Quarterly report pursuant to Section 13 or 15(d)

Gain on Settlement of Debt

v3.24.4
Gain on Settlement of Debt
6 Months Ended
Nov. 30, 2024
Gain On Settlement Of Debt Abstract  
Gain on Settlement of Debt [Text Block]

Note 18: Gain on Settlement of Debt

 

On August 28, 2024, the Company raised $2,600,000 in cash from the issuance of PN9. See note 13. On August 30, 2024, the Company issued 56,847,545 shares of common stock pursuant to the conversion $2,200,000 of the principal amount of a note payable (see note 15). No gain or loss was recorded on this transaction as the conversion occurred according to the terms of the note.

 

On September 10, 2024, the Company utilized the proceeds of PN9 to settle three notes payable in the aggregate principal amount of $2,868,282 for a cash payment in the amount of $2,600,000. See note 17. In addition, the noteholders returned for cancellation a total of 15,488,901 shares of the Company’s common stock and warrants to purchase 6,177,216 shares of the Company’s common stock. The cancelled shares were valued at the closing price of the Company’s common stock on the date of the cancellation, or $0.044 per share for a total value of $681,510. The warrants were valued at $4,136 using the Black-Sholes valuation model. A gain in the amount of $949,793 was recorded on this transaction.

 

The Company valued the warrants using the Black-Scholes valuation model utilizing the following variables during the six months ended November 30, 2024:

 

   

November 30,

 
   

2024

 

Volatility

    104.68 %

Dividends

  $ -  

Risk-free interest rates

    4.36 %

Expected term (years)

    1.05