(459) |
|
$ |
(66,257) |
Net loss |
$ |
(34,966) |
|
$ |
(459) |
|
$ |
(35,425) |
|
|
$ |
(65,798) |
|
$ |
(459) |
|
$ |
(66,257) |
Basic and diluted loss per share |
$ |
(0.06) |
|
$ |
— |
|
$ |
(0.06) |
|
|
$ |
(0.12) |
|
$ |
— |
|
$ |
(0.12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended February 28, 2021 |
|
|
Nine months ended February 28, 2021 |
(in thousands, except per share amount) |
As Previously Reported |
|
Adjustments |
|
As Revised |
|
|
As Previously Reported |
|
Adjustments |
|
As Revised |
Inducement interest expense |
$ |
(4,139) |
|
$ |
(1,221) |
|
$ |
(5,360) |
|
|
$ |
(11,242) |
|
$ |
(1,680) |
|
$ |
(12,922) |
Total interest expense |
$ |
(5,576) |
|
$ |
(1,221) |
|
$ |
(6,797) |
|
|
$ |
(17,031) |
|
$ |
(1,680) |
|
$ |
(18,711) |
Loss before income taxes |
$ |
(43,985) |
|
$ |
(1,221) |
|
$ |
(45,206) |
|
|
$ |
(109,783) |
|
$ |
(1,680) |
|
$ |
(111,463) |
Net loss |
$ |
(43,985) |
|
$ |
(1,221) |
|
$ |
(45,206) |
|
|
$ |
(109,783) |
|
$ |
(1,680) |
|
$ |
(111,463) |
Basic and diluted loss per share |
$ |
(0.08) |
|
$ |
— |
|
$ |
(0.08) |
|
|
$ |
(0.18) |
|
$ |
— |
|
$ |
(0.18) |
|
|
|
|
|
|
|
|
|
|
As of and For the Year Ended May 31, 2021 |
(in thousands, except per share amount) |
As Previously Reported |
|
Adjustments |
|
As Revised |
Inducement interest expense |
$ |
(11,366) |
|
$ |
(2,556) |
|
$ |
(13,922) |
Total interest expense |
$ |
(19,556) |
|
$ |
(2,556) |
|
$ |
(22,112) |
Loss before income taxes |
$ |
(154,674) |
|
$ |
(2,556) |
|
$ |
(157,230) |
Net loss |
$ |
(154,674) |
|
$ |
(2,556) |
|
$ |
(157,230) |
Basic and diluted loss per share |
$ |
(0.27) |
|
$ |
— |
|
$ |
(0.27) |
Additional paid-in capital (1) |
$ |
489,650 |
|
$ |
23,146 |
|
$ |
512,796 |
Accumulated (deficit) (1) |
$ |
(511,294) |
|
$ |
(23,146) |
|
$ |
(534,440) |
(1) Includes adjustments of $15,533, $4,532, and $525 for the fiscal years ended May 31, 2020, 2019 and 2018, respectively. |
|
|
|
|
|
|
|
|
|
|
As of and For the Three months ended August 31, 2021 |
(in thousands, except per share amount) |
As Previously Reported |
|
Adjustments |
|
As Revised |
Inducement interest expense |
$ |
(9) |
|
$ |
(519) |
|
$ |
(528) |
Total interest expense |
$ |
(2,710) |
|
$ |
(519) |
|
$ |
(3,229) |
Loss before income taxes |
$ |
(30,939) |
|
$ |
(519) |
|
$ |
(31,458) |
Net loss |
$ |
(30,939) |
|
$ |
(519) |
|
$ |
(31,458) |
Basic and diluted loss per share |
$ |
(0.05) |
|
$ |
— |
|
$ |
(0.05) |
Additional paid-in capital |
$ |
516,816 |
|
$ |
23,665 |
|
$ |
540,481 |
Accumulated (deficit) |
$ |
(542,653) |
|
$ |
(23,665) |
|
$ |
(566,318) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Previously Reported |
|
Adjustments |
|
As Revised |
(in thousands) |
Additional paid-in capital |
|
Accumulated (deficit) |
|
Total stockholders' (deficit) equity |
|
Additional paid-in capital |
|
Accumulated (deficit) |
|
Total stockholders' (deficit) equity |
|
Additional paid-in capital |
|
Accumulated (deficit) |
|
Total stockholders' (deficit) equity |
First Quarter Fiscal Year Ended May 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inducement interest expense related to private warrant exchange |
$ |
3,345 |
|
$ |
— |
|
$ |
3,345 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
3,345 |
|
$ |
— |
|
$ |
3,345 |
Net Loss August 31, 2020 |
|
— |
|
|
(30,832) |
|
|
(30,832) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(30,832) |
|
|
(30,832) |
Balance August 31, 2020 |
$ |
388,404 |
|
$ |
(386,206) |
|
$ |
2,768 |
|
$ |
20,590 |
|
$ |
(20,590) |
|
$ |
— |
|
$ |
408,994 |
|
$ |
(406,796) |
|
$ |
2,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Fiscal Year Ended May 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inducement interest expense related to private warrant exchange |
$ |
3,758 |
|
$ |
— |
|
$ |
3,758 |
|
$ |
459 |
|
$ |
— |
|
$ |
459 |
|
$ |
4,217 |
|
$ |
— |
|
$ |
4,217 |
Net Loss November 30, 2020 |
|
— |
|
|
(34,966) |
|
|
(34,966) |
|
|
— |
|
|
(459) |
|
|
(459) |
|
|
— |
|
|
(35,425) |
|
|
(35,425) |
Balance November 30, 2020 |
$ |
414,463 |
|
$ |
(421,587) |
|
$ |
(6,534) |
|
$ |
21,049 |
|
$ |
(21,049) |
|
$ |
— |
|
$ |
435,512 |
|
$ |
(442,636) |
|
$ |
(6,534) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter Fiscal Year Ended May 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inducement interest expense related to private warrant exchange |
$ |
4,139 |
|
$ |
— |
|
$ |
4,139 |
|
$ |
1,221 |
|
$ |
— |
|
$ |
1,221 |
|
$ |
5,360 |
|
$ |
— |
|
$ |
5,360 |
Net Loss February 28, 2021 |
|
— |
|
|
(43,985) |
|
|
(43,985) |
|
|
— |
|
|
(1,221) |
|
|
(1,221) |
|
|
— |
|
|
(45,206) |
|
|
(45,206) |
Balance February 28, 2021 |
$ |
449,759 |
|
$ |
(465,983) |
|
$ |
(15,795) |
|
$ |
22,270 |
|
$ |
(22,270) |
|
$ |
— |
|
$ |
472,029 |
|
$ |
(488,253) |
|
$ |
(15,795) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended May 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inducement interest expense related to private warrant exchange |
$ |
11,366 |
|
$ |
— |
|
$ |
11,366 |
|
$ |
2,556 |
|
$ |
— |
|
$ |
2,556 |
|
$ |
13,922 |
|
$ |
— |
|
$ |
13,922 |
Net Loss May 31, 2021 |
|
— |
|
|
(154,674) |
|
|
(154,674) |
|
|
— |
|
|
(2,556) |
|
|
(2,556) |
|
|
— |
|
|
(157,230) |
|
|
(157,230) |
Balance May 31, 2021 |
$ |
489,650 |
|
$ |
(511,294) |
|
$ |
(21,018) |
|
$ |
23,146 |
|
$ |
(23,146) |
|
$ |
— |
|
$ |
512,796 |
|
$ |
(534,440) |
|
$ |
(21,018) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter Fiscal Year Ended May 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inducement interest expense related to private warrant exchange |
$ |
9 |
|
$ |
— |
|
$ |
9 |
|
$ |
519 |
|
$ |
— |
|
$ |
519 |
|
$ |
528 |
|
$ |
— |
|
$ |
528 |
Net Loss August 31, 2021 |
|
— |
|
|
(30,939) |
|
|
(30,939) |
|
|
— |
|
|
(519) |
|
|
(519) |
|
|
— |
|
|
(31,458) |
|
|
(31,458) |
Balance August 31, 2021 |
$ |
516,816 |
|
$ |
(542,653) |
|
$ |
(25,193) |
|
$ |
23,665 |
|
$ |
(23,665) |
|
$ |
— |
|
$ |
540,481 |
|
$ |
(566,318) |
|
$ |
(25,193) |
|