Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

v3.23.3
Notes Payable
3 Months Ended
Aug. 31, 2023
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

Note 17: Notes Payable

 

   

August 31, 2023

   

May 31, 2023

 

Debenture in the principal amount of $250,000 (the “Debenture 1”) dated December 1, 2021, which bears interest, payable quarterly commencing six months after issuance, at a rate of 15% per annum. Principal on Debenture 1 is due in two equal installments 18 months after issuance and at maturity on July 10, 2024. With the Debenture, the purchaser received warrants to purchase 75,758 shares of common stock at an exercise price of $1.65 per share of common stock. The Company shall make additional quarterly payments under Debenture 1 beginning 90 days after the end of its first fiscal quarter after January 10, 2025, and for the next five years, on an annual basis, equal to the greater of (a) 15% of the original principal amount, or (b) the purchaser’s pro rata portion of 5% of the distributions the Company receives as a result of the Quinn River Joint Venture during the prior fiscal year. The Company recorded a discount in the amount of $17,223 on Debenture 1. During the three months ended August 31, 2023 and 2022, $1,275 and $1,667 of this discount was charged to operations, respectively. The Company recorded an original issue discount in the amount of $187,500 on Debenture 1. During the three months ended August 31, 2023 and 2022, $13,876 and $18,145 of this original issue discount was charged to operations, respectively. During the three months ended August 31, 2023 and 2022, the Company accrued interest in the amounts of $9,375 and $9,375 on Debenture 1, respectively. During the three months ended August 31, 2023 and 2022, the Company made interest payments in the amounts of $9,375 and $22,917, respectively. On May 31, 2023, the Debenture 1 was amended as follows: (1) the maturity date was extended to October 31, 2024; (2) the first payment of principal and interest on June 30, 2023, followed by quarterly payment of principal and interest on September 30, 2023, beginning October 31, 2023, the Company is required to pay the note holder principal and interest monthly through the maturity date.

  $ 250,000     $ 250,000  
                 

Debenture in the principal amount of $250,000 (the “Debenture 2”) dated December 21, 2021, which bears interest, payable quarterly commencing six months after issuance, at a rate of 15% per annum. Principal on Debenture 2 is due in two equal installments 18 months after issuance and at maturity on July 10, 2024. With the Debenture, the purchaser received warrants to purchase 75,758 shares of common stock at an exercise price of $1.65 per share of common stock. The Company shall make additional quarterly payments under Debenture 2 beginning 90 days after the end of its first fiscal quarter after January 10, 2025, and for the next five years, on an annual basis, equal to the greater of (a) 15% of the original principal amount, or (b) the purchaser’s pro rata portion of 5% of the distributions the Company receives as a result of the Quinn River Joint Venture during the prior fiscal year. The Company recorded a discount in the amount of $10,428 on Debenture 2. During the three months ended August 31, 2023 and 2022, $1,009 and $1,009 of this discount was charged to operations, respectively. The Company recorded an original issue discount in the amount of $187,500 on Debenture 2. During the three months ended August 31, 2023, $18,145 and $18,145 of this original issue discount was charged to operations, respectively. During the three months ended August 31, 2023 and 2022, the Company accrued interest in the amounts of $6,224 and $9,375 on Debenture 2, respectively. During the three months ended August 31, 2023 and 2022, the Company made interest payments in the amounts of $12,370 and $20,833, respectively. During the three months ended August 31, 2023 and 2022, the Company made principal payments in the amount of $145,833 and $0 on Debenture 2, respectively. On May 31, 2023, the Debenture 2 was amended as follows: (1) the first payment of principal and interest on June 30, 2023, followed by quarterly payment of principal and interest on September 30, 2023, beginning October 31, 2023, the Company is required to pay the note holder principal and Interest monthly through the maturity date.

    104,167       250,000  

 

   

August 31, 2023

   

May 31, 2023

 

Debenture in the principal amount of $500,000 (the “Debenture 3”) dated December 21, 2021, which bears interest, payable quarterly commencing six months after issuance, at a rate of 15% per annum. Principal on Debenture 3 is due in two equal installments 18 months after issuance and at maturity on July 10, 2024. With the Debenture, the purchaser received warrants to purchase 151,516 shares of common stock at an exercise price of $1.65 per share of common stock. The Company shall make additional quarterly payments under Debenture 3 beginning 90 days after the end of its first fiscal quarter after January 10, 2025, and for the next five years, on an annual basis, equal to the greater of (a) 15% of the original principal amount, or (b) the purchaser’s pro rata portion of 5% of the distributions the Company receives as a result of the Quinn River Joint Venture during the prior fiscal year. The Company recorded a discount in the amount of $19,335 on Debenture 3. During the three months ended August 31, 2023 and 2022, $1,541 and $1,871 of this discount was charged to operations, respectively. The Company recorded an original issue discount in the amount of $375,000 on Debenture 3. During the three months ended August 31, 2023 and 2022, $29,886 and $36,290 of this original issue discount was charged to operations, respectively. During the three months ended August 31, 2023 and 2022, the Company accrued interest in the amounts of $18,750 and $18,750 on Debenture 3, respectively. During the three months ended August 31, 2023 and 2022, the Company made interest payments in the amounts of $18,750 and $41,458, respectively. On May 31, 2023, the Debenture 3 was amended as follows: (1) the maturity date was extended to October 31, 2024; (2) the first payment of principal and interest on June 30, 2023, followed by quarterly payment of principal and interest on September 30, 2023, beginning October 31, 2023, the Company is required to pay the note holder principal and interest monthly through the maturity date.

    500,000       500,000  
                 

Debenture in the principal amount of $500,000 (the “Debenture 4”) dated January 4, 2022, which bears interest, payable quarterly commencing six months after issuance, at a rate of 15% per annum. Principal on Debenture 4 is due in two equal installments 18 months after issuance and at maturity on July 10, 2024. With the Debenture, the purchaser received warrants to purchase 151,516 shares of common stock at an exercise price of $1.65 per share of common stock. The Company shall make additional quarterly payments under Debenture 4 beginning 90 days after the end of its first fiscal quarter after January 10, 2025, and for the next five years, on an annual basis, equal to the greater of (a) 15% of the original principal amount, or (b) the purchaser’s pro rata portion of 5% of the distributions the Company receives as a result of the Quinn River Joint Venture during the prior fiscal year. The Company recorded a discount in the amount of $17,154 on Debenture 4. During the three months ended August 31, 2023 and 2022, $1,413 and $1,715 of this discount was charged to operations, respectively. The Company recorded an original issue discount in the amount of $375,000 on Debenture 4. During the three months ended August 31, 2023 and 2022, $30,882 and $37,500 of this original issue discount was charged to operations, respectively. During the three months ended August 31, 2023 and 2022, the Company accrued interest in the amounts of $18,750 and $18,750 on Debenture 4, respectively. During the three months ended August 31, 2023 and 2022, the Company made interest payments in the amounts of $18,750 and $38,750, respectively. On May 31, 2023, the Debenture 4 was amended as follows: (1) the maturity date was extended to October 31, 2024; (2) the first payment of principal and interest on June 30, 2023, followed by quarterly payment of principal and interest on September 30, 2023, beginning October 31, 2023, the Company is required to pay the note holder principal and interest monthly through the maturity date.

    500,000       500,000  
                 

Debenture in the principal amount of $500,000 (the “Debenture 5”) dated January 4, 2022, which bears interest, payable quarterly commencing six months after issuance, at a rate of 15% per annum. Principal on Debenture 5 is due in two equal installments 18 months after issuance and at maturity on July 10, 2024. With the Debenture, the purchaser received warrants to purchase 151,516 shares of common stock at an exercise price of $1.65 per share of common stock. The Company shall make additional quarterly payments under Debenture 5 beginning 90 days after the end of its first fiscal quarter after January 10, 2025, and for the next five years, on an annual basis, equal to the greater of (a) 15% of the original principal amount, or (b) the purchaser’s pro rata portion of 5% of the distributions the Company receives as a result of the Quinn River Joint Venture during the prior fiscal year. The Company recorded a discount in the amount of $17,154 on Debenture 5. During the three months ended August 31, 2023 and 2022, $1,413 and $1,715 of this discount was charged to operations, respectively. The Company recorded an original issue discount in the amount of $375,000 on Debenture 5. During the three months ended August 31, 2023 and 2022, $30,882 and $37,500 of this original issue discount was charged to operations, respectively. During the three months ended August 31, 2023 and 2022, the Company accrued interest in the amounts of $18,750 and $18,750 on Debenture 5, respectively. During the three months ended August 31, 2023 and 2022, the Company made interest payments in the amounts of $18,750 and $38,750, respectively. On May 31, 2023, the Debenture 5 was amended as follows: (1) the maturity date was extended to October 31, 2024; (2) the first payment of principal and interest on June 30, 2023, followed by quarterly payment of principal and interest on September 30, 2023, beginning October 31, 2023, the Company is required to pay the note holder principal and interest monthly through the maturity date.

    500,000       500,000  

 

   

August 31, 2023

   

May 31, 2023

 
                 

Debenture in the principal amount of $500,000 (the “Debenture 6”) dated January 4, 2022, which bears interest, payable quarterly commencing six months after issuance, at a rate of 15% per annum. Principal on Debenture 6 is due in two equal installments 18 months after issuance and at maturity on July 10, 2024. With the Debenture, the purchaser received warrants to purchase 151,516 shares of common stock at an exercise price of $1.65 per share of common stock. The Company shall make additional quarterly payments under Debenture 6 beginning 90 days after the end of its first fiscal quarter after January 10, 2025, and for the next five years, on an annual basis, equal to the greater of (a) 15% of the original principal amount, or (b) the purchaser’s pro rata portion of 5% of the distributions the Company receives as a result of the Quinn River Joint Venture during the prior fiscal year. The Company recorded a discount in the amount of $17,154 on Debenture 6. During the three months ended August 31, 2023 and 2022, $1,413 and $1,715 of this discount was charged to operations, respectively. The Company recorded an original issue discount in the amount of $375,000 on Debenture 6. During the three months ended August 31, 2023 and 2022, $30,882 and $37,500 of this original issue discount was charged to operations, respectively. During the three months ended August 31, 2023 and 2022, the Company accrued interest in the amounts of $18,750 and $18,750 on Debenture 6, respectively. During the three months ended August 31, 2023 and 2022, the Company made interest payments in the amounts of $18,750 and $38,750, respectively. On May 31, 2023, the Debenture 6 was amended as follows: (1) the maturity date was extended to October 31, 2024; (2) the first payment of principal and interest on June 30, 2023, followed by quarterly payment of principal and interest on September 30, 2023, beginning October 31, 2023, the Company is required to pay the note holder principal and interest monthly through the maturity date.

    500,000       500,000  
                 

Total

    2,354,167       2,500,000  

Original Issue Discount

    1,875,000       1,875,000  

Notes Payable, Gross

    4,229,167       4,375,000  

Less: Discount

    (739,621

)

    (902,339

)

Notes Payable, Net of Discount

    3,489,546       3,472,661  

 

   

August 31, 2023

   

May 31, 2023

 

Total – Notes Payable, Net of Discounts, Current Portion

  $ 1,754,168     $ 1,439,584  

Total – Convertible Notes Payable, Net of Discounts

  $ 1,735,378     $ 2,033,077  

 

During the three months ended August 31, 2023 and 2022, the Company amortized discounts to interest expense in the amount of $162,718 and $194,774, respectively.

 

Aggregate maturities of notes payable and convertible notes payable, and convertible notes payable – related parties as of August 31, 2023 are as follows (not including unamortized debt discounts in the amount of $739,621):

 

For the twelve months ended August 31,

 

2024

  $ 5,507,219  

2025

    4,615,550  

2026

    375,000  

2027

    375,000  

2028

    375,000  

Thereafter

    487,500  

Total

  $ 11,735,269