Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 12 Months Ended
May 31, 2019
May 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income (loss) $ (27,619,057) $ (9,577,484)
Adjustments to reconcile net loss to net cash used in operating activities:    
Imputed interest 807 1,076
Excess derivative 0 1,940,439
Change in fair value of derivative 0 195,725
Loss on modification of debt 0 29,145
Stock-based compensation 0 794,607
Warrants issued to placement agent 3,783,130 503,655
Loss on Note exchange 0 404,082
Loss on extinguishment of debt 0 989,032
(Gain) loss on note exchange 0 (3,480)
Prepayment Penalty 0 137,000
Revaluation of contingent liability 321,889 0
Amortization of debt discounts 3,576,161 2,534,103
Warrants and Special Warrants issued to penalty 8,084,522 0
Units issued to placement agent 557,335 0
Non-cash offering costs of equity financing 403,588 0
Fair value of shares vested by officers 454,324 0
Fair value of shares issued to consultants 490,000 0
Fair value of shares issued in settlement 47,500 0
Depreciation and amortization expense 288,351 1,322
Expense from derivative triggering event 12,659 0
Changes in assets and liabilities:    
Other assets 0 50,000
Accounts payable and accrued expenses (484,609) 300,421
Accrued compensation (120,417) 216,667
Accrued interest, related party (362) 96,211
Deferred rent 1,667 (49,565)
Accrued interest 995,941 11,746
Accounts receivable (128,134) 0
Interest receivable (178,258) 0
Inventory (340,880) 0
Prepaid expenses (292,769) 0
Due to related parties (17,930) 0
Net cash used in operating activities (10,164,542) (1,425,298)
CASH FLOWS FROM INVESTING ACTIVITIES    
Payments to purchase property, plant and equipment (1,037,262) 0
Payments to acquire note receivable (5,150,000) 0
Payment for investment in Alternative Solutions (5,982,710) (2,050,000)
Net cash used in investing activities (12,169,972) (2,050,000)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from related party convertible notes payable 0 761,829
Proceeds from notes payable 0 410,000
Proceeds from convertible note payable 18,369,000 1,655,000
Principal payments on notes payable (1,060,000) (100,000)
Principal payments on related party notes payable (137) (237,794)
Principal payments on convertible notes payable (37,500) (500,000)
Proceeds from sale of equity 15,535,978 1,460,917
Net cash provided by financing activities 32,807,341 3,449,952
Net increase in cash and cash equivalents 10,472,827 (25,346)
Cash and cash equivalents at beginning of period 52,964 78,310
Cash and cash equivalents at end of period 10,525,791 52,964
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Interest paid 8,964 0
Income taxes paid 0 0
NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Convertible note issued for unpaid accrued salary 75,000 150,000
Beneficial conversion feature on convertible notes 5,888,707 1,758,741
Note payable exchanged for common stock 1,295,690 0
Charge to paid-in capital for par value of shares issued in cashless exercise of warrants 3,362 0
Reclassify derivative liability to paid-in capital upon adoption of ASU 2017-11 1,265,751 0
Shares issued for services from stock payable 25,313 0
Discount on notes due to derivatives 5,888,707 1,758,741
Related party notes payable reclassified as related party convertible notes payable 0 1,116,856
Common stock issued for conversion of related party notes payable 0 2,023,666
Common stock issued for conversion of convertible notes payable 1,295,690 1,618,446
Shares issued for settlement of accounts payable 0 6,000
Settlement of derivative liability 0 442,775
Common stock issued for services, previously accrued 17,500 0
Accrued interest capitalized to principal of notes payable 491,230 0
Non-Related Party Debt [Member]    
NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Common stock issued for conversion of convertible notes payable $ 0 $ 2,554,924