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, 2018
May 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income (loss) $ (9,577,484) $ (4,865,724)
Adjustments to reconcile net loss to net cash used in operating activities:    
Imputed interest 1,076 1,075
Excess derivative 1,940,439 0
Change in fair value of derivative 195,725 (310,975)
Gain / loss on modification of debt 29,145 43,334
Loss on modification of debt – related party 0 951,239
Stock-based compensation 794,607 3,250
Warrants issued to placement agent 503,655 0
Note issued as commitment 404,082 0
Loss on extinguishment of debt 989,032 0
(Gain) loss on note exchange (3,480) 0
Prepayment Penalty 137,000 0
Amortization of debt discounts 2,534,103 2,274,519
Depreciation and amortization expense 1,322 1,324
Start-up costs 0 141,739
Changes in assets and liabilities:    
Prepaid expenses 0 5,332
Other assets 50,000 0
Accounts payable and accrued expenses 300,421 238,387
Accrued compensation 216,667 150,000
Accrued interest, related party 96,211 204,364
Deferred rent (49,565) 0
Accrued interest 11,746 (20,169)
Net cash used in operating activities (1,425,298) (1,182,305)
CASH FLOWS FROM INVESTING ACTIVITIES    
Payment for investment in Alternative Solutions (2,050,000) 0
Payment for construction in progress 0 (35,013)
Net cash used in investing activities (2,050,000) (35,013)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from related party convertible notes payable 761,829 150,000
Proceeds from related party notes payable 0 1,447,550
Proceeds from issuance of convertible note 1,655,000 0
Proceeds from notes payable 410,000 0
Principal payments on notes payable (100,000) 0
Principal payments on related party notes payable (237,794) (61,000)
Repayments of convertible notes payable (500,000) (329,166)
Proceeds from sale of equity 1,460,917 0
Net cash provided by financing activities 3,449,952 1,207,384
Net increase in cash and cash equivalents (25,346) (9,934)
Cash and cash equivalents at beginning of period 78,310 88,244
Cash and cash equivalents at end of period 52,964 78,310
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Interest paid 0 53,837
Income taxes paid 0 0
NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Convertible note issued for unpaid accrued salary 150,000 362,500
Discount on convertible notes payable due to derivative 1,758,741 600,564
Related party notes payable reclassified as related party convertible notes payable 1,116,816 849,750
Common stock issued for conversion of related party notes payable 2,023,666 2,704,240
Common stock issued for conversion of notes payable 1,618,446 137,500
Common stock issued for settlement of accounts payable 6,000 0
Settlement of derivative liability 442,775 612,850
Non-Related Party Debt [Member]    
NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Common stock issued for conversion of notes payable $ 2,554,924 $ 137,500