Note 14: Loans Payable

2022 Financing Agreement CBR

Effective September 30, 2022, the Company entered into a Business Loan and Security Agreement with CBR Capital LLC to borrow $900,000 (the “CBR Loan”). The CBR Loan is repayable in 48 weekly installments in the amount of $13,312.50 for weeks 1-8 and $29,287.50 for weeks 9-48. CBR Capital LLC has stated that it is aware of the Canaccord Debentures and the U.S. Convertible Debentures and agreed to subordinate the CBR security interest to these debenture holders.

During the year ended May 31, 2023, the Company received cash proceeds in the amount of $873,000 from the CBR loan agreement. During the year ended May 31, 2023, the Company made payments in the amount of $838,688. Of these payments $506,014 was principal and $332,674 was interest for the year ended May 31, 2023. At the inception of the loan, the Company recorded a discount in the amount of $27,000 related to prepaid fees. During the year ended May 31, 2023, the Company amortized $18,563 of these fees to interest expense, the balance of the discount remaining at May 31, 2023 was $8,438.

During the three months ended February 29, 2024, the Company made payments of principal and interest in the amount of $0 on the CBR Loan. During the nine months ended February 29, 2024, the Company made payments of principal and interest in the amount of $393,986 and $45,327, respectively, on the CBR Loan. Also during the three and nine months ended February 29, 2024, the Company amortized $0 and $8,437, respectively, of prepaid fees to interest expense.

At February 29, 2024 and May 31, 2023, the balance due under the CBR Loan was $0 and $385,550 net of discount, respectively.

2022 Financing Agreement TVT

Effective October 21, 2022, we entered into a Purchase and Sale of Future Receipts Agreement with TVT Business Funding LLC to borrow $200,000 (the “TVT Loan”). The TVT Loan was repayable in 48 weekly installments in the amount of $5,916.67.

During the year ended May 31, 2023, the Company received cash proceeds in the amount of $194,000 from the TVT Loan. During the year ended May 31, 2023, the Company made payments in the amount of $183,417. Of these payments $112,045 was principal and $71,372 was interest for the year ended May 31, 2023. At the inception of the loan, the Company recorded a discount in the amount of $6,000 related to prepaid fees. During the year ended May 31, 2023, the Company amortized $3,875 of these fees to interest expense, the balance of the discount remaining at May 31, 2023 is $2,125.

During the three months ended February 29, 2024, the Company made principal and interest payments in the amount of $0, respectively, on the TVT Loan. During the nine months ended February 29, 2024, the Company made principal and interest payments in the amount of $87,955 and $12,296, respectively, on the TVT Loan. Also during the three and nine months ended February 29, 2024, the Company amortized $0 and $2,126, respectively, of prepaid fees to interest expense.

At February 29, 2024 and May 31, 2023, the balance due under the TVT Loan was $0 and $85,830 net of discount, respectively.