Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.23.4
Stockholders' Equity
 6 Months Ended
Nov. 30, 2023
Stockholders' Equity Note [Abstract]  
Equity [Text Block]

Note 19: Stockholders’ Equity

 

At the Company's annual meeting of stockholders on November 28, 2023, the Company’s shareholders voted to increase the number of shares of authorized common stock from 187,500,000 shares to 350,000,000 shares. At November 30, 2023, the Company’s authorized capital stock consists of 350,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share.

 

On September 15, 2022, the Company effected a reverse stock split of its issued and outstanding common stock (“the “Reverse Split”) at a ratio of 1-for-4, whereby four shares of the Company’s common stock issued and outstanding were exchanged for one share. The number of shares of common stock issued and outstanding immediately before the Reverse Split was 290,070,272; the number of shares outstanding immediately after the reverse split was 72,517,570, a decrease of 217,552,702 shares. All share and per-share information in these financial statements have been adjusted to reflect the effects of the Reverse Split. As a result of the split, an additional 576 shares were issued due to rounding.

 

Common stock transactions for the three months ended November 30, 2023

 

None.

 

Common stock transactions for the three months ended November 30, 2022

 

Common Stock and Warrants Issued upon Conversion of Notes Payable:

 

On September 15, 2022, the Company issued 28,414,149 shares and three-year warrants to acquire 14,207,075 shares of common stock at a price of $0.40 per share as a result of the mandatory conversion provided in the amendments to the Canaccord Debentures. The conversion was for the total amount of $8,098,033, of which $7,965,278 was principal and $132,755 was accrued interest. (See note 15 for details). A loss in the amount of $4,547,660 was recorded in connection with the extinguishment of the Canaccord Debentures. No gain or loss was recorded on the issuance of the shares because the conversion was made pursuant to the terms of the Restructured Canaccord Debenture Agreement.

 

On September 15, 2022, the Company issued 12,051,397 shares and three-year warrants to acquire 6,025,700 shares of common stock at a price of $0.40 per share as a result of the mandatory conversion provided in the amendments to the U.S. Convertible Debenture holders. The conversion was for the total amount of $3,434,647, of which $3,378,342 was principal and $56,305 was accrued interest. (See note 15 for details). A loss in the amount of $2,111,699 was recorded in connection with the extinguishment of the U.S. Convertible Debentures 1 and 2. No gain or loss was recorded on the issuance of the shares because the conversion was made pursuant to the terms of the Restructured U.S. Convertible Debentures 1 and 2 Agreements.

 

Other Warrant Transactions

 

From December 1, 2021, through January 4, 2022, the Company issued $2,500,000 in debentures and issued 757,576 warrants in connection with these debentures. Each warrant allows the holder to purchase one share of the Company’s common stock at an exercise price of $1.65 per share for three years after its date of issuance.

 

On September 15, 2022, the Company amended $18,846,721 in outstanding debentures to reduce the conversion price of the debentures from $1.20 per unit to $0.40 per unit, increasing the warrants issuable upon conversion of such debentures from 3,400,652 to 6,801,298. As amended, each warrants issuable pursuant to the conversion of such debentures is exercisable for one share of the Company’s common stock at a price of $0.40 per share.

 

The following table summarizes the significant terms of warrants outstanding at November 30, 2023. This table does not include the unit warrants. See Unit Warrants section below.

 

Range of

exercise

Prices

    

Number of

warrants

Outstanding

    

Weighted

average

remaining

contractual

life (years)

    

Weighted

average

exercise

price of

outstanding

Warrants

    

Number of

warrants

Exercisable

    

Weighted

average

exercise

price of

exercisable

Warrants

  
                                             
$ 0.40       20,232,775       1.79     $ 0.40       20,232,775     $ 0.40  
$ 1.60       191,094       1.79     $ 1.60       191,094     $ 1.60  
$ 1.65       757,580       1.08     $ 1.65       757,580     $ 1.65  
          21,181,449       1.77     $ 0.46       21,181,449     $ 0.46  

 

Transactions involving warrants are summarized as follows. This table does not include the unit warrants. See Unit Warrants section below.

 

   

Number of

Shares

    

Weighted Average

Exercise Price

  

Warrants outstanding at May 31, 2022

     1,729,924     $ 1.98  

Granted

     20,232,775     $ 0.40  

Exercised

     -     $ -  

Cancelled / Expired

     (781,250

)

   $ 0.60  

Warrants outstanding at May 31, 2023

     21,181,449     $ 0.46  

Granted

     -     $ -  

Exercised

     -     $ -  

Cancelled / Expired

     -     $ -  

Warrants outstanding at November 30, 2023

     21,181,449     $ 0.46  

 

Unit Warrants

 

In February and March 2018, in connection with the Westpark offering, the Company issued five-year warrants to purchase 51,310 of the Company’s units at an exercise price of $5.00 per unit. Each unit consists of four shares of common stock and one warrant to purchase a share of common stock for $3.00. These warrants expired in March of 2023.

 

Because the unit warrants are exercisable for Common Stock and warrants, they are not included in the warrant tables above.