☒ | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Nevada | 45-1352286 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer ☐ | Accelerated filer ☐ |
Non-accelerated filer ☐(Do not check if smaller reporting company) | Smaller reporting company ☒ |
Emerging Growth Company ☐ |
Page | ||
PART I | ||
Item 1. | 4 | |
Item 1A. | 10 | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
PART III | ||
Item 10. | ||
Item 11. | ||
Item 12. | 33 | |
Item 13. | ||
Item 14. | ||
PART IV | ||
Item 15. | ||
Plan Category | Number of shares to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in the first column) | |||||||||
Equity compensation plans approved by security holders | -- | -- | -- | |||||||||
Equity compensation plans not approved by security holders (1) | -- | -- | -- | |||||||||
Total | -- | -- | -- |
(1) | Pursuant to their respective employment agreements, Jeffrey Binder and Alan Bonsett are entitled to receive annual stock options, exercisable at the fair market value of our common stock on the date of grant, in an amount equal to 2% of our annual EBITDA up to $42.5 million and 4% of our annual EBITDA in excess of $42.5 million. Michael Abrams was also entitled to receive stock options upon the same terms, but he is not entitled to any future awards pursuant to the terms of his separation from the Company effective September 1, 2015. We are currently unable to determine the number of shares that could be granted under these plans. |
May 31, | May 31, | May 31, | May 31, | |||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
Current Assets | $ | 94,986 | $ | 240,621 | $ | 79,720 | $ | 94,986 | ||||||||
Current Liabilities | $ | 1,339,444 | $ | 875,696 | $ | 1,826,478 | $ | 1,339,444 | ||||||||
Working Capital (Deficit) | $ | (1,244,458 | ) | $ | (635,075 | ) | $ | (1,746,758 | ) | $ | (1,244,458 | ) |
· | Estimates and assumptions used in valuation of derivative liability: Management utilizes a lattice model to estimate the fair value of derivative liabilities. The model includes subjective assumptions that can materially affect the fair value estimates. |
Page | |
Financial Statements | |
F-1 | |
F-2 | |
F-3 | |
F-4 | |
F-5 | |
F-6 |
/s/ M&K CPAS, PLLC | |
Houston, Texas | |
August 29, 2017 |
May 31, | May 31, | May 31, | May 31, | |||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | $ | 88,244 | $ | 208,821 | $ | 78,310 | $ | 88,244 | ||||||||
Prepaid expenses | 6,742 | 31,800 | 1,410 | 6,742 | ||||||||||||
Total current assets | 94,986 | 240,621 | 79,720 | 94,986 | ||||||||||||
Security deposit | 50,000 | 50,000 | 50,000 | 50,000 | ||||||||||||
Property, plant and equipment, net of accumulated depreciation of $892 and $0 | 1,782 | - | ||||||||||||||
Property, plant and equipment, net of accumulated depreciation of $1,784 and $892 | 890 | 1,782 | ||||||||||||||
Construction in progress | 106,726 | - | - | 106,726 | ||||||||||||
Note receivable related party, noncurrent, net of allowance of $500,000 and $500,000 | - | - | ||||||||||||||
Intangible assets, net of accumulated amortization of $396 and $0 | 1,762 | 2,158 | ||||||||||||||
Intangible assets, net of accumulated amortization of $828 and $396 | 1,330 | 1,762 | ||||||||||||||
Total assets | $ | 255,256 | $ | 292,779 | $ | 131,940 | $ | 255,256 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities | ||||||||||||||||
Accounts payable and accrued liabilities | $ | 431,017 | $ | 145,024 | $ | 581,765 | $ | 432,260 | ||||||||
Accrued compensation, related party | 267,493 | 106,250 | 53,750 | 266,250 | ||||||||||||
Due to related party | 17,930 | 18,455 | 17,930 | 17,930 | ||||||||||||
Accrued interest | 41,116 | 2,630 | 20,171 | 41,116 | ||||||||||||
Accrued interest, related party | 68,148 | 3,337 | 106,022 | 68,148 | ||||||||||||
Convertible notes payable, net of discount of $227,475 and $0 | 72,525 | - | ||||||||||||||
Convertible notes payable, related party, net of discount of $95,447 and $0 | 22,678 | - | ||||||||||||||
Notes payable, related parties | 699,208 | - | ||||||||||||||
Convertible notes payable, net of discount of $57,644 and $227,475 | 252,356 | 72,525 | ||||||||||||||
Convertible notes payable, related party, net of discount of $0 and $95,447 | - | 22,678 | ||||||||||||||
Derivative liability | 418,537 | - | 95,276 | 418,537 | ||||||||||||
Notes payable, related parties | - | 600,000 | ||||||||||||||
Total current liabilities | 1,339,444 | 875,696 | 1,826,478 | 1,339,444 | ||||||||||||
Noncurrent liabilities | ||||||||||||||||
Convertible notes payable, net of discount of $390,021 and $194,444 | 43,312 | 5,556 | ||||||||||||||
Convertible notes payable, related parties, net of discount of $1,018,657 and $0 | 230,718 | - | ||||||||||||||
Convertible notes payable, net of discount of $0 and $390,021 | - | 43,312 | ||||||||||||||
Convertible notes payable, related parties, net of discount of $0 and $1,018,657 | 192,000 | 230,718 | ||||||||||||||
Notes payable, related parties | 72,750 | - | - | 72,750 | ||||||||||||
Total Liabilities | 1,686,224 | 881,252 | 2,018,478 | 1,686,224 | ||||||||||||
Commitments and contingencies | - | - | - | - | ||||||||||||
Stockholder’s equity (deficit) | ||||||||||||||||
Common stock, $0.0001 par value; 250,000,000 shares authorized; 20,350,003 and 20,000,003 shares issued and outstanding at May 31, 2016 and 2015 | 2,035 | 2,000 | ||||||||||||||
Stockholder’s equity | ||||||||||||||||
Common stock, $0.0001 par value; 250,000,000 shares authorized; 32,852,944 and 20,350,003 shares issued and outstanding at May 31, 2017 and May 31, 2016, respectively | 3,286 | 2,035 | ||||||||||||||
Preferred stock, $0.001 par value; 20,000,000 shares authorized; no shares issued | - | - | - | - | ||||||||||||
Additional paid-in capital | 2,627,183 | 887,614 | 7,032,836 | 2,627,183 | ||||||||||||
Stock payable | 65,700 | 37,500 | 68,950 | 65,700 | ||||||||||||
Accumulated deficit | (4,125,886 | ) | (1,515,587 | ) | (8,991,610 | ) | (4,125,886 | ) | ||||||||
Total stockholder’s equity (deficit) | (1,430,968 | ) | (588,473 | ) | (1,886,538 | ) | (1,430,968 | ) | ||||||||
Total liabilities and stockholders’ equity (deficit) | $ | 255,256 | $ | 292,779 | $ | 131,940 | $ | 255,256 |
For the | For the | |||||||||||||||
Year Ended | Year Ended | For the Year | For the Year | |||||||||||||
May 31, | May 31, | Ended May 31, | Ended May 31, | |||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
Revenue | $ | - | $ | - | $ | - | $ | - | ||||||||
Cost of goods sold | - | - | - | - | ||||||||||||
Gross margin | - | - | - | - | ||||||||||||
Selling, general and administrative expenses | 1,314,225 | 998,994 | 718,770 | 1,314,225 | ||||||||||||
Startup costs | 141,739 | - | ||||||||||||||
Professional fees | 955,810 | 504,354 | 750,446 | 955,810 | ||||||||||||
Total operating expenses | 2,270,035 | 1,503,348 | 1,610,955 | 2,270,035 | ||||||||||||
Operating loss | (2,270,035 | ) | (1,503,348 | ) | (1,610,955 | ) | (2,270,035 | ) | ||||||||
Other (income) expense: | ||||||||||||||||
Interest expense | 402,021 | 12,239 | 2,571,171 | 402,021 | ||||||||||||
Loss on modification of related party debt | 951,239 | - | ||||||||||||||
Loss on modification of debt | 43,334 | - | ||||||||||||||
Change in fair value of derivative | (61,757 | ) | - | (310,975 | ) | (61,757 | ) | |||||||||
Total other expense | 340,264 | 12,239 | 3,254,769 | 340,264 | ||||||||||||
Income (Loss) before income taxes | (2,610,299 | ) | (1,515,587 | ) | (4,865,724 | ) | (2,610,299 | ) | ||||||||
Income tax expense | - | - | - | - | ||||||||||||
Net income (loss) | $ | (2,610,299 | ) | $ | (1,515,587 | ) | $ | (4,865,724 | ) | $ | (2,610,299 | ) | ||||
Net income (loss) per share - basic | $ | (0.13 | ) | $ | (0.24 | ) | $ | (0.23 | ) | $ | (0.13 | ) | ||||
Net income (loss) per share - diluted | $ | (0.13 | ) | $ | (0.24 | ) | $ | (0.23 | ) | $ | (0.13 | ) | ||||
Weighted average shares outstanding - basic | 20,146,260 | 6,356,167 | 20,778,785 | 20,146,260 | ||||||||||||
Weighted average shares outstanding - diluted | 20,146,260 | 6,356,167 | 20,778,785 | 20,146,260 |
Additional | ||||||||||||||||||||||||
Common Stock | Paid In | Stock | Accumulated | |||||||||||||||||||||
Amount | Value | Capital | Payable | Deficit | Total | |||||||||||||||||||
Balance at May 31, 2014 | - | - | - | - | - | - | ||||||||||||||||||
Issuance of founders shares | 15,000,000 | 1,500 | 998,500 | - | - | 1,000,000 | ||||||||||||||||||
Effect of reverse merger | 5,000,003 | 500 | (311,602 | ) | - | - | (311,102 | ) | ||||||||||||||||
Imputed interest | - | - | 716 | - | - | 716 | ||||||||||||||||||
Value of vested portion of shares to be issued to a service provider | - | - | - | 37,500 | - | 37,500 | ||||||||||||||||||
Discount on notes payable | - | - | 200,000 | - | - | 200,000 | ||||||||||||||||||
Net loss | - | - | - | - | (1,515,587 | ) | (1,515,587 | ) | ||||||||||||||||
Balance, May 31, 2015 | 20,000,003 | 2,000 | 887,614 | 37,500 | (1,515,587 | ) | (588,473 | ) | ||||||||||||||||
Stock issued for services | 100,000 | 10 | 89,840 | 28,200 | - | 118,050 | ||||||||||||||||||
Share based compensation | 250,000 | 25 | 327,475 | 327,500 | ||||||||||||||||||||
Discount on notes from beneficial conversion feature | - | - | 1,321,176 | - | 1,321,176 | |||||||||||||||||||
Imputed interest | - | - | 1,078 | - | - | 1,078 | ||||||||||||||||||
Net loss | - | - | - | - | (2,610,299 | ) | (2,610,299 | ) | ||||||||||||||||
Balance, May 31, 2016 | 20,350,003 | 2,035 | 2,627,183 | 65,700 | (4,125,886 | ) | (1,430,968 | ) |
Additional | ||||||||||||||||||||||||
Common Stock | Paid In | Stock | Accumulated | |||||||||||||||||||||
Amount | Value | Capital | Payable | Deficit | Total | |||||||||||||||||||
Balance, May 31, 2015 | 20,000,003 | $ | 2,000 | $ | 887,614 | $ | 37,500 | $ | (1,515,587 | ) | $ | (588,473 | ) | |||||||||||
Stock issued for services | 100,000 | 10 | 89,840 | 28,200 | - | 118,050 | ||||||||||||||||||
Share based compensation | 250,000 | 25 | 327,475 | - | - | 327,500 | ||||||||||||||||||
Discount on notes from beneficial conversion feature | - | - | 1,321,176 | - | - | 1,321,176 | ||||||||||||||||||
Imputed interest | - | - | 1,078 | - | - | 1,078 | ||||||||||||||||||
Net loss | - | - | - | - | (2,610,299 | ) | (2,610,299 | ) | ||||||||||||||||
Balance, May 31, 2016 | 20,350,003 | 2,035 | 2,627,183 | 65,700 | (4,125,886 | ) | (1,430,968 | ) | ||||||||||||||||
Settlement of derivative liability | - | - | 612,850 | - | - | 612,850 | ||||||||||||||||||
Common stock issued for conversion of debt | 1,685,981 | 169 | 137,331 | - | - | 137,500 | ||||||||||||||||||
Common stock issued for conversion of related party debt | 10,816,960 | 1,082 | 2,703,158 | - | - | 2,704,240 | ||||||||||||||||||
Common stock payable for services | - | - | - | 3,250 | - | 3,250 | ||||||||||||||||||
Loss on modification of related party debt | - | - | 951,239 | - | - | 951,239 | ||||||||||||||||||
Imputed interest | - | - | 1,075 | - | - | 1,075 | ||||||||||||||||||
Net loss | - | - | - | - | (4,865,724 | ) | (4,865,724 | ) | ||||||||||||||||
Balance, May 31, 2017 | 32,852,944 | $ | 3,286 | $ | 7,032,836 | $ | 68,950 | $ | (8,991,610 | ) | $ | (1,886,538 | ) |
For the | For the | |||||||||||||||
Year Ended | Year Ended | For the Year | For the Year | |||||||||||||
May 31, | May 31, | Ended May 31, | Ended May 31, | |||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||
Net income (loss) | $ | (2,610,299 | ) | $ | (1,515,587 | ) | $ | (4,865,724 | ) | $ | (2,610,299 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Imputed interest | 1,078 | 716 | 1,075 | 1,078 | ||||||||||||
Change in fair value of derivative | (61,757 | ) | - | (310,975 | ) | (61,757 | ) | |||||||||
Interest expense - excess of discount over principal | 11,330 | - | - | 11,330 | ||||||||||||
Loss on modification of debt | 43,334 | - | ||||||||||||||
Loss on modification of debt – related party | 951,239 | - | ||||||||||||||
Issuance of stock for services | 118,050 | - | 3,250 | 118,050 | ||||||||||||
Note issued as commitment | 200,000 | - | - | 200,000 | ||||||||||||
Impairment of note receivable | - | 500,000 | ||||||||||||||
Stock-based compensation | 327,500 | 37,500 | - | 327,500 | ||||||||||||
Amortization of debt discounts | 286,317 | 5,556 | 2,274,519 | 286,317 | ||||||||||||
Depreciation and amortization expense | 1,288 | - | 1,324 | 1,288 | ||||||||||||
Start-up costs | 141,739 | - | ||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Deposits | - | (50,000 | ) | |||||||||||||
Prepaid expenses | 25,058 | (38,955 | ) | 5,332 | 25,058 | |||||||||||
Accounts payable and accrued expenses | 285,993 | 136,327 | 238,387 | 285,993 | ||||||||||||
Accrued compensation | 161,243 | 106,250 | 150,000 | 161,243 | ||||||||||||
Due to related parties | (525 | ) | 18,455 | - | (525 | ) | ||||||||||
Accrued interest, related party | 64,811 | 3,337 | 204,364 | 64,811 | ||||||||||||
Accrued interest | 38,486 | 2,630 | (20,169 | ) | 38,486 | |||||||||||
Net cash used in operating activities | (1,151,427 | ) | (793,771 | ) | (1,182,305 | ) | (1,151,427 | ) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
Payment of cash for note receivable | - | (500,000 | ) | |||||||||||||
Payments to acquire equipment | (2,674 | ) | - | - | (2,674 | ) | ||||||||||
Payment for construction in progress | (106,726 | ) | - | (35,013 | ) | (106,726 | ) | |||||||||
Payments to acquire intangible assets | - | (2,158 | ) | |||||||||||||
Payments for investment in shell company | - | (295,250 | ) | |||||||||||||
Net cash used in investing activities | (109,400 | ) | (797,408 | ) | (35,013 | ) | (109,400 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
Proceeds from sale of common stock | - | 1,000,000 | ||||||||||||||
Proceeds from related party convertible notes payable | 767,500 | - | 150,000 | 767,500 | ||||||||||||
Proceeds from related party notes payable | 72,750 | 600,000 | 1,447,550 | 72,750 | ||||||||||||
Proceeds from issuance of convertible note | 300,000 | 200,000 | - | 300,000 | ||||||||||||
Principal payments on related party notes payable | (61,000 | ) | - | |||||||||||||
Principal payments on notes payable | (329,166 | ) | - | |||||||||||||
Net cash provided by financing activities | 1,140,250 | 1,800,000 | 1,207,384 | 1,140,250 | ||||||||||||
Net increase in cash and cash equivalents | (120,577 | ) | 208,821 | (9,934 | ) | (120,577 | ) | |||||||||
Cash and cash equivalents at beginning of period | 208,821 | - | 88,244 | 208,821 | ||||||||||||
Cash and cash equivalents at end of period | $ | 88,244 | $ | 208,821 | $ | 78,310 | $ | 88,244 | ||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||||||
Interest paid | $ | - | $ | - | $ | 53,837 | $ | - | ||||||||
Income taxes paid | $ | - | $ | - | $ | - | $ | - | ||||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||||||||
Stock issued to founder for intellectual property | $ | - | $ | 500 | ||||||||||||
Discount on notes from beneficial conversion feature and warrants | $ | 502,296 | $ | 200,000 | ||||||||||||
Convertible note issued for unpaid accrued salary | $ | 362,500 | $ | - | ||||||||||||
Discount on notes due to derivatives | $ | 600,564 | $ | 502,296 | ||||||||||||
Discount on related party notes from beneficial conversion feature and warrants | $ | 1,321,176 | $ | - | $ | - | $ | 1,321,176 | ||||||||
Related party notes payable reclassified as related party convertible notes payable | $ | 1,367,500 | $ | - | $ | 849,750 | $ | 1,367,500 | ||||||||
Effect of reverse merger | $ | - | $ | 16,352 | ||||||||||||
Common stock issued for conversion of related party notes payable | $ | 2,704,240 | $ | - | ||||||||||||
Common stock issued for conversion of convertible notes payable | $ | 137,500 | $ | - | ||||||||||||
Settlement of derivative liability | $ | 612,850 |
May 31, | May 31, | |||||||
2016 | 2015 | |||||||
Prepaid legal fee | $ | 6,742 | $ | 3,466 | ||||
Prepaid consulting fees | - | 28,334 | ||||||
Total prepaid expenses | $ | 6,742 | $ | 31,800 |
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 | ) |
May 31, | May 31, | |||||||
2017 | 2016 | |||||||
Note payable to Jeffrey Binder, an officer and director of the Company, for advances to fund operations (the “Binder Funding Notes”). The Binder Funding Notes bear interest at a rate of 6% for loans made through November 30, 2016, and at a rate of 10% for loans made after November 30, 2016. The Binder Funding Notes have no maturity date and are due on demand. During the twelve months ended May 31, 2016, Mr. Binder advanced a total of $95,250 to the Company under the Binder Funding Note 1; during the year ended May 31, 2016, $92,500 of this amount was transferred out of the Binder Funding Note 1 and used to fund two new convertible notes payable to Mr. Binder (See Binder Convertible Notes 1 and 2 below). During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $1,308 on the Binder Funding Note 1. In July 2016, the remaining principal balance of $2,750 in the Binder Funding Note 1 was transferred to a new Convertible Note payable to Mr. Binder (the “Binder Convertible Note 3”). During the twelve months ended May 31, 2017, Mr. Binder advanced a total of $145,850 to the Company under the Binder Funding Note 1. Also during the year ended May 31, 2017, Mr. Binder loaned the Company an additional $49,700; which was credited to the Binder Funding Note 1. Also during the year ended May 31, 2017, principal in the amount of $59,750 and accrued interest in the amount of $813 was transferred out of the Binder Funding Note 1 and used to fund two new convertible notes payable to Mr. Binder (See Binder Convertible Notes 3 and 4 below). Also during the year ended May 31, 2017, the Company made principal payments in the aggregate amount of $61,000 under the Binder Funding Note 1. During the year ended May 31, 2017, the Company accrued interest in the amount of $1,910 on the Binder Funding Note 1. Effective May 31, 2017, pursuant to the Omnibus Loan Agreement, a conversion feature was added to the Binder Funding Notes whereby principal and accrued interest is convertible into common stock of the Company at a rate of $0.25 per share. | $ | 77,550 | $ | 2,750 | ||||
Note payable to Frank Koretsky, a director of the Company, for advances to fund operations (the “Koretsky Funding Notes”). The Koretsky Funding Notes bear interest at a rate of 6% for loans made through November 30, 2016, and at a rate of 10% for loans made after November 30, 2016. The Koretsky Funding Notes have no maturity date and are due on demand. During the twelve months ended May 31, 2017, Mr. Koretsky advanced $550,000 to the Company under the Koretsky Funding Notes. Also during the twelve months ended May 31, 2017, $210,000 of principal and $1,346 of accrued interest was transferred out of the Koretsky Funding Notes and used to fund a new convertible notes payable to Mr. Koretsky (see Koretsky Convertible Note 3 below). Also during the twelve months ended May 31, 2017, principal and accrued interest in the amounts of $410,000 and $4,046, respectively, were transferred out of the Koretsky Funding Notes and contributed to the Newcan Funding Notes (see Newcan Funding Notes, below). During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $5,104 on the Koretsky Funding Notes. | - | 70,000 | ||||||
Notes payable to Newcan Investment Partners, LLC (“Newcan”), an entity owned by Frank Koretsky, a director of the Company, for advances to fund operations (the “Newcan Funding Notes”). The Newcan Funding Notes bear interest at a rate of 10%. The Newcan Funding Notes have no maturity date and are due on demand. During the twelve months ended May 31, 2017, principal and interest in the amount of $410,000 and $4,046, respectively, were transferred from the Koretsky Funding Notes into the Newcan Funding Notes (see Koretsky Funding Notes, above). Also during the year ended May 31, 2017, Newcan advanced $791,658 to the Company under the Newcan Funding Notes. Also during the year ended May 31, 2017, principal in the amount of $460,000 and accrued interest in the amount of $7,747, respectively, were transferred from the Newcan Finding Notes and used to fund the Newcan Convertible Notes 2 and 3 (see below); also during the year ended May 31, 2017, principal and accrued interest in the amounts of $120,000 and $2,121, respectively, were transferred out of the Newcan Funding Notes in order to fund the Newcan Convertible Note 1; see below. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $13,434 on this note. Effective May 31, 2017, pursuant to the Omnibus Loan Agreement, a conversion feature was added to the Newcan Funding Notes whereby principal and accrued interest is convertible into common stock of the Company at a rate of $0.25 per share. | 621,658 | - | ||||||
Total - Notes Payable, Related Parties | $ | 699,208 | $ | 72,750 |
May 31, | May 31, | |||||||
2016 | 2015 | |||||||
Note payable to Jeffrey Binder, an officer and director of the Company, for advances to fund operations (the “Binder Funding Note 1”). The Binder Funding Note 1 bears interest at a rate of 6%, has no maturity date and is due on demand. During the twelve months ended May 31, 2016, Mr. Binder advanced a total of $95,250 to the Company under the Binder Funding Note 1; during the year ended May 31, 2016, $92,500 of this amount was transferred out of the Binder Funding Note 1 and used to fund two new convertible notes payable to Mr. Binder (See Binder Convertible Notes 1 and 2 below). During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $1,308 on the Binder Funding Note 1. In July 2016, the remaining principal balance of $2,750 in the Binder Funding Note 1 was transferred to a new Convertible Note payable to Mr. Binder (the “Binder Convertible Note 3”). | $ | 2,750 | $ | - | ||||
Notes payable to Frank Koretsky, a director of the Company, for advances to fund operations (the “Koretsky Funding Note 1”). The Koretsky Funding Note 1 bears interest at a rate of 6%, has no maturity date and is due on demand. During the twelve months ended May 31, 2016 and 2015, Mr. Koretsky advanced the amounts of $745,000 and $600,000, respectively (a cumulative total of $1,345,000) to the Company under these notes; during the year ended May 31, 2016, $1,275,000 of this amount was transferred out of these notes in order to fund two new convertible notes payable to Mr. Koretsky in the amounts of $895,000 and $380,000 (see Koretsky Convertible Notes 1 and 2 below). During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $9,174 on this note. In July 2016, the remaining principal balance of $70,000 in the Koretsky Funding Note 1 was transferred to a new Convertible Note payable to Mr. Koretsky (the “Koretsky Convertible Note 3”). | 70,000 | 600,000 | ||||||
Total - Notes Payable, Related Parties | $ | 72,750 | $ | 600,000 |
May 31, | May 31, | |||||||
2017 | 2016 | |||||||
Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated January 12, 2016 and due January 1, 2019 (the “Binder Convertible Note 1”). This note bears interest at the rate of 6% per annum. No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $6,250 will be due; subsequent principal payments will due on the first day of each July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). The Company recognized a discount of $50,000 on the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $9,599 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $1,151 on this note. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, (i) the conversion rate of the Binder Convertible Note 1 was changed to $0.25 per share, and principal and accrued interest in the amounts of $50,000 and $3,872, respectively, were converted into a total of 215,488 shares of common stock; and (ii) the requirement to issue warrants upon conversion was deleted. During the twelve months ended May 31, 2017, the remaining discount on the Binder Convertible Note 1 in the amount of $40,401 was charged to operations, and the Company accrued interest in the amount of $3,000. | - | 50,000 | ||||||
Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated April 8, 2016 and due April 1, 2019 (the “Binder Convertible Note 2”). During the year ended May 31, 2016, Mr. Binder made advances to the Company in the aggregate amount of $95,250 (see Binder Funding Notes); $42,500 of this amount was used to fund the Binder Convertible Note 2. This note bears interest at the rate of 6% per annum through February 29, 2017 and 10% per annum thereafter. No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $5,313 will be due; subsequent principal payments will due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). The Company recognized a discount of $37,840 on the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $7,263 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $773 on this note. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, (i) the conversion rate of the Binder Convertible Note 2 was changed to $0.25 per share, and principal and accrued interest in the amounts of $42,500 and $3,583, respectively, were converted into a total of 184,332 shares of common stock; and (ii) the requirement to issue warrants upon conversion was deleted. During the twelve months ended May 31, 2017, the remaining discount on the Binder Convertible Note 2 in the amount of $35,260 was charged to operations, and the Company accrued interest in the amount of $4,287. | - | 42,500 |
May 31 | May 31 | |||||||
2016 | 2015 | |||||||
Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated January 12, 2016 and due January 1, 2019 (the “Binder Convertible Note 1”). During the year ended May 31, 2016, Mr. Binder made advances to the Company in the aggregate amount of $92,500 (see Binder Funding Notes); $50,000 of this amount was used to fund the Binder Convertible Note 1. This note bears interest at the rate of 6% per annum. No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $6,250 will be due; subsequent principal payments will due on the first day of each July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a three-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). The Company recognized a discount of $50,000 on the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $9,599 of this discount was charged to operations. During the twelve months ended May 31, 2016 the Company accrued interest in the amount of $1,151 on this note. | 50,000 | - | ||||||
Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated April 8, 2016 and due April 1, 2019 (the “Binder Convertible Note 2”). During the year ended May 31, 2016, Mr. Binder made advances to the Company in the aggregate amount of $95,250 (see Binder Funding Notes); $42,500 of this amount was used to fund the Binder Convertible Note 2. This note bears interest at the rate of 6% per annum through February 29, 2016 and 10% per annum thereafter. No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $5,313 will be due; subsequent principal payments will due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). The Company recognized a discount of $37,840 on the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $7,263 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $773 on this note. | 42,500 | - | ||||||
Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated January 12, 2016 and due January 1, 2019 (the “Koretsky Convertible Note 1”). During the years ended May 31, 2016 and 2015, Mr. Koretsky made advances to the Company in the amounts of $745,000 and $600,000, respectively (a total of $1,345,000) pursuant to note payable agreements (see Koretsky Funding Note 1). During the year ended May 31, 2016, $895,000 of this amount was used to fund the Koretsky Convertible Note 1. This note bears interest at the rate of 6% per annum. No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $111,875 will be due; subsequent principal payments will due on the first day of each July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). The Company recognized a discount of $895,000 on the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $171,822 of this discount was charged to operations. During the twelve months ended May 31, 2016 the Company accrued interest in the amount of $20,597 on this note. | 895,000 | - | ||||||
Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated April 8, 2016 and due April 1, 2019 (the “Koretsky Convertible Note 2”). During the years ended May 31, 2016 and 2015, Mr. Koretsky made advances to the Company in the amounts of $745,000 and $600,000, respectively (a total of $1,345,000), pursuant to note payable agreements (see Koretsky Funding Notes). During the year ended May 31, 2016, $380,000 of this amount was used to fund the Koretsky Convertible Note 2. This note bears interest at the rate of 6% per annum through February 29, 2016 and 10% per annum thereafter. No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $47,500 will be due; subsequent principal payments will due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). The Company recognized a discount of $338,336 on the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $64,939 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $7,100 on this note. | 380,000 | - | ||||||
Total – Convertible Notes Payable, Related Parties | $ | 1,367,500 | - | |||||
Less: Discount | (1,114,104 | ) | - | |||||
Convertible Notes Payable, Related Parties, Net of Discounts | $ | 253,396 | - | |||||
Convertible Notes Payable, Related Parties, Net of Discounts, Current Portion | $ | 22,678 | $ | - | ||||
Convertible Notes Payable, Related Parties, Net of Discounts, Long-term Portion | 230,718 | - |
May 31, 2017 | May 31, 2016 | |||||||
Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated July 20, 2016 and due July 1, 2019 (the “Binder Convertible Note 3”). The Binder Convertible Note 3 was funded with the conversion of $250,000 of unpaid accrued salary due to Mr. Binder and $12,750 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 10% per annum. No payments are required until July 1, 2017, at which time all accrued interest becomes due and payable. Commencing on October 1, 2017, the first of eight principal payments in the amount of $32,844 will become due; subsequent principal payments will become due on the first day of each, January, April, July and October until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, (i) the conversion rate of the Binder Convertible Note 3 was changed to $0.25 per share, and principal and accrued interest in the amounts of $262,750 and $11,972, respectively, were converted into a total of 1,098,888 shares of common stock; and (ii) the requirement to issue warrants upon conversion was deleted. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $22,742 on the Binder Convertible Note 3. | - | - | ||||||
Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated March 31, 2017 (the “Binder Convertible Note 4”). The Binder Convertible Note 4 was funded with the conversion of $112,500 of unpaid accrued salary due to Mr. Binder and $47,000 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 10% per annum. No interest payments are required until April 1, 2018, at which time all accrued interest becomes due and payable. Commencing on July 1, 2018, the first of eight principal payments in the amount of $19,938 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.25 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $0.25 per share. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, the requirement to issue warrants upon conversion was deleted, and principal in the amount of $87,500 was converted into a total of 350,000 shares of common stock. The remaining principal balance of $72,000 will be due in eight quarterly payments in the amount of $9,000 commencing July 1, 2018; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $2,666 on the Binder Convertible Note 4. | 72,000 | - |
May 31 | May 31 | |||||||
2016 | 2015 | |||||||
Convertible promissory note issued to an unaffiliated third party due April 29, 2018 (the “April 2015 Note”). During the twelve months ended May 31, 2015, the lender loaned the Company the amount of $200,000 pursuant to this note. The April 2015 Note bears interest at a rate of 15% per annum. On the first anniversary of this note, the all then accrued interest became due. Thereafter, the Company is required to make eight equal payments of principal together with accrued interest, quarterly in arrears, commencing on July 1, 2016 until paid in full. The note and any accrued unpaid interest is convertible into common stock of the Company. For each dollar converted, the note holder shall receive two shares of common stock and one three-year warrant to purchase 1.33 shares (post Reverse-Split) of common stock at $0.75 per share (post Reverse-Split). The Company recognized a discount of $200,000 on the April 2015 Note related to the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016 and 2015, $66,667 and $222,222 of this discount, respectively, was charged to operations. During the twelve months ended May 31, 2016 and 2015, the Company accrued interest in the amount of $30,082 and $2,630, respectively, on this note. | 200,000 | 200,000 | ||||||
Convertible Promissory Note payable to Old Main Capital, LLC (“Old Main”) dated March 18, 2016, for the purchase of up to $555,555 in 10% Original Issue Discount Convertible Promissory Notes (the “10% Notes”). During the year ended May 31, 2016, Old Main loaned the Company the amount of $333,332 pursuant to these notes. These notes bear interest at the rate of 10% per annum. Old Main may, at its option, convert all or a portion of the notes and accrued but unpaid interest into shares of common stock at a conversion price of $0.80 per share (post Reverse-Split) (the “Fixed Conversion Price”). The Fixed Conversion Price is subject to adjustment if, at any time while this note is outstanding, the Company should issue any equity security with an effective price per share that is lower than the Fixed Conversion Price (the “Base Conversion Price”), other than certain exempt issuances. In such an instance, the Fixed Conversion Price will be lowered to match the Base Conversion Price. The shares underlying the 10% Notes are subject to a registration rights agreement. At the earlier of September 18, 2016 or two trading days after the registration statement is declared effective, the Company must begin to redeem 1/24th of the face amount of the notes and any accrued but unpaid interest on a bi-weekly basis. Such amortization payments may be made, at our option, in cash or, subject to certain conditions, in common stock pursuant to a conversion rate equal to the lower of (a) $0.80 or (b) 75% of the lowest daily volume weighted average price of the common stock in the twenty consecutive trading days immediately prior to the conversion date. The Company recognized a discount of $330,188 on the 10% Notes related to the value of the original issue discount and embedded derivative. During the twelve months ended May 31, 2016, $4,056 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $5,160 on this note. | 333,332 | - | ||||||
Convertible promissory note payable to Old Main dated March 18, 2016 and bearing interest at a rate of 8% (the “8% Convertible Note”). The 8% Convertible Note was issued for Old Main’s commitment to enter into an equity line transaction with the Company and prepare all of the related transaction documents. Old Main may, at its option, convert all or a portion of the note and accrued but unpaid interest into shares of common stock at a conversion price of $1.07 per share (post Reverse-Split) (the “8% Fixed Conversion Price”). The 8% Fixed Conversion Price is subject to adjustment if, at any time while this note is outstanding, the Company should issue any equity security with an effective price per share that is lower than the 8% Fixed Conversion Price (the “8% Base Conversion Price”), other than certain exempt issuances. In such an instance, the 8% Fixed Conversion Price will be lowered to match the 8% Base Conversion Price. The shares underlying the 8% Note are subject to a registration rights agreement. At the earlier of September 18, 2016 or two trading days after this registration statement becomes effective, the Company must begin to redeem 1/6th of the face amount of the note and any accrued but unpaid interest on a monthly basis. Such amortization payment may be made, at its option, in cash or, subject to certain conditions, in common stock pursuant to a conversion rate equal to the lower of (a) $1.07 (post Reverse-Split) or (b) 75% of the lowest daily volume weighted average price of the common stock in the twenty consecutive trading days ending on the trading day that is immediately prior to the applicable conversion date. The Company recognized a discount of $172,108 on the value of the embedded derivative. During the twelve months ended May 31, 2016, $8,522 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $3,244 on this note. | 200,000 | - | ||||||
Total - Convertible Notes Payable | $ | 733,332 | $ | 200,000 | ||||
Less: Discount | (587,910 | ) | (194,444 | ) | ||||
Convertible Notes Payable, Net of Discounts | $ | 145,422 | $ | 5,556 | ||||
Total - Convertible Notes Payable, Net of Discounts, Current Portion | $ | 72,525 | $ | - | ||||
Total - Convertible Notes Payable, Net of Discounts, Long-term Portion | $ | 43,312 | $ | 5,556 | ||||
Discounts on notes payable amortized to interest expense: | $ | 286,317 | $ | 5,556 |
May 31, 2017 | May 31, 2016 | ||||||
Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated January 12, 2016 and due January 1, 2019 (the “Koretsky Convertible Note 1”). During the years ended May 31, 2016 and 2015, Mr. Koretsky made advances to the Company in the amounts of $745,000 and $600,000, respectively (a total of $1,345,000) pursuant to note payable agreements (see Koretsky Funding Note 1). During the year ended May 31, 2016, $895,000 of this amount was used to fund the Koretsky Convertible Note 1. This note bears interest at the rate of 6% per annum. No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $111,875 will be due; subsequent principal payments will due on the first day of each July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). The Company recognized a discount of $895,000 on the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $171,822 of this discount was charged to operations. During the twelve months ended May 31, 2016 the Company accrued interest in the amount of $20,597 on this note. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, (i) the conversion rate of the Koretsky Convertible Note 1 was changed to $0.25 per share, and principal and accrued interest in the amounts of $895,000 and $83,089, respectively, were converted into a total of 3,912,356 shares of common stock; and (ii) the requirement to issue warrants upon conversion was deleted. During the twelve months ended May 31, 2017, the remaining discount on the Koretsky Convertible Note 1 in the amount of $732,178 was charged to operations, and the Company accrued interest in the amount of $53,700. | - | 895,000 | |||||
Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated April 8, 2016 and due April 1, 2019 (the “Koretsky Convertible Note 2”). During the years ended May 31, 2016 and 2015, Mr. Koretsky made advances to the Company in the amounts of $745,000 and $600,000, respectively (a total of $1,345,000), pursuant to note payable agreements (see Koretsky Funding Notes). During the year ended May 31, 2016, $380,000 of this amount was used to fund the Koretsky Convertible Note 2. This note bears interest at the rate of 6% per annum through February 29, 2017 and 10% per annum thereafter. No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $47,500 will be due; subsequent principal payments will due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). The Company recognized a discount of $338,336 on the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $64,939 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $7,100 on this note. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, (i) the conversion rate of the Koretsky Convertible Note 2 was changed to $0.25 per share, and principal and accrued interest in the amounts of $380,000 and $35,302, respectively, were converted into a total of 1,661,208 shares of common stock; and (ii) the requirement to issue warrants upon conversion was deleted. During the twelve months ended May 31, 2017, the remaining discount on the Koretsky Convertible Note 2 in the amount of $315,265 was charged to operations, and the Company accrued interest in the amount of $38,000. | 380,000 |
May 31, 2017 | May 31, 2016 | |||||||
Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated July 20, 2016 and due July 1, 2019 (the “Koretsky Convertible Note 3”). The Koretsky Convertible Note 3 was funded with $210,000 of advances Mr. Koretsky made to the Company under the Koretsky Funding Notes. This note bears interest at the rate of 10% per annum. No payments are required until July 1, 2017, at which time all accrued interest becomes due and payable. Commencing on October 1, 2017, the first of eight principal payments in the amount of $32,844 will become due; subsequent principal payments will become due on the first day of each, January, April, July and October until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, (i) the conversion rate of the Koretsky Convertible Note 3 was changed to $0.25 per share, and principal and accrued interest in the amounts of $210,000 and $11,678, respectively, were converted into a total of 886,712 shares of common stock; and (ii) the requirement to issue warrants upon conversion was deleted. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $19,021 on the Koretsky Convertible Note 3. | - | - | ||||||
Unsecured convertible note issued to Newcan, an entity owned by Frank Koretsky, a director of the Company, dated March 31, 2017 (the “Newcan Convertible Note 1”). The Newcan Convertible Note 1 was funded with the conversion of $120,000 of advances made to the Company under the Newcan Funding Notes. This note bears interest at the rate of 10% per annum. No interest payments are required until April 1, 2018, at which time all accrued interest becomes due and payable. Commencing on July 1, 2018, the first of eight principal payments in the amount of $15,000 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.25 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $0.25 per share. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $2,005 on the Koretsky Convertible Note 4. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, the requirement to issue warrants upon conversion was deleted. | 120,000 | - | ||||||
Unsecured convertible note issued to CLS CO 2016, LLC an entity affiliated with Frank Koretsky, a director of the Company, dated August 3, 2016 and due August 1, 2018 (the “CLS CO 2016 Note”). This note has a face amount of $150,000 and bears interest at the rate of 15% per annum. All interest accruing on this Note through the first anniversary of this Note shall be added to principal. Commencing on November 1, 2017, the Company shall pay the outstanding principal balance in four (4) equal quarterly installments, together with accrued interest, in arrears, until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, (i) the conversion rate of the CLS CO 2016 Note was changed to $0.25 per share, and principal and accrued interest in the amounts of $150,000 and $9,247, respectively, were converted into a total of 636,988 shares of common stock; and (ii) the requirement to issue warrants upon conversion was deleted. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $18,555 on the CLS CO 2016 Note. | - | - |
May 31, 2017 | May 31, 2016 | |||||||
Unsecured convertible note issued to Newcan, dated January 10, 2017 and due January 2, 2020 (the “Newcan Convertible Note 2”). The Newcan Convertible Note 2 was funded with $410,000 of advances Newcan made to the Company under the Newcan Funding Notes. This note bears interest at the rate of 10% per annum. No payments are required until January 2, 2018, at which time all accrued interest becomes due and payable. Commencing on April 1, 2018, the first of eight principal payments in the amount of $51,250 will become due; subsequent principal payments will become due on the first day of each, July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, (i) the conversion rate of the Newcan Convertible Note 2 was changed to $0.25 per share, and principal and accrued interest in the amounts of $410,000 and $7,527, respectively, were converted into a total of 1,670,108 shares of common stock; and (ii) the requirement to issue warrants upon conversion was deleted. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $15,838 on the Newcan Convertible Note 2. | - | - | ||||||
Unsecured convertible note issued to Newcan, dated January 10, 2017 and due January 2, 2020 (the “Newcan Convertible Note 3”). The Newcan Convertible Note 3 was funded with $50,000 of advances Newcan made to the Company under the Newcan Funding Notes. This note bears interest at the rate of 10% per annum. No payments are required until January 2, 2018, at which time all accrued interest becomes due and payable. Commencing on April 1, 2018, the first of eight principal payments in the amount of $6,250 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share. Pursuant to the Omnibus Loan Agreement, on May 31, 2017, (i) the conversion rate of the Newcan Convertible Note 3 was changed to $0.25 per share, and principal and accrued interest in the amounts of $50,000 and $220, respectively, were converted into a total of 200,880 shares of common stock; and (ii) the requirement to issue warrants upon conversion was deleted. During the twelve months ended May 31, 2017, the Company accrued interest in the amount of $2,822 on the Newcan Convertible Note 3. | - | - | ||||||
Total – Convertible Notes Payable, Related Parties | $ | 192,000 | $ | 1,367,500 | ||||
Less: Discount | - | (1,114,104 | ) | |||||
Convertible Notes Payable, Related Parties, Net of Discounts | $ | 192,000 | $ | 253,396 | ||||
Convertible Notes Payable, Related Parties, Current Portion | $ | - | $ | 118,125 | ||||
Convertible Notes Payable, Related Parties, Long-term Portion | $ | 192,000 | $ | 1,249,375 | ||||
Convertible Notes Payable, Related Parties, Net of Discounts, Current Portion | $ | - | $ | 22,678 | ||||
Convertible Notes Payable, Related Parties, Net of Discounts, Long-term Portion | $ | 192,000 | $ | 230,718 |
May 31, 2017 | May 31, 2016 | |||||||
Convertible promissory note issued to an unaffiliated third party due April 29, 2018 (the “April 2015 Note”). During the twelve months ended May 31, 2015, the lender loaned the Company the amount of $200,000 pursuant to this note. The April 2015 Note bears interest at a rate of 15% per annum. On the first anniversary of this note, the all then accrued interest became due. Thereafter, the Company is required to make eight equal payments of principal together with accrued interest, quarterly in arrears, commencing on July 1, 2016 until paid in full. The note and any accrued unpaid interest is convertible into common stock of the Company. For each dollar converted, the note holder shall receive two shares of common stock and one three-year warrant to purchase 1.33 shares of common stock at $0.75 per share. The Company recognized a discount of $200,000 on the April 2015 Note related to the value of the beneficial conversion feature at the time of issuance. During the twelve months ended May 31, 2016, $66,667 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $30,082 on this note. During the year ended May 31, 2017, the Company repaid principal in the amount of $100,000 and interest in the amount of $53,837 on this note. Also during the year ended May 31, 2017, the Company charged $100,545 of the discount to operations, and accrued interest in the amount of $22,440 on the April 2015 Note. | 100,000 | 200,000 | ||||||
Convertible Promissory Note payable to Old Main Capital, LLC (“Old Main”) dated March 18, 2016, for the purchase of up to $555,555 in 10% Original Issue Discount Convertible Promissory Notes (the “10% Notes”). During the year ended May 31, 2016, Old Main loaned the Company the amount of $333,332 pursuant to these notes. These notes bear interest at the rate of 10% per annum. Old Main may, at its option, convert all or a portion of the notes and accrued but unpaid interest into shares of common stock at a conversion price of $0.80 per share (post Reverse-Split) (the “Fixed Conversion Price”). The Fixed Conversion Price is subject to adjustment if, at any time while this note is outstanding, the Company should issue any equity security with an effective price per share that is lower than the Fixed Conversion Price (the “Base Conversion Price”), other than certain exempt issuances. In such an instance, the Fixed Conversion Price will be lowered to match the Base Conversion Price. The shares underlying the 10% Notes are subject to a registration rights agreement. At the earlier of September 18, 2016 or two trading days after the registration statement is declared effective, the Company must begin to redeem 1/24th of the face amount of the notes and any accrued but unpaid interest on a bi-weekly basis. Such amortization payments may be made, at our option, in cash or, subject to certain conditions, in common stock pursuant to a conversion rate equal to the lower of (a) $0.80 or (b) 75% of the lowest daily volume weighted average price of the common stock in the twenty consecutive trading days immediately prior to the conversion date. The Company recognized a discount of $330,188 on the 10% Notes related to the value of the original issue discount and embedded derivative. During the twelve months ended May 31, 2016, $4,056 of this discount was charged to operations. During the twelve months ended May 31, 2016, the Company accrued interest in the amount of $5,160 on this note. On October 6, 2016, the 10% Notes were amended to increase the interest rate to 15% (effective August 1, 2016) and subsequently amended November 28, 2016 to convert the 10% Notes from installment notes to “balloon” notes, with all principal and accrued interest due on September 18, 2017. In exchange for amending the terms of the 10% Notes, the Company increased the outstanding principal balance by 10% to $366,666; pursuant to this modification, the Company recorded a loss on modification of debt in the amount of $33,334. In addition, the Fixed Conversion Price was changed to a variable conversion price equal to the lesser of the prior Fixed Conversion Price or 75% of the lowest VWAP in the fifteen trading days ending on the trading day immediately prior to the conversion date. The 10% Notes were revalued as of the November 28, 2016 amendment and the Company recognized a discount of $366,666 on the value of the embedded derivative. During the three months ended February 28, 2017, Old Main converted an aggregate of $100,000 of principal, in six transactions, into 828,173 shares of common stock. On March 27, 2017, the Company entered into a further amendment to the Convertible Promissory Notes issued on March 18, April 22 and May 27, 2016, whereby the Company agreed to prepay all amounts due under the 10% Notes on or before April 1, 2017, which amount was agreed to be $372,670, consisting of principal in the amount of $229,166, accrued interest in the amount of $57,504, and a prepayment penalty in the amount of $86,000. The payment to Old Main of $372,670 was made from the proceeds of loans to the Company made by Newcan and Jeffrey Binder, who are either officers and directors of the Company or affiliates of officers and directors of the Company. These loans are reflected in the Newcan Funding Notes (see above, $323,000); and the Binder Funding Note 1 (see above, $49,700). Also, during the year ended May 31, 2017, the Company accrued interest in the amount of $52,344 on the 10% notes. | - | 333,332 |
May 31, 2017 | May 31, 2016 | |||||||
Convertible promissory note payable to Old Main dated March 18, 2016 and bearing interest at a rate of 8% (the “8% Note”). The 8% Note was issued for Old Main’s commitment to enter into an equity line transaction with the Company and prepare all of the related transaction documents. Old Main may, at its option, convert all or a portion of the note and accrued but unpaid interest into shares of common stock at a conversion price of $1.07 per share (post Reverse-Split) (the “8% Fixed Conversion Price”). The 8% Fixed Conversion Price is subject to adjustment if, at any time while this note is outstanding, the Company should issue any equity security with an effective price per share that is lower than the 8% Fixed Conversion Price (the “8% Base Conversion Price”), other than certain exempt issuances. In such an instance, the 8% Fixed Conversion Price will be lowered to match the 8% Base Conversion Price. The shares underlying the 8% Note are subject to a registration rights agreement. At the earlier of September 18, 2016 or two trading days after this registration statement becomes effective, the Company must begin to redeem 1/6th of the face amount of the note and any accrued but unpaid interest on a monthly basis. Such amortization payment may be made, at its option, in cash or, subject to certain conditions, in common stock pursuant to a conversion rate equal to the lower of (a) $1.07 (post Reverse-Split) or (b) 75% of the lowest daily volume weighted average price of the common stock in the twenty consecutive trading days ending on the trading day that is immediately prior to the applicable conversion date. The Company recognized a discount of $172,108 on the value of the embedded derivative. On November 28, 2016, the 8% Note was amended converting the note from an installment note to a “balloon” note, with all principal and accrued interest due on March 18, 2017. In addition, the Fixed Conversion Price was changed to a variable conversion price equal to the lesser of the prior Fixed Conversion Price or 75% of the lowest VWAP in the fifteen trading days ending on the trading day immediately prior to the conversion date. The November 28, 2016 amendment required an extinguishment analysis of the 8% Note resulting in gain on extinguishment of debt in the amount of $81,496 for the nine months ended February 28, 2017. The gain on extinguishment of debt was included in additional paid-in capital at February 28, 2017. The 8% Note was revalued as of the November 28, 2016 amendment and the Company recognized a discount of $169,476 on the value of the embedded derivative. At February 28, 2017 and May 31, 2016, the amount of discount remaining on these notes was $118,998 and $163,586, respectively. On March 27, 2017, the Company entered into a further amendment to the convertible promissory notes issued on March 18, April 22 and May 27, 2016, whereby the Company agreed to increase the outstanding amount due under the 8% Note as of March 18, 2017 by 5%, or $10,000. In exchange for doing so, Old Main agreed to extend the maturity of the 8% Note until July 1, 2017 and to suspend conversions under the 8% Note until July 1, 2017. Also during the year ended May 31, 2017, the Company accrued interest in the amount of $17,207 on the 8% Note. | 210,000 | 200,000 | ||||||
Total - Convertible Notes Payable | $ | 310,000 | $ | 733,332 | ||||
Less: Discount | (57,644 | ) | (617,495 | ) | ||||
Convertible Notes Payable, Net of Discounts | $ | 252,356 | $ | 115,837 | ||||
Total - Convertible Notes Payable, Current Portion | $ | 310,000 | $ | 300,000 | ||||
Total - Convertible Notes Payable, Long-term Portion | $ | - | $ | 433,332 | ||||
Total - Convertible Notes Payable, Net of Discounts, Current Portion | $ | 252,356 | $ | 72,525 | ||||
Total - Convertible Notes Payable, Net of Discounts, Long-term Portion | $ | - | $ | 43,312 | ||||
Discounts on notes payable amortized to interest expense: | $ | 252,356 | $ | 286,317 |
May 31, | May 31, | |||||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
Volatility | 89% to 107 | % | 214 | % | 64% to 138 | % | 89% to 107 | % | ||||||||
Dividends | - | - | - | - | ||||||||||||
Risk-free interest rates | 0.91 | % | 0.84% to 1.18 | % | 0.86% to 1.19 | % | 1.18% to 0.91 | % | ||||||||
Term (years) | 3 | 3 | 1.25 to 3 | 3 |
May 31, | May 31, | May 31, | May 31, | |||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
Federal and state statutory rate | 34 | % | 34 | % | 34 | % | 34 | % | ||||||||
Net operating loss carry forwards | 787,513 | 500,417 | 1,386,438 | 787,513 | ||||||||||||
Valuation allowance for deferred tax assets | (787,513 | ) | (500,417 | ) | (1,386,438 | ) | (787,513 | ) | ||||||||
Net deferred tax assets | - | - | - | - |
For the 12 months ended May 31, | ||||||||
2017 | 177,845 | |||||||
2018 | 177,845 | 177,845 | ||||||
2019 | 177,845 | 177,845 | ||||||
2020 | 177,845 | 177,845 | ||||||
2021 | 148,202 | 148,202 | ||||||
Thereafter | - | - | ||||||
Total | 859,582 | 681,737 |
May 31, 2016 | May 31, 2017 | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Derivative liabilities | $ | - | $ | - | $ | 418,537 | $ | 418,537 | $ | - | $ | - | $ | 95,276 | $ | 95,276 |
May 31, 2016 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | - | $ | - | $ | 418,537 | $ | 418,537 |
Derivative | ||||
Liability | ||||
Liabilities Measured at Fair Value | ||||
Balance as of May 31, 2015 | $ | - | ||
Issuances | 480,294 | |||
Revaluation gain | (61,757 | ) | ||
Balance as of May 31, 2016 | $ | 418,537 | ||
Issuances | 600,564 | |||
Convert or Redeem | (612,850 | ) | ||
Revaluation gain | (310,975 | ) | ||
Balance as of May 31, 2017 | $ | 95,276 |
● | We do not have an independent board of directors or audit committee or adequate segregation of duties; |
● | We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to our limited resources. |
Name | Age | Title | Term Expires | Age | Title | Term Expires | ||||||||
Jeffrey Binder | 69 | Chairman, President, Chief Executive Officer and Director | 2017 | 70 | Chairman, President, Chief Executive Officer and Director | 2017 | ||||||||
Frank Koretsky | 53 | Director | 2016 | 54 | Director | 2016 | ||||||||
Alan Bonsett | 42 | Chief Operating Officer | -- | 43 | Chief Operating Officer | -- |
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||
Larry Adelt, | 2016 | — | — | — | — | — | — | — | ||||||||||||||||||||||
Former President and Chief Executive Officer(1) | 2015 | — | — | — | — | — | — | — | ||||||||||||||||||||||
Jeffrey Binder, | 2016 | 150,000 | — | — | — | — | — | 150,000 | ||||||||||||||||||||||
Chairman, President and Chief Executive Officer(2) | 2015 | 100,000 | — | — | — | — | — | 100,000 | ||||||||||||||||||||||
Alan Bonsett | 2016 | 118,750 | — | — | — | — | 327,500 | 446,250 | ||||||||||||||||||||||
Chief Operating Officer(3) | 2015 | — | — | — | — | — | — | — |
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||
Jeffrey Binder, | 2017 | 150,000 | — | — | — | — | — | 150,000 | ||||||||||||||||||||||
Chairman, President and Chief Executive Officer(1) | 2016 | 150,000 | — | — | — | — | — | 150,000 | ||||||||||||||||||||||
Alan Bonsett, | 2017 | 150,000 | 9,000 | (3) | 159,000 | |||||||||||||||||||||||||
Chief Operating Officer(2) | 2016 | 118,750 | — | 327,500 | (4) | — | — | --- | 446,250 |
1 |
Mr. Bonsett and the Company entered into an employment agreement effective August 1, 2015 and he was appointed Chief Operating Officer of the Company effective August 15, 2015. |
3 | Amount represents auto allowance paid to Mr. Bonsett. |
4 | Amount represents shares of restricted stock issued to Mr. Bonsett, which vested in August 2016. |
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
Larry Adelt, Former, President and CEO(1) | -- | -- | -- | -- | N/A | -- | -- | -- | -- | |||||||||||||||||||||||||||
Jeffrey Binder, Chairman, President and CEO | -- | -- | -- | -- | N/A | -- | -- | -- | -- | |||||||||||||||||||||||||||
Alan Bonsett, COO(2) | -- | -- | -- | -- | N/A | 250,000 | $ | 327,500 | -- | -- |
Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership(2) | Percentage of Class | Amount and Nature of Beneficial Ownership | Percentage of Class | ||||||||||||||
Jeffrey I. Binder | 5,698,893 | (3) | 27.1 | % | 7,734,908 | (2 | ) | 22.9 | % | |||||||||
Raymond Keller | 5,000,000 | 24.6 | % | 5,000,000 | 15.2 | % | ||||||||||||
Frank Koretsky | 8,489,470 | (4) | 35.6 | % | 16,920,252 | (3 | ) | 47.2 | % | |||||||||
Marc Douglas | 1,096,094 | 5.4 | % | |||||||||||||||
Charles DeAngelo | 1,096,094 | 5.4 | % | |||||||||||||||
Newcan Investment Partners, LLC (4) | 4,822,988 | 13.5 | % | |||||||||||||||
Alan Bonsett | 250,000 | 1.2 | % | 250,000 | 0.8 | % | ||||||||||||
All directors and executive officers as a group (3 persons) (5) | 14,438,363 | 58.8 | % | 29,905,160 | (5 | ) | 81.5 | % |
1 | Except as otherwise indicated, to our knowledge, the persons named in this table have sole voting, investment and dispositive power with respect to all shares of common stock listed. |
2 |
3 | Includes |
4 | Newcan Investment Partners, LLC is wholly owned by Mr. Koretsky. Includes |
5 | Includes |
Exhibit No. | Description | |
2.1 | Agreement and Plan of Merger dated April 28, 2015 by and among CLS Holdings USA, Inc., CLS Merger, Inc., and CLS Labs, Inc. (incorporated by reference from Exhibit 2.1 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015). | |
3.1 | ||
Amended and Restated Articles of Incorporation of CLS Holdings USA, Inc. (incorporated by reference from Exhibit 1.1 in the Company’s Current Report on Form 8-K filed with the SEC on November 26, 2014). | ||
Amended and Restated Bylaws of CLS Holdings USA, Inc. (incorporated by reference from Exhibit 1.2 in the Company’s Current Report on Form 8-K filed with the SEC on November 26, 2014). | ||
3.3 | Certificate of Designation of CLS Holdings USA, Inc. with respect to Series A Convertible Preferred Stock (incorporated by reference from Exhibit 3.1 in the Company’s Current Report on Form 8-K filed with the SEC on July 24, 2017). | |
4.1 | Form of Stock Certificate (incorporated by reference from Exhibit 4.1 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015). | |
10.1 | Employment Agreement dated October 1, 2014 between CLS Labs, Inc. and Jeffrey Binder (incorporated by reference from Exhibit 10.1 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015) (1). | |
10.2 | Addendum to Employment Agreement dated April 28, 2015 between CLS Labs, Inc., CLS Holdings USA, Inc. and Jeffrey Binder (incorporated by reference from Exhibit 10.2 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015) (1). | |
10.3 | ||
Lease dated April 17, 2015 between Casimir-Quince, LLC, and CLS Labs Colorado, Inc. (incorporated by reference from Exhibit 10.5 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015). | ||
Sublease Agreement dated April 17, 2015 between CLS Labs Colorado, Inc. and Picture Rock Holdings, LLC. (incorporated by reference from Exhibit 10.6 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015). | ||
Licensing Agreement dated April 17, 2015 between CLS Labs Colorado, Inc. and Picture Rock Holdings, LLC. (incorporated by reference from Exhibit 10.7 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015). | ||
Equipment Lease dated April 17, 2015 between CLS Labs Colorado, Inc. and Picture Rock Holdings, LLC. (incorporated by reference from Exhibit 10.8 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015). | ||
Subscription for Property Agreement dated July 16, 2014 between CLS Labs, Inc. and Raymond Keller (incorporated by reference from Exhibit 2.1 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015). | ||
Promissory Note dated April 17, 2015 between CLS Labs Colorado, Inc. and Picture Rock Holdings, LLC (incorporated by reference from Exhibit 10.11 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015). | ||
Confidentiality, Non-Compete and Proprietary Rights Agreement dated July 16, 2014 between CLS Labs, Inc. and Raymond Keller (incorporated by reference from Exhibit 2.1 in the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2015). | ||
Employment Agreement dated August 18, 2015 between CLS Holdings USA, Inc. and Alan Bonsett (incorporated by reference from Exhibit 10.1 on the Company’s Current Report on Form 8-K filed with the SEC on August 20, 2015) (1). |
Loan Agreement dated April 29, 2015 (incorporated by reference from Exhibit 10.1 in the Company’s Current Report on Form 8-K filed with the SEC on May 5, 2015). | ||
Form of Indemnification Agreement (incorporated by reference from Exhibit 10.1 in the Company’s Current Report on Form 8-K filed with the SEC on December 22, 2105). | ||
Koretsky (incorporated by reference from Exhibit 10.16 in the Company’s Annual Report on Form 10-K filed with the SEC on August 29, 2016). | ||
(incorporated by reference from Exhibit 10.17 in the Company’s Annual Report on Form 10-K filed with the SEC on August 29, 2016). | ||
10% Original Issue Discount Convertible Promissory Note dated March 18, 2016, in favor of Old Main Capital, LLC (incorporated by reference from Exhibit 4.1 in the Company’s Current Report on Form 8-K filed with the SEC on March 24, 2016). | ||
8% Convertible Promissory Note dated March 18, 2016 in favor of Old Main Capital, LLC (incorporated by reference from Exhibit 4.2 in the Company’s Current Report on Form 8-K filed with the SEC on March 24, 2016). | ||
Securities Purchase Agreement dated March 18, 2016 between the Company and Old Main Capital, LLC (incorporated by reference from Exhibit 10.20 in Amendment No. 1 to the Company’s Registration Statement No. 333-210851 filed with the SEC on June 2, 2016). | ||
Registration Rights Agreement dated March 18, 2016 between the Company and Old Main Capital, LLC (incorporated by reference from Exhibit 10.2 in the Company’s Current Report on Form 8-K filed with the SEC on March 24, 2016). | ||
Convertible Promissory Note dated April 11, 2016, in favor of Frank Koretsky (incorporated by reference from Exhibit 10.1 in the Company’s Current Report on Form 8-K filed with the SEC on April 14, 2016). | ||
Convertible Promissory Note dated April 11, 2016, in favor of Jeffrey Binder (incorporated by reference from Exhibit 10.2 in the Company’s Current Report on Form 8-K filed with the SEC on April 14, 2016). | ||
Equity Purchase Agreement dated April 18, 2016 between the Company and Old Main Capital, LLC (incorporated by reference from Exhibit 10.1 in the Company’s Current Report on Form 8-K filed with the SEC on April 20, 2016). | ||
Convertible Promissory Note dated July 20, 2016, in favor of Frank Koretsky (incorporated by reference from Exhibit 10.1 in the Company’s Current Report on Form 8-K filed with the SEC on July 28, 2016). | ||
Convertible Promissory Note dated July 20, 2016, in favor of Jeffrey Binder (incorporated by reference from Exhibit 10.2 in the Company’s Current Report on Form 8-K filed with the SEC on July 28, 2016). |
10.24 | Amendment to Equity Purchase Agreement dated October 6, 2016 between the Company and Old Main Capital, LLC (incorporated by reference from Exhibit 10.2 in the Company’s Current Report on Form 8-K filed with the SEC on October 7, 2016). | |
10.25 | Amendment to Agreements dated October 6, 2016 between the Company and Old Main Capital, LLC (incorporated by reference from Exhibit 10.1 in the Company’s Current Report on Form 8-K filed with the SEC on October 7, 2016). | |
10.26 | Amendment #2 to the Convertible Promissory Notes Issued on March 18, April 22, and May 27, 2016 dated November 28, 2016 (incorporated by reference from Exhibit 10.1 in the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2016). | |
10.27 | Convertible Promissory Note dated January 10, 2017 in favor of Newcan Investment Partners, LLC (incorporated by reference from Exhibit 10.1 in the Company’s Current Report on Form 8-K filed with the SEC on January 13, 2017). | |
10.28 | Convertible Promissory Note dated January 10, 2017 in favor of Newcan Investment Partners, LLC (incorporated by reference from Exhibit 10.2 in the Company’s Current Report on Form 8-K filed with the SEC on January 13, 2017). |
10.29 | Amendment #3 to the Convertible Promissory Notes Issued on March 18, April 22, and May 27, 2016 dated March 27, 2017 (incorporated by reference from Exhibit 10.1 in the Company's Current Report on Form 8-K filed with the SEC on March 28, 2017). | |
10.30 | Convertible Promissory Note dated March 31, 2017 in favor of Newcan Investment Partners, LLC (incorporated by reference from Exhibit 10.1 in the Company's Current Report on Form 8-K filed with the SEC on April 4, 2017). | |
10.31 | Convertible Promissory Note dated March 31, 2017 in favor of Jeffrey I. Binder (incorporated by reference from Exhibit 10.2 in the Company's Current Report on Form 8-K filed with the SEC on April 4, 2017). | |
10.32 | Omnibus Loan Amendment Agreement dated May 31, 2017 among the Company, Jeffrey I. Binder, Frank Koretsky, Newcan Investment Partners, LLC and CLS CO 2016, LLC (incorporated by reference from Exhibit 10.1 in the Company's Current Report on Form 8-K filed with the SEC on June 2, 2017). | |
10.33 | Amendment #4 to Convertible Promissory Note Issued on March 18, 2016 dated July 6, 2017 (incorporated by reference from Exhibit 10.1 in the Company's Current Report on Form 8-K filed with the SEC on July 7, 2017). | |
10.34 | Convertible Promissory Note dated August 23, 2017 in favor of Newcan Investment Partners, LLC (incorporated by reference from Exhibit 10.1 in the Company's Current Report on Form 8-K filed with the SEC on August 24, 2017). | |
10.35 | Convertible Promissory Note dated August 23, 2017 in favor of Newcan Investment Partners, LLC (incorporated by reference from Exhibit 10.2 in the Company's Current Report on Form 8-K filed with the SEC on August 24, 2017). | |
10.36 | Convertible Promissory Note dated August 23, 2017 in favor of Jeffrey I. Binder (incorporated by reference from Exhibit 10.3 in the Company's Current Report on Form 8-K filed with the SEC on August 24, 2017). | |
10.37 | Convertible Promissory Note dated August 23, 2017 in favor of Jeffrey I. Binder (incorporated by reference from Exhibit 10.4 in the Company's Current Report on Form 8-K filed with the SEC on August 24, 2017). | |
10.38 | Amendment #5 to Convertible Promissory Note Issued on March 18, 2016 dated August 23, 2017 (incorporated by reference from Exhibit 10.1 in the Company's Current Report on Form 8-K filed with the SEC on August 24, 2017). | |
21.1 | ||
31.1 | ||
31.2 | ||
32.1 | ||
101.INS | XBRL Instance Document* | |
101.SCH | XBRL Taxonomy Extension Schema Document* | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document* | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document* |
CLS HOLDINGS USA, INC. | |||
Date: August | By: | /s/ Jeffrey I. Binder | |
Jeffrey I. Binder | |||
Chairman, President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) |
Name and Signature | Title | Date | ||
/s/ Jeffrey I. Binder | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer and Principal Financial Officer) | August | ||
Jeffrey I. Binder | ||||
/s/ Frank Koretsky | Director | August | ||
Frank Koretsky | ||||