Annual report pursuant to Section 13 and 15(d)

NOTE 9 - RELATED PARTY TRANSACTIONS

v3.7.0.1
NOTE 9 - RELATED PARTY TRANSACTIONS
12 Months Ended
May 31, 2017
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]
NOTE  9 – RELATED PARTY TRANSACTIONS

For the year ended May 31, 2017:

As of May 31, 2017, the Company owed $37,500 to Jeffrey Binder, its President and Chief Executive Officer, for accrued salary. In July 2016, $250,000 was transferred from accrued salary to a convertible promissory note due to Mr. Binder; in February 2017, an additional $112,500 was transferred from accrued salary to a convertible promissory note due to Mr. Binder (see note 10 ).

As of May 31, 2017, the Company had accrued salary due to Michael Abrams, a former officer of the Company, prior to his September 1, 2015 termination, in the amount of $16,250.

As of May 31, 2017, the Company had amounts due to related parties of $17,930, representing expenses paid by officers and directors on behalf of the Company. The Company accrued interest at the rate of 6% per annum on these liabilities, and recorded interest expense on these liabilities in the amounts of $1,075 during the year ended May 31, 2017.  This interest accrual was charged to additional paid-in capital.

On May 31, 2017, the Company entered into the Omnibus Loan Amendment Agreement (the “Omnibus Loan Agreement”) with Jeffrey I. Binder, Frank Koretsky, Newcan Investment Partners LLC and CLS CO 2016, LLC (collectively, the “Insiders”). See note 10. Pursuant to the Omnibus Loan Agreement, effective May 31, 2017, the following amounts of principal and accrued interest were converted to common stock of the Company:

         
Accrued
       
   
Principal
   
Interest
   
# Shares
 
Jeffrey Binder
 
$
442,750
   
$
19,427
     
(1,848,708
)
Frank Koretsky
   
1,485,000
     
130,069
     
(6,460,276
)
Newcan Investment Partners LLC
   
460,000
     
7,747
     
(1,870,988
)
CLS CO 2016 LLC
   
150,000
     
9,247
     
(636,988
)
Total
 
$
2,537,750
   
$
166,490
     
(10,816,960
)

For the year ended May 31, 2016:

As of May 31, 2016, the Company owed $250,000 to Jeffrey Binder, its President and Chief Executive Officer, for accrued salary.

As of May 31, 2016, the Company had accrued salary due to Michael Abrams, a former officer of the Company, prior to his September 1, 2015 termination, in the amount of $16,250.

As of May 31, 2016, the Company had amounts due to related parties of $17,930, representing expenses paid by officers and directors on behalf of the Company. The Company accrued interest at the rate of 6% per annum on these liabilities, and recorded interest expense on these liabilities in the amounts of $1,078 during the year ended May 31, 2016.  This interest accrual was charged to additional paid-in capital.

Related Party Notes Payable

The Company has convertible notes payable and notes payable outstanding to Jeffrey Binder, an officer and director, and to Frank Koretsky, a director (see note 10).