NOTE 15 – LOANS PAYABLE

Leaflink Financing Agreement

The Company is a party to an accounts receivable financing agreement with a lender (the “Short Term Financing Agreement”) for two of its subsidiaries. During the year ended May 31, 2023, the Company received cash proceeds in the amount of $650,115 from additional loans under the Short-Term Financing Agreement, made payments in the amount of $1,738,748, and incurred fees in the amount of $126,948. On April 26, 2023, the Company entered into a settlement agreement with the lender, at the time of the settlement agreement the Company owed $94,175, which included principal, interest and fees associated with the loans. Pursuant to the terms of the settlement agreement, the Company would make a final payment of $42,786, which resulted in a gain on the settlement of $51,389. At May 31, 2023 and 2022, the balance due under the Short Term Financing Agreement was $0 and $1,013,073, respectively.

2022 Financing Agreement CBR

Effective September 30, 2022, we entered into a Business Loan and Security Agreement with CBR Capital LLC to borrow $900,000. The 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 will agree 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 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 is $8,438. At May 31, 2023, and May 31, 2022, the balance due under the CBR Agreement was $385,550 and $0 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 loan is 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 loan agreement. 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. At May 31, 2023 and 2022, the balance due under the TVT Agreement was $85,830 and $0, net of discount, respectively.