Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

v3.24.3
Notes Payable
3 Months Ended
Aug. 31, 2024
Notes Payable [Line Items]  
Debt Disclosure [Text Block]

Note 12: Notes Payable

 

   

August 31, 2024

   

May 31, 2024

 

Debenture 2

Debenture in the principal amount of $250,000 (the “Debenture 2”) dated December 21, 2021, which bears interest, payable quarterly commencing six months after issuance, at a rate of 15% per annum. Principal on Debenture 2 is due in two equal installments 18 months after issuance and at maturity on July 10, 2024. With the Debenture, the purchaser received warrants to purchase 75,758 shares of common stock at an exercise price of $1.65 per share of common stock. The Company shall make additional quarterly payments under Debenture 2 beginning 90 days after the end of its first fiscal quarter after January 10, 2025, and for the next five years, on an annual basis, equal to the greater of (a) 15% of the original principal amount, or (b) the purchaser’s pro rata portion of 5% of the distributions the Company receives as a result of the Quinn River Joint Venture during the prior fiscal year. The Company recorded a discount in the amount of $10,428 on Debenture 2.

 

On May 31, 2023, the Debenture 2 was amended as follows: (1) the first payment of principal and interest on June 30, 2023, followed by quarterly payment of principal and interest on September 30, 2023, beginning October 31, 2023, the Company is required to pay the note holder principal and Interest monthly through the maturity date.

 

On December 31, 2023, the Debenture 2 was amended as follows: The original issue discount in the amount of $187,000 was reduced to $37,500. A gain on extinguishment of debt in the amount of $111,807 was recognized in connection with this transaction, and a discount in the amount of $6,501 was recorded.

 

During the three months ended August 31, 2024, the Company amortized discounts on the Debenture 2 in the aggregate amount of $197. During the three months ended August 31, 2024, the Company made principal and interest payments in the amount of $17,917 and $130, respectively, on Debenture 2.  As of August 31, 2024, Debenture 2 has been paid in full.

    -       17,917  
                 

Debenture 6

Debenture in the principal amount of $500,000 (the “Debenture 6”) dated January 4, 2022, which bears interest, payable quarterly commencing nine months after issuance, at a rate of 15% per annum. Principal on Debenture 6 is due in two equal installments 18 months after issuance and at maturity on July 10, 2024. With the Debenture, the purchaser received warrants to purchase 151,516 shares of common stock at an exercise price of $1.65 per share of common stock. The Company shall make additional quarterly payments under Debenture 6 beginning 90 days after the end of its first fiscal quarter after January 10, 2025, and for the next five years, on an annual basis, equal to the greater of (a) 15% of the original principal amount, or (b) the purchaser’s pro rata portion of 5% of the distributions the Company receives as a result of the Quinn River Joint Venture during the prior fiscal year. The Company recorded a discount in the amount of $17,154 on Debenture 6. The Company recorded an original issue discount in the amount of $375,000 on Debenture 6.

 

On May 31, 2023, the Debenture 6 was amended as follows: (1) the maturity date was extended to October 31, 2024; (2) the first payment of principal and interest on June 30, 2023, followed by quarterly payment of principal and interest on September 30, 2023, beginning October 31, 2023, the Company is required to pay the note holder principal and interest monthly through the maturity date.

 

On December 31, 2023, the Debenture 6 was amended as follows: The original issue discount in the amount of $375,000 was reduced to $75,000. A gain on extinguishment of debt in the amount of $402,370 was recognized in connection with this transaction, and a discount in the amount of $209,783 was recorded.

 

During the three months ended August 31, 2024, the Company amortized discounts in the amount of $10,297 on Debenture 6 During the three months ended August 31, 2024, the Company capitalized interest in the amount of $10,707 on Debenture 6.

    511,340       500,632  
                 

Promissory Note 6 (PN 6)

PN6 in the principal amount of $250,000 (the “PN6”) dated February 22, 2024, which bears interest a rate of 12% per annum. Principal and interest payments are due monthly for 24 months in the amount $11,799 beginning March 31, 2024. During the three months ended August 31, 2024, the Company made principal and interest payments in the amount of $29,012 and $6,387, respectively, on PN6.

    193,490       222,502  

Notes Payable

  $ 704,830     $ 741,052  

Less: Discount

    (183,459 )     (193,756 )

Notes Payable, Net of Discount

  $ 521,371     $ 547,296  

 

   

August 31, 2024

   

May 31, 2024

 

Total Notes Payable, Current Portion

  $ 125,107     $ 139,345  

Total Notes Payable, Long-term Portion, net of discount

  $ 396,264     $ 407,951  
Related Party [Member]  
Notes Payable [Line Items]  
Debt Disclosure [Text Block]

Note 14: Notes Payable Related Party

 

   

August 31, 2024

   

May 31, 2024

 

Promissory Note 1 (APN1)

PN1 Debenture in the principal amount of $475,000 (the “PN1”) dated January 2, 2024, which bears interest at a rate of 12% per annum. Principal and interest payments are due monthly for 36 months in the amount $15,917 beginning February 29, 2024. During the three months ended August 31, 2024, the Company made principal and interest payments on the PN1 in the amount of $35,079 and $12,673, respectively.

  $ 398,982     $ 434,061  
                 

Promissory Note 2 (PN2)

PN2 in the principal amount of $465,000 (the “PN2”) dated January 2, 2024, which bears interest a rate of 12% per annum. Principal and interest payments are due monthly for 36 months in the amount $15,582 beginning February 29, 2024. During the three months ended August 31, 2024, the Company made principal and interest payments on the PN2 in the amount of $34,040 and $12,407, respectively.

    390,583       424,923  
                 

Promissory Note 3 (PN3)

PN3 in the principal amount of $450,000 (the “PN3”) dated February 22, 2024, which bears interest a rate of 12% per annum. Principal and interest payments are due monthly for 24 months in the amount $21,239 beginning March 31, 2024. During the three months ended August 31, 2024, the Company made principal and interest payments on the PN3 in the amount of $52,221 and $11,496, respectively.

    348,282       400,503  
                 

Promissory Note 4 (PN4)

PN4 in the principal amount of $300,000 (the “PN4”) dated February 22, 2024, which bears interest a rate of 12% per annum. Principal and interest payments are due monthly for 24 months in the amount $14,159 beginning March 31, 2024. During the three months ended August 31, 2024, the Company made principal and interest payments on the PN4 in the amount of $34,814 and $7,664, respectively

    232,188       267,002  
                 

Promissory Note 5 (PN5)

PN5 in the principal amount of $350,000 (the “PN5”) dated February 22, 2024, which bears interest a rate of 12% per annum. Principal and interest payments are due monthly for 24 months in the amount $16,519 beginning March 31, 2024. During the three months ended August 31, 2024, the Company made principal and interest payments on the PN5 in the amount of $40,616 and $8,942, respectively.

    270,887       311,503  
                 

Promissory Note 7 (PN7)

PN7 in the principal amount of $100,000 (the “PN7”) dated March 6, 2024, which bears interest a rate of 12% per annum. Interest only payments are due quarterly in the amount of $3,500 for four quarters beginning March 29, 2024. The loan is due on February 28, 2025. During the three months ended August 31, 2024, the Company made principal and interest payments on PN7 in the amount of $0 and $3,500, respectively.

    100,000       100,000  
                 

Promissory Note 8 (PN8)

PN8 in the principal amount of $134,000 (the “PN8”) dated April 30, 2024, which bears interest a rate of 12% per annum. Principal and interest payments are due monthly for 24 months in the amount $6,308 beginning May 31, 2024. During the three months ended August 31, 2024, the Company made principal and interest payments on the PN8 in the amount of $15,204 and $1,340, respectively.

    113,828       129,032  
                 

Promissory Note 9 (PN9)

PN9 in the principal amount of $2,600,000 (the “PN9”) dated August 28, 2024. Principal in the amount of $2,200,000 automatically converted into 56,847,545 shares of the Company’s common stock on August 30,2024; the remaining principal in the amount of $400,000 bears interest at the rate of 12% per annum and is due on August 28, 2025. See note 17. The conversion of the $2,200,000 in principal was at the market price per share of $0.0387 on the date of the note, and no gain or loss was recognized on this transaction. No interest was accrued on this note during the three months ended August 31, 2024.

    400,000       -  
                 

Total

  $ 2,254,750     $ 2,067,023  

 

   

August 31, 2024

   

May 31, 2024

 

Total Notes Payable – Related Party, Current Portion

  $ 1,415,392     $ 988,472  

Total Notes Payable – Related Party, Long Term Portion

  $ 839,358     $ 1,078,551  

 

Aggregate maturities of notes payable, convertible notes payable, and notes payable – related parties as of August 31, 2024 are as follows:

 

For the twelve months ended August 31,

 

2025

  $ 1,845,243  

2026

    1,386,939  

2027

    922,120  

2028

    2,790,759  

Total

  $ 6,945,061