Note 12 - Stockholders' Equity |
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| Shareholders' Equity and Share-based Payments [Text Block] |
Note 12 – Stockholders’ Equity
The Company’s authorized capital stock consists of 250,000,000 shares of common stock, par value $0.0001 per share and 20,000,000 shares of preferred stock, par value $0.001 per share. The Company had 43,186,944 and 32,852,944 shares of common stock issued and outstanding as of February 28, 2018 and May 31, 2017, respectively.
The Company recorded imputed interest of $265 and $265 during the three months ended February 28, 2018 and 2017 on related party payables due to a director and officer of the Company. The Company recorded imputed interest of $804 and $804 during the nine months ended February 28, 2018 and 2017 on related party payables due to a director and officer of the Company.
During the three months ended February 28, 2017, Old Main, holder of convertible promissory notes, converted an aggregate of $100,000 of principal, in six transactions, into 828,173 shares of common stock. As a result of the conversions, the Company charged the amount $222,574 to additional paid-in capital.
Stock Issued for Services
On July 13, 2017, the Company issued 24,000 shares of common stock to a consultant in exchange for a $6,000 accrued liability for services previously provided. This resulted in a gain on the settlement of accounts payable in the amount of $3,480.
Stock Issued for Note Exchange
On September 20, 2017, the Company entered into an Exchange Agreement, whereby it agreed to exchange the April 2015 Note for 1,500,000 shares of its common stock valued at $510,000. The holder of the April 2015 Note had previously sold it for $105,219, which represented the balance due by the Company, to StarForce Media, Inc., an entity that is not affiliated with the Company. The Company recognized a loss on this exchange in the amount of $404,082, which was charged to operations during the nine months ended February 28, 2018.
On September 25, 2017, the Company entered into an Exchange Agreement, whereby it agreed to exchange the 8% Note for 4,500,000 shares of its common stock valued at $1,844,035. The Company recognized a loss on this exchange in the amount of $989,032, which was charged to operations during the nine months ended February 28, 2018.
Stock Issued with Note
On November 15, 2017, the Company issued 250,000 shares of restricted Common Stock, valued at $95,000, as a commitment fee to a convertible note holder.
Stock Issued in Offering
On December 7, 2017, the Company commenced a private offering of its securities, the terms of which were amended on January 17, 2018 (the “WestPark Offering”). The Company offered for sale a minimum of 800,000 units and a maximum of 4,000,000 units at a price of $1.25 per unit. Each unit consisted of four shares of common stock and one warrant to purchase common stock at $0.75 per share.
On February 7, 2018, the Company received gross proceeds of $1,087,500 from the WestPark Offering, of which $146,975 were expenses, resulting in net proceeds of $940,525, from the sale of units. This resulted in the issuance of 3,480,000 shares of common stock and 870,000 warrants to purchase common stock at a price of $0.75.
On February 21, 2018, the Company received additional gross proceeds of $100,000 from the WestPark Offering, of which $28,100 were expenses, resulting in net proceeds of $71,900, from the sale of units. This resulted in the issuance of 320,000 shares of common stock and 80,000 warrants to purchase common stock at a price of $0.75.
On February 28, 2018, the Company received additional gross proceeds of $81,250 from the WestPark Offering, of which $12,148 were expenses, resulting in net proceeds of $69,102, from the sale of units. This resulted in the issuance of 260,000 shares of common stock and 65,000 warrants to purchase common stock at a price of $0.75. At February 28, 2018, the net proceeds of this sale had not yet been received by the Company, and the amount of $69,102 is recorded as common stock subscriptions receivable on the Company’s balance sheet.
Warrants
On November 15, 2017, in connection with the Company’s sale of a convertible debenture, the Company issued FirstFire Global Opportunities Fund, LLC (“FirstFire”) a three-year common stock purchase warrant to purchase 350,000 shares of the Company’s common stock at an initial exercise price of $0.75 per share. These warrants were valued at $123,950 and were charged to operations during the nine months ended February 28, 2018.
On February 9, 2018, in connection with the Company’s sale of a convertible debenture, the Company issued Darling Capital (“Darling”) a three-year common stock purchase warrant to purchase 400,000 shares of the Company’s common stock at an initial exercise price of $0.75 per share. These warrants were valued at $313,128 and were charged to operations during the nine months ended February 28, 2018.
On February 16, 2018, in connection with the Company’s sale of a convertible debenture, the Company issued Efrat Investments (“Efrat”) a three-year common stock purchase warrant to purchase 40,000 shares of the Company’s common stock at an initial exercise price of $0.75 per share. These warrants were valued at $32,076 and were charged to operations during the nine months ended February 28, 2018.
On February 26, 2018, in connection with the Company’s sale of a convertible debenture, the Company issued David Lamadrid a three-year common stock purchase warrant to purchase 25,000 shares of the Company’s common stock at an initial exercise price of $0.75 per share. These warrants were valued at $18,974 and were charged to operations during the nine months ended February 28, 2018.
On February 7, 2018, the Company issued three-year common stock purchase warrants to purchase an aggregate of 870,000 shares of the Company’s common stock at an exercise price of $0.75 per share, to investors in the WestPark Offering.
On February 21, 2018, the Company issued three-year common stock purchase warrants to purchase an aggregate of 80,000 shares of the Company’s common stock at an exercise price of $0.75 per share, to investors in the WestPark Offering.
On February 28, 2018, the Company issued three-year common stock purchase warrants to purchase an aggregate of 65,000 shares of the Company’s common stock at an exercise price of $0.75 per share, to investors in the WestPark Offering.
As of February 28, 2018, the Company was obligated to issue a five-year warrant to purchase 152,250 of the Company’s units at an exercise price of $1.25 per unit to WestPark Capital, Inc., the placement agent for the WestPark Offering. Each unit consists of four shares of common stock and one warrant to purchase a share of common stock for $0.75 per share. This warrant is part of the placement agent’s compensation pursuant to the placement agent agreement. This warrant was valued at $610,414, which amount was charged to operations during the nine months ended February 28, 2018.
The following table summarizes the significant terms of warrants outstanding at February 28, 2018. These warrants were granted as part of financing agreements:
Transactions involving warrants are summarized as follows:
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