Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
May 31, 2020 | Jul. 13, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | Q BIOMED INC. | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2020 | |
Amendment Flag | false | |
Entity Central Index Key | 0001596062 | |
Current Fiscal Year End Date | --11-30 | |
Entity Common Stock, Shares Outstanding | 22,706,025 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | QBIO | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | May 31, 2020 | Nov. 30, 2019 |
Current assets: | ||
Cash | $ 3,019,841 | $ 172,636 |
Accounts receivable | 11,500 | 0 |
Prepaid expenses and other current assets | 172,775 | 17,662 |
Total current assets | 3,204,116 | 190,298 |
Intangible assets, net | 425,000 | 450,000 |
Total Assets | 3,629,116 | 640,298 |
Current liabilities: | ||
Accounts payable | 350,650 | 652,051 |
Accrued expenses | 1,029,481 | 1,145,660 |
Accrued expenses - related party | 4,000 | 7,500 |
Accrued interest payable | 35,265 | 189,801 |
Convertible note payable, net | 96,682 | 3,243,292 |
Total current liabilities | 1,516,078 | 5,238,304 |
Long-term liabilities: | ||
Convertible notes payable, net | 447,335 | |
Total long term liabilities | 447,335 | |
Total Liabilities | 1,516,078 | 5,685,639 |
Commitments and Contingencies (Note 6) | ||
Stockholders' Equity (Deficit): | ||
Preferred stock, $0.001 par value; 100,000,000 shares authorized as of May 31, 2020 and November 30, 2019 | ||
Common stock, $0.001 par value; 250,000,000 shares authorized; 22,650,685 and 19,709,068 shares issued and outstanding as of May 31, 2020 and November 30, 2019, respectively | 22,650 | 19,709 |
Additional paid-in capital | 45,219,938 | 37,328,827 |
Accumulated deficit | (50,198,142) | (42,393,877) |
Total Stockholders' Equity (Deficit) | 2,113,038 | (5,045,341) |
Total Liabilities and Stockholders' Equity (Deficit) | 3,629,116 | $ 640,298 |
Convertible Series A Preferred Stock | ||
Stockholders' Equity (Deficit): | ||
Preferred stock, $0.001 par value; 100,000,000 shares authorized as of May 31, 2020 and November 30, 2019 | 2,144,246 | |
Convertible Series B Preferred Stock | ||
Stockholders' Equity (Deficit): | ||
Preferred stock, $0.001 par value; 100,000,000 shares authorized as of May 31, 2020 and November 30, 2019 | $ 4,924,346 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2020 | Nov. 30, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 22,650,685 | 19,709,068 |
Common stock, shares outstanding | 22,650,685 | 19,709,068 |
Convertible Series A Preferred Stock | ||
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, issued | 227,998 | 0 |
Preferred stock, outstanding | 227,998 | 0 |
Convertible Series B Preferred Stock | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 503,134 | 0 |
Preferred stock, outstanding | 503,134 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Condensed Consolidated Statements of Operations | ||||
Net Sales | $ 15,000 | $ 0 | $ 15,000 | $ 0 |
Cost of sales | 34,695 | 0 | 34,695 | 0 |
Gross loss | (19,695) | 0 | (19,695) | 0 |
Operating expenses: | ||||
General and administrative expenses | 1,598,235 | 1,195,759 | 7,168,206 | 2,438,470 |
Research and development expenses | 20,329 | 1,071,416 | 283,201 | 1,886,115 |
Total operating expenses | 1,618,564 | 2,267,175 | 7,451,407 | 4,324,585 |
Loss from operations | (1,638,259) | (2,267,175) | (7,471,102) | (4,324,585) |
Other (income) expenses: | ||||
Interest expense | 85,085 | 369,972 | 282,601 | 660,644 |
Change in fair value of embedded derivatives | 107,685 | 251,000 | 19,163 | 278,000 |
Loss on debt extinguishment | 31,399 | 0 | 31,399 | 0 |
Total other expenses | 224,169 | 620,972 | 333,163 | 938,644 |
Net loss attributable to common stockholders | (1,862,428) | (2,888,147) | (7,804,265) | (5,263,229) |
Accumulated dividend on convertible preferred stock | (84,472) | 0 | (84,472) | 0 |
Deemed dividend on convertible preferred stock due to beneficial conversion feature | (482,945) | 0 | (482,945) | 0 |
Net Income (Loss) Available to Common Stockholders, Basic, Total | $ (2,429,845) | $ (2,888,147) | $ (8,371,682) | $ (5,263,229) |
Net loss per share - basic and diluted | $ (0.11) | $ (0.20) | $ (0.39) | $ (0.36) |
Weighted average shares outstanding, basic and diluted | 22,174,051 | 14,577,312 | 21,247,998 | 14,491,881 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Shareholders' Equity (Deficit) - USD ($) | Common Stock | Additional Paid in CapitalSeries A convertible preferred stock | Additional Paid in CapitalSeries B convertible preferred stock | Additional Paid in Capital | Accumulated Deficit | Series A convertible preferred stock | Series B convertible preferred stock | Total |
Beginning balance, Shares at Nov. 30, 2018 | 14,290,236 | |||||||
Beginning balance, Amount at Nov. 30, 2018 | $ 14,290 | $ 31,994,129 | $ (32,114,147) | $ (105,728) | ||||
Share based compensation for services, Amount | $ 386 | 1,008,095 | 1,008,481 | |||||
Share based compensation for services, Shares | 386,900 | |||||||
Net loss | (5,263,229) | (5,263,229) | ||||||
Ending balance, Shares at May. 31, 2019 | 14,677,136 | |||||||
Ending balance, Amount at May. 31, 2019 | $ 14,676 | 33,002,224 | (37,377,376) | (4,360,476) | ||||
Beginning balance, Shares at Feb. 28, 2019 | 14,466,155 | |||||||
Beginning balance, Amount at Feb. 28, 2019 | $ 14,465 | 32,477,729 | (34,489,229) | (1,997,035) | ||||
Share based compensation for services, Amount | $ 211 | 524,495 | 524,706 | |||||
Share based compensation for services, Shares | 210,981 | |||||||
Net loss | (2,888,147) | (2,888,147) | ||||||
Ending balance, Shares at May. 31, 2019 | 14,677,136 | |||||||
Ending balance, Amount at May. 31, 2019 | $ 14,676 | 33,002,224 | (37,377,376) | (4,360,476) | ||||
Beginning balance, Shares at Nov. 30, 2019 | 19,709,068 | |||||||
Beginning balance, Amount at Nov. 30, 2019 | $ 19,709 | 37,328,827 | (42,393,877) | (5,045,341) | ||||
Issuance of Series A and Series B preferred stock for cash, Amount | $ 975,000 | $ 2,975,000 | 3,950,000 | |||||
Number of shares issued for cash | 100,000 | 300,000 | ||||||
Issuance of Series A and Series B preferred stock to convert notes payable, Amount | $ 1,279,980 | $ 2,031,340 | 3,311,320 | |||||
Issuance of Series A and Series B preferred stock to convert notes payable, Shares | 127,998 | 203,134 | ||||||
Offering cost related issuance of Series A and Series B preferred stock | 277,200 | $ (138,600) | $ (138,600) | |||||
Cashless warrants exercise, Amount | $ 21 | (21) | ||||||
Cashless warrants exercise, Shares | 20,860 | |||||||
Beneficial conversion feature of convertible preferred stock | $ 252,786 | $ 230,159 | (252,786) | (230,159) | ||||
Deemed dividends related to immediate accretion of beneficial conversion feature of convertible preferred stock | (252,786) | (230,159) | 252,786 | 230,159 | ||||
Accumulated dividend on convertible preferred stock | (84,472) | $ 27,866 | $ 56,606 | |||||
Share based compensation for services, Amount | $ 109 | 4,710,907 | 4,711,016 | |||||
Share based compensation for services, Shares | 109,559 | |||||||
Share based compensation related to warrants modification, Amount | 255,008 | 255,008 | ||||||
Issuance of common stock to convert notes payable | $ 2,811 | 2,732,489 | 2,735,300 | |||||
Issuance of common stock to convert notes payable, Shares | 2,811,198 | |||||||
Net loss | (7,804,265) | (7,804,265) | ||||||
Ending balance, Shares at May. 31, 2020 | 22,650,685 | 227,998 | 503,134 | |||||
Ending balance, Amount at May. 31, 2020 | $ 22,650 | 45,219,938 | (50,198,142) | $ 2,144,246 | $ 4,924,346 | 2,113,038 | ||
Beginning balance, Shares at Feb. 29, 2020 | 21,308,271 | |||||||
Beginning balance, Amount at Feb. 29, 2020 | $ 21,308 | 43,083,816 | (48,335,714) | (5,230,590) | ||||
Issuance of Series A and Series B preferred stock for cash, Amount | $ 975,000 | $ 2,975,000 | 3,950,000 | |||||
Number of shares issued for cash | 100,000 | 300,000 | ||||||
Issuance of Series A and Series B preferred stock to convert notes payable, Amount | $ 1,279,980 | $ 2,031,340 | 3,311,320 | |||||
Issuance of Series A and Series B preferred stock to convert notes payable, Shares | 127,998 | 203,134 | ||||||
Offering cost related issuance of Series A and Series B preferred stock | 277,200 | $ (138,600) | $ (138,600) | |||||
Beneficial conversion feature of convertible preferred stock | 252,786 | 230,159 | (252,786) | (230,159) | ||||
Deemed dividends related to immediate accretion of beneficial conversion feature of convertible preferred stock | $ (252,786) | $ (230,159) | 252,786 | 230,159 | ||||
Accumulated dividend on convertible preferred stock | (84,472) | $ 27,866 | $ 56,606 | |||||
Share based compensation for services, Amount | $ 49 | 195,680 | 195,729 | |||||
Share based compensation for services, Shares | 49,418 | |||||||
Share based compensation related to warrants modification, Amount | 149,520 | 149,520 | ||||||
Issuance of common stock to convert notes payable | $ 1,293 | 1,598,194 | 1,599,487 | |||||
Issuance of common stock to convert notes payable, Shares | 1,292,996 | |||||||
Net loss | (1,862,428) | (1,862,428) | ||||||
Ending balance, Shares at May. 31, 2020 | 22,650,685 | 227,998 | 503,134 | |||||
Ending balance, Amount at May. 31, 2020 | $ 22,650 | $ 45,219,938 | $ (50,198,142) | $ 2,144,246 | $ 4,924,346 | $ 2,113,038 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Cash Flows - USD ($) | 6 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (7,804,265) | $ (5,263,229) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Share based compensation for services | 4,711,016 | 1,008,481 |
Share based compensation related to warrants modification | 255,008 | 0 |
Change in fair value of embedded conversion option | 19,163 | 278,000 |
Accretion of debt discount | 133,291 | 518,340 |
Amortization expense | 25,000 | 25,000 |
Loss on debt extinguishment | 31,399 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (11,500) | 0 |
Prepaid expenses and other current assets | (115,113) | (16,046) |
Accounts payable and accrued expenses | (421,080) | 720,861 |
Accrued interest payable | 149,286 | 142,145 |
Net cash used in operating activities | (3,067,795) | (2,586,448) |
Cash flows from financing activities: | ||
Proceeds from issuance of Series A and Series B convertible preferred stock, net of issuance costs | 3,950,000 | 0 |
Proceeds received from issuance of convertible note | 1,965,000 | 0 |
Proceeds from investor advances | 0 | 80,750 |
Net cash provided by financing activities | 5,915,000 | 80,750 |
Net increase (decrease) in cash | 2,847,205 | (2,505,698) |
Cash at beginning of period | 172,636 | 2,684,413 |
Cash at end of the period | 3,019,841 | 178,715 |
Supplemental disclosures: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosures for noncash investing and financing activities: | ||
Issuance of preferred stock to convert notes debt along with interest | 2,735,300 | 0 |
Issuance of Series A and Series B preferred stock in exchange for outstanding convertible notes payable and accrued interest | 3,311,320 | 0 |
Accumulated dividend on convertible preferred stock | $ 84,472 | $ 0 |
Organization of the Company and
Organization of the Company and Description of the Business | 6 Months Ended |
May 31, 2020 | |
Organization of the Company and Description of the Business | |
Organization of the Company and Description of the Business | Note 1 - Organization of the Company and Description of the Business Q BioMed Inc. (“Q BioMed”) and its wholly owned subsidiaries Q BioMed Cayman SEZC and QBMG Q BioMed Germany UG (collectively, “the Company”), is a biomedical acceleration and development company focused on licensing, acquiring and providing strategic resources to life sciences and healthcare companies. Q BioMed intends to mitigate risk by acquiring multiple assets over time and across a broad spectrum of healthcare related products, companies and sectors. The Company intends to develop these assets to provide returns via organic growth, revenue production, out-licensing, sale or spinoff new public companies. The accompanying condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. |
Financial Condition, Going Conc
Financial Condition, Going Concern and Management Plans | 6 Months Ended |
May 31, 2020 | |
Financial Condition, Going Concern and Management Plans | |
Financial Condition, Going Concern and Management Plans | Note 2 – Financial Condition, Going Concern and Management Plans The Company currently operates in one business segment focusing on licensing, acquiring and providing strategic resources to life sciences and healthcare companies. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the entire business. The Company does not currently operate any separate lines of business. The accompanying condensed consolidated financial statements are prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has and is expected to incur net losses and cash outflows from operations in pursuit of extracting value from its acquired intellectual property. These matters, amongst others, raise doubt about the Company’s ability to continue as a going concern. The Company does not generate material revenue from operations since inception and has limited assets upon which to commence its business operations. Management anticipates that the Company will have to raise additional funds and/or generate significant revenue from drug sales within twelve months to continue operations. Additional funding will be needed to implement the Company’s business plan that includes various expenses such as fulfilling our obligations under licensing agreements, legal, operational set-up, general and administrative, marketing, employee salaries and other related start-up expenses. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. If the Company is unable to raise sufficient funds, management will be forced to scale back the Company’s operations or cease its operations. Management has determined that there is substantial doubt about the Company's ability to continue as a going concern within one year after the condensed consolidated financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
May 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 3 - Summary of Significant Accounting Policies Basis of Presentation The accompanying interim period unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. These condensed consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended November 30, 2019. Certain disclosures included in the annual financial statements have been condensed or omitted from these financial statements as they are not required for interim financial statements under U.S. GAAP and the rules of the SEC. These unaudited consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These adjustments are of a normal, recurring nature. Interim period operating results may not be indicative of the operating results for a full year. The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended November 30, 2019 included in the Company’s Form 10-K. Revenue Recognition The core principle of Topic 606 (FASB ASC 606) is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revenue recognition guidance contained in Topic 606, to follow the five-step revenue recognition model along with other guidance impacted by this standard: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transportation price; (4) allocate the transportation price; (5) recognize revenue when or as the entity satisfies a performance obligation. Previous practices were broadly consistent with this approach, and the company determined the amount of revenue based on the amount customer paid or promised to pay. The Company satisfies its performance obligation to deliver products when the customer has received the products, which is when title to the goods has transferred and the customer has control of the products. Payments from customers are generally received within 90 days of when the product is delivered. Because the Company’s agreements have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash held in banks, accounts receivable and note receivable. Cash is maintained in accounts with financial institutions, which, at times may exceed the federal depository insurance coverage of $250,000. At May 31, 2020, the Company has not experienced losses on these cash accounts. The Company sells its product through a global marketer wholesale distributors and specialty contracted pharmacies on 90-day or better payment terms. The Company continuously monitor the creditworthiness of our customers and have internal policies regarding customer credit limits. The Company estimates an allowance for doubtful accounts primarily based on historical payment patterns, aging of receivable balances and general economic conditions. Have not experienced any credit losses to-date. Recent Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. Recently Adopted Standards On February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Under the new guidance, lessees will be required to recognize all leases (with the exception of short-term leases) on the balance sheet as a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee¹s right to use, or control the use of, a specified asset for the lease term. The Company adopted ASC 842 on December 1, 2019, using the optional transition method to apply the new guidance as of December 1, 2019, rather than as of the earliest period presented, and elected the package of practical expedients described above. The adoption of this standard on December 1, 2019 did not impact the Company’s condensed consolidated financial statements as the Company is not subject to any lease agreements on December 1, 2019. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The ASU allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted classified as liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, such as warrants, an entity will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The adoption of this standard on December 1, 2019, did not impact the Company’s condensed consolidated financial statements. |
Loss per share
Loss per share | 6 Months Ended |
May 31, 2020 | |
Loss per share | |
Loss per share | Note 4 – Loss per share Basic net loss per share was calculated by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period. Diluted net loss per share was calculated by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive. The table below summarizes potentially dilutive securities that were not considered in the computation of diluted net loss per share because they would be anti-dilutive. Potentially dilutive securities May 31, 2020 November 30, 2019 Series A convertible preferred stock 2,280,000 — Series B convertible preferred stock 2,997,000 — Warrants 9,801,000 7,180,000 Stock Options 1,350,000 1,200,000 Convertible Notes 54,000 5,732,000 Potentially dilutive securities 16,482,000 14,112,000 |
Convertible Notes
Convertible Notes | 6 Months Ended |
May 31, 2020 | |
Convertible Notes | |
Convertible Notes | Note 5 - Convertible Notes May 31, 2020 November 30, 2019 Convertible Notes Payable, current: Principal value of 2018 Debenture $ — $ 2,730,000 Fair value of bifurcated contingent put option — 74,000 Debt discount — (61,000) Carrying value of 2018 Debenture — 2,743,000 Principal value of 2019 August Debenture 100,000 550,000 Debt discount (3,000) (50,000) Carrying value of 2019 August Debenture 97,000 500,000 Total carrying value of convertible notes payable, current $ 97,000 $ 3,243,000 Convertible Notes Payable, long-term: Principal value of 2019 October Debenture $ — $ 500,000 Fair value of bifurcated contingent put option — 29,000 Debt discount — (82,000) Carrying value of 2019 October Debenture — 447,000 Total carrying value of convertible notes, long-term $ — $ 447,000 During the six months ended May 31, 2020, the Company raised approximately $2.0 million from issuance of various debentures (the “Debentures”). The Debentures have a maturity date of June 6, 2021. The Debentures bear interest at the rate of 5.5% per annum, and on issuance, the Company paid to the holder a commitment fee equal to 2.5% of the amount of the Debentures. The Debentures may be converted at any time on or prior to maturity at the lower of $3.00 or 93% of the average of the four lowest daily VWAPs during the 10 consecutive trading days immediately preceding the conversion date, provided that as long as we are not in default under the Debenture, the conversion price may never be less than $2.00. Any time after the six-month anniversary of the issuance of the Debentures that the daily VWAP is less than $2.00 for a period of twenty consecutive trading days (the “Triggering Date”) and only for so long as such conditions exist after a Triggering Date, the Company shall make monthly payments beginning on the last calendar day of the month when the Triggering Date occurred. Each monthly payment shall be in an amount equal to the sum of (i) the principal amount outstanding as of the Triggering Date divided by the number of such monthly payments until maturity, (ii) a redemption premium of 20% in respect of such principal amount and (iii) accrued and unpaid interest hereunder as of each payment date. The Company may, no more than twice, obtain a thirty-day deferral of a monthly payment due as a result of a Triggering Date through the payment of a deferral fee in the amount equal to 10% of the total amount of such monthly payment. Each deferral payment may be paid at the option of the Company in cash or by the issuance of such number of shares as is equal to the applicable deferral payment divided by a price per share equal to 93% of the average of the four lowest daily VWAPs during the 10 consecutive Trading Days immediately preceding the due date in respect of such monthly payment being deferred, provided that such shares issued will be immediately freely tradable shares in the hands of the holder. Upon issuance of the Debentures, the Company recognized a debt discount of approximately $331,000, resulting from the recognition of issuance costs of $35,000 and a bifurcated embedded derivative of $296,000. The monthly payment provision within the Debentures is a contingent put option that is required to be separately measured at fair value, with subsequent changes in fair value recognized in the Condensed Consolidated Statement of Operations. The fair value estimate is a Level 3 measurement. The Company estimated the fair value of the monthly payment provision by estimating the probability of the occurrence of a Triggering Date and applying the probability to the discounted maximum redemption premium for any given payment with the following key inputs: January 15, 2020 December 6, 2019 Strike price $ 3.00 $ 3.00 Terms (years) 1.4 1.5 Volatility 97 % 98 % Risk-free rate 1.7 % 1.6 % Dividend yield 0 % 0 % The following table summarizes key inputs for embedded convers features on the date of conversions: Conversion Date Strike price $1.00 - $3.00 Terms (years) 0.8 Volatility 126 % Risk-free rate 0.2 % Dividend yield 0 % As of May 31, 2020, there are no notes outstanding with embedded conversion features. Debt Conversion The following table summarizes debt conversion during the six months ended May 31, 2020: Principal value of 2018 Debenture $ 2,730,000 Remaining debt discount (28,000) Accrued interest 223,000 Fair value of bifurcated contingent put option 126,000 Sub-total 3,051,000 Principal value of 2019 Debenture 1,950,000 Remaining debt discount (220,000) Accrued interest 58,000 Fair value of bifurcated contingent put option 157,000 Sub-total 1,945,000 Principal value of 2020 Debenture 1,000,000 Remaining debt discount (140,000) Accrued interest 22,000 Fair value of bifurcated contingent put option 137,000 Sub-total 1,019,000 Total debt conversion amount 6,015,000 Fair value of Series A convertible preferred stock issued (127,998 shares) 1,280,000 Fair value of Series B convertible preferred stock issued (2,031,340 shares) 2,031,000 Fair value of common stock issued (2,811,198 shares) 2,735,000 Loss on debt extinguishment during the six months ended May 31, 2020 $ (31,000) Interest expense Interest expense, included in the accompanying Condensed Consolidated Statements of Operations, is comprised of the following for each period presented: For the Three Months ended For the Six Months ended May 31, 2020 May 31, 2019 May 31, 2020 May 31, 2019 Interest expense based on the coupon interest rate of the outstanding debt $ 43,000 $ 88,000 $ 150,000 $ 143,000 Accretion of debt discount 42,000 282,000 133,000 518,000 Total interest expense $ 85,000 $ 370,000 $ 283,000 $ 661,000 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
May 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 6 - Commitments and Contingencies Legal Periodically, the Company reviews the status of significant matters, if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation. Advisory Agreements The Company entered into customary consulting arrangements with various counterparties to provide consulting services, business development and investor relations services, pursuant to which the Company agreed to issue shares of common stock as services are received. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
May 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | Note 7 - Related Party Transactions The Company entered into consulting agreements with certain management personnel and stockholders for consulting and legal services. Consulting and legal expenses resulting from such agreements were included within general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations as follows: For the Three Months ended For the Six Months ended May 31, 2020 May 31, 2019 May 31, 2020 May 31, 2019 Consulting and legal expenses $ 105,000 $ 90,000 $ 210,000 $ 192,000 |
Stockholders' Equity Deficit
Stockholders' Equity Deficit | 6 Months Ended |
May 31, 2020 | |
Stockholders' Equity Deficit | |
Stockholders' Equity Deficit | Note 8 - Stockholders’ Equity Deficit Common Shares Issuance of shares for services During the six months ended May 31, 2020, the Company issued an aggregate of 0.1 million shares of the Company common stock to various vendors for advisory services, valued at approximately $0.2 million based on the estimated fair market value of the stock on the date of grant and was recognized within general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations. Preferred Shares Amendments to Articles of Incorporation or Bylaws On April 3, 2020, the Company’s Board of Directors authorized the creation of up to 500,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Shares”) and up to 1,000,000 shares of Series B Convertible Preferred Stock (the “Series B Preferred Shares”). On April 6, 2020, the Company filed a Certificate of Designations with the Secretary of Nevada creating such Series A and Series B Preferred Shares (collectively, the “Preferred Shares”). The original issue price and the liquidation value per share, as of May 31, 2020, of each class of preferred stock is as follows: Original Issue Price Liquidation Value Per Share Per Share Series A Preferred Share $ 10.00 $ 10.12 Series B Preferred Share $ 10.00 $ 10.11 The following is a summary of the rights of the holders of the Preferred Shares: Voting . Except to the extent required by law, the holders of the Preferred Shares do not have the right to vote on the matters that the holders of the common stock have the right to vote upon. The holders of the Preferred Shares may vote upon matters affecting the Preferred Shares, provided that if the vote concerns all Preferred Shares, the holders of the Series A Preferred Shares shall vote together with the holders of the Series B Preferred Shares. Liquidation . The holders of the Preferred Shares have a liquidation preference over the holders of the common stock. Such preference consists of the right to receive upon the Company’s voluntary or involuntary liquidation, dissolution or winding up the liquidation value of each Series A and Series B Preferred Share prior to the payment of any amounts to the holders of the common stock. The liquidation value of each Series A and Series B Preferred Share shall be equal to $10 plus any accrued but unpaid dividends thereon. Dividends . Every three months, the Company is required to pay each holder of Preferred Shares a dividend equal to 2% of the liquidation value of such shares (which is equal to 8% on annual basis). Such dividends shall be paid in shares of the Company’s common stock in an amount equal to the dollar amount of such payment divided by the VWAP of the Company’s common stock on the date that such dividend payment is due, provided that the Company may not issue such shares of common stock if such share issuance would cause the holder to beneficially own more than 9.99% of the Company’s common stock. Conversion of Series A Preferred Shares . Each Series A Preferred Share may be converted into shares of the Company’s common stock in an amount that is equal to the liquidation value divided by $1.00. The Company may force the conversion of the Series A Preferred Shares if each of the following conditions (the “Forced Equity Conditions”) has been met: (i) on each trading day during the period beginning ten trading days prior to the forced conversion (the "Equity Conditions Measuring Period"), the VWAP of the Company’s common stock is in excess of $5.00, (ii) on each trading day during Equity Conditions Measuring Period, the dollar volume of the Company’s common stock traded is in excess of $750,000, (iii) on each day during the Equity Conditions Measuring Period, the shares of the Company’s common stock underlying the Series A Preferred Shares to be converted shall either (x) be registered for resale on an effective registration statement or (y) eligible for resale without restriction and without the need for registration under any applicable federal or state securities laws, (iv) on each day during the Equity Conditions Measuring Period, the Company’s common stock is designated for quotation on the Company’s principal market and shall not have been suspended from trading on such exchange or market nor shall delisting or suspension by such exchange or market been threatened or pending either (A) in writing by such exchange or market or (B) by falling below the then effective minimum listing maintenance requirements of such exchange or market; and (v) during the Equity Conditions Measuring Period, there shall not have occurred either (A) an Event of Default or (B) an event that with the passage of time or giving of notice would constitute an Event of Default. Conversion of Series B Preferred Shares . Each Series B Preferred Share may be converted into shares of the Company’s common stock in an amount that is equal to the liquidation value divided by the applicable conversion rate. The conversion rate shall be the lower of: (a) $2.70 or (b) 93% of the average of the four lowest daily VWAPs during the 10 consecutive trading days immediately preceding the conversion date, provided that the conversion price may not be less than $1.00; further provided that if the VWAP of the Company’s common stock for any 40 consecutive trading days is less than $1.00 for 30 of those days, then such floor conversion price shall be reduced from $1.00 to $0.35. The Company may not issue shares of common stock upon pursuant to the conversions discussed above if such conversion would cause a holder to beneficially own more than 9.99% of our then outstanding common stock. Financing Agreements On April 6, 2020, the Company entered into a securities purchase agreement (the “SPA”) with accredited investors (the “Investors”). Pursuant to the SPA, the Company issued the following securities: · 127,998 shares of Series A Convertible Preferred Stock (the “Series A”) in exchange for convertible debentures with principal and interest of approximately $1.3 million; · 100,000 Series A Preferred Shares for cash of $1.0 million, · 203,134 shares of Series B Convertible Preferred Stock (‘the “Series B”) in exchange for convertible debentures with principal and interest of approximately $2.0 million; · 300,000 Series B Preferred Shares for cash of $3.0 million The fair value of the Company’s common stock price on the issuance date is higher than the effective conversion price of both the Series A Preferred Shares and the Series B Preferred Shares (collectively, the “Preferred Shares”), therefore the Company recorded a beneficial conversion feature (“BCF”) of approximately $483,000 on the Preferred Shares. The discount to the aggregate stated value of the Preferred Shares, resulting from recognition of the BCF was immediately accreted as a reduction of additional paid-in capital and an increase in the carrying value of the Preferred Shares. The accretion is presented in the Consolidated Statement of Operations as a deemed dividend, increasing net loss to arrive at net loss attributable to common stockholders. The Company had accumulated dividend payable on the Preferred Shares of approximately $84,000 as of May 31, 2020. |
Warrants and Options
Warrants and Options | 6 Months Ended |
May 31, 2020 | |
Warrants and Options | |
Warrants and Options | Note 9 – Warrants and Options Summary of warrants The following represents a summary of all outstanding warrants to purchase the Company’s common stock, including warrants issued to vendors for services and warrants issued as part of the units sold in the private placements, at May 31, 2020 and the changes during the period then ended: Weighted Average Weighted Remaining Average Contractual Warrants Exercise Price Life (years) Intrinsic Value Outstanding at December 1, 2019 7,180,000 $ 2.22 3.2 $ 2,463,000 Issued 3,065,000 2.13 4.5 — Cashless exercise (30,000) 0.86 — — Forfeited/expired (414,000) 3.95 — — Outstanding at May 31, 2020 9,801,000 $ 2.11 3.4 $ 3,440,000 Exercisable at May 31, 2020 9,776,000 $ 2.11 3.4 $ 3,440,000 During the six months ended May 31, 2020, the Company issued 1,500,000 warrants to the Company’s two officers in exchange for services rendered. The warrants are exercisable into shares of the Company’s common stock in six months from their issuance until five years from the date of issuance at an exercise price of $2.12 per share. During the six months ended May 31, 2020, the Company issued 901,000 warrants to certain consultants and service providers in exchange for services rendered. The warrants are exercisable into shares of the Company’s common stock between 3-5 years from the date of issuance at an exercise price between $2.00 to $2.12 per share. During the six months ended May 31, 2020, the Company issued 250,000 warrants to certain consultants for legal services provided regarding issuance of Preferred Shares and preparation of registration statement. The warrants are exercisable into shares of the Company’s common stock in six months from their issuance until five years from the date of issuance at an exercise price of $2.12 per share. The Company recorded approximately $0.1 million as a direct offering cost in Stockholders’ equity with a net effect of zero. The following assumptions were used to compute the fair value of warrants granted during the six months ended May 31, 2020: For the Six Months ended May 31, 2020 Strike price $ 2.12 Term (years) Volatility 120 % Risk-free rate 1.3 % Dividend yield 0.0 % Modification of Warrants On February 12, 2020, the Company modified an aggregated of 245,625 warrants that were originally granted to certain investors and consultants. The exercise price of the Warrants was reduced to $2.33 per share and the term of the warrants were extended for 2 years from the original maturity date. The Company received $20,000 cash from one of the investors as consideration for this modification. On May 1, 2020, the Company modified an aggregated of 168,000 warrants that were originally granted to certain consultants. The exercise price of the warrants was reduced to $2.00 per share and the term of the warrants were extended for 2-3 years from the original maturity date. The Company immediately recognized approximately $0.1 million and $0.2 million of incremental stock-based compensation for the modifications during the three and six months ended May 31, 2020, respectively based on the following weighted average assumptions: After Modification Before Modification Strike price $ 2.20 $ 4.20 Term (years) 3.7 1.5 Volatility 124 % 164 % Risk-free rate 0.9 % 1.1 % Dividend yield 0.0 % 0.0 % Options Issued for Services The following represents a summary of all outstanding options to purchase the Company’s common stock at May 31, 2020 and the changes during the period then ended: Weighted Average Weighted Remaining Average Contractual Options Exercise Price Life (years) Intrinsic Value Outstanding at December 1, 2019 1,200,000 $ 1.35 3.4 $ 453,000 Issued 150,000 1.50 4.5 — Outstanding at May 31, 2020 1,350,000 $ 1.37 3.1 $ 769,000 Exercisable at May 31, 2020 1,260,000 $ 1.36 2.9 $ 735,000 Stock-based Compensation The Company recognized general and administrative expenses of approximately $4.7 million and $0.3 million as a result of the shares, outstanding warrants and options issued to consultants and employees during the six months ended May 31, 2020 and 2019, respectively. As of May 31, 2020, the estimated unrecognized stock-based compensation associate with these agreements is approximately $33,000 and will be fully recognized over the next 9 months. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
May 31, 2020 | |
Summary of Significant Accounting Policies | |
Revenue Recognition | Revenue Recognition The core principle of Topic 606 (FASB ASC 606) is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revenue recognition guidance contained in Topic 606, to follow the five-step revenue recognition model along with other guidance impacted by this standard: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transportation price; (4) allocate the transportation price; (5) recognize revenue when or as the entity satisfies a performance obligation. Previous practices were broadly consistent with this approach, and the company determined the amount of revenue based on the amount customer paid or promised to pay. The Company satisfies its performance obligation to deliver products when the customer has received the products, which is when title to the goods has transferred and the customer has control of the products. Payments from customers are generally received within 90 days of when the product is delivered. Because the Company’s agreements have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash held in banks, accounts receivable and note receivable. Cash is maintained in accounts with financial institutions, which, at times may exceed the federal depository insurance coverage of $250,000. At May 31, 2020, the Company has not experienced losses on these cash accounts. The Company sells its product through a global marketer wholesale distributors and specialty contracted pharmacies on 90-day or better payment terms. The Company continuously monitor the creditworthiness of our customers and have internal policies regarding customer credit limits. The Company estimates an allowance for doubtful accounts primarily based on historical payment patterns, aging of receivable balances and general economic conditions. Have not experienced any credit losses to-date. |
Recent Accounting Standards and Recently Adopted Standards | Recent Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. Recently Adopted Standards On February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Under the new guidance, lessees will be required to recognize all leases (with the exception of short-term leases) on the balance sheet as a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee¹s right to use, or control the use of, a specified asset for the lease term. The Company adopted ASC 842 on December 1, 2019, using the optional transition method to apply the new guidance as of December 1, 2019, rather than as of the earliest period presented, and elected the package of practical expedients described above. The adoption of this standard on December 1, 2019 did not impact the Company’s condensed consolidated financial statements as the Company is not subject to any lease agreements on December 1, 2019. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The ASU allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted classified as liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, such as warrants, an entity will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The adoption of this standard on December 1, 2019, did not impact the Company’s condensed consolidated financial statements. |
Loss per share (Tables)
Loss per share (Tables) | 6 Months Ended |
May 31, 2020 | |
Loss per share | |
Schedule of potentially dilutive securities not considered in the computation of diluted net loss per share | The table below summarizes potentially dilutive securities that were not considered in the computation of diluted net loss per share because they would be anti-dilutive. Potentially dilutive securities May 31, 2020 November 30, 2019 Series A convertible preferred stock 2,280,000 — Series B convertible preferred stock 2,997,000 — Warrants 9,801,000 7,180,000 Stock Options 1,350,000 1,200,000 Convertible Notes 54,000 5,732,000 Potentially dilutive securities 16,482,000 14,112,000 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 6 Months Ended |
May 31, 2020 | |
Convertible Notes | |
Schedule of convertible notes payable, current and long-term | May 31, 2020 November 30, 2019 Convertible Notes Payable, current: Principal value of 2018 Debenture $ — $ 2,730,000 Fair value of bifurcated contingent put option — 74,000 Debt discount — (61,000) Carrying value of 2018 Debenture — 2,743,000 Principal value of 2019 August Debenture 100,000 550,000 Debt discount (3,000) (50,000) Carrying value of 2019 August Debenture 97,000 500,000 Total carrying value of convertible notes payable, current $ 97,000 $ 3,243,000 Convertible Notes Payable, long-term: Principal value of 2019 October Debenture $ — $ 500,000 Fair value of bifurcated contingent put option — 29,000 Debt discount — (82,000) Carrying value of 2019 October Debenture — 447,000 Total carrying value of convertible notes, long-term $ — $ 447,000 |
Schedule of discounted maximum redemption premium | January 15, 2020 December 6, 2019 Strike price $ 3.00 $ 3.00 Terms (years) 1.4 1.5 Volatility 97 % 98 % Risk-free rate 1.7 % 1.6 % Dividend yield 0 % 0 % The following table summarizes key inputs for embedded convers features on the date of conversions: Conversion Date Strike price $1.00 - $3.00 Terms (years) 0.8 Volatility 126 % Risk-free rate 0.2 % Dividend yield 0 % |
Schedule of debt conversion | The following table summarizes debt conversion during the six months ended May 31, 2020: Principal value of 2018 Debenture $ 2,730,000 Remaining debt discount (28,000) Accrued interest 223,000 Fair value of bifurcated contingent put option 126,000 Sub-total 3,051,000 Principal value of 2019 Debenture 1,950,000 Remaining debt discount (220,000) Accrued interest 58,000 Fair value of bifurcated contingent put option 157,000 Sub-total 1,945,000 Principal value of 2020 Debenture 1,000,000 Remaining debt discount (140,000) Accrued interest 22,000 Fair value of bifurcated contingent put option 137,000 Sub-total 1,019,000 Total debt conversion amount 6,015,000 Fair value of Series A convertible preferred stock issued (127,998 shares) 1,280,000 Fair value of Series B convertible preferred stock issued (2,031,340 shares) 2,031,000 Fair value of common stock issued (2,811,198 shares) 2,735,000 Loss on debt extinguishment during the six months ended May 31, 2020 $ (31,000) |
Schedule of interest expense | For the Three Months ended For the Six Months ended May 31, 2020 May 31, 2019 May 31, 2020 May 31, 2019 Interest expense based on the coupon interest rate of the outstanding debt $ 43,000 $ 88,000 $ 150,000 $ 143,000 Accretion of debt discount 42,000 282,000 133,000 518,000 Total interest expense $ 85,000 $ 370,000 $ 283,000 $ 661,000 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
May 31, 2020 | |
Related Party Transactions | |
Schedule of general and administrative expenses | For the Three Months ended For the Six Months ended May 31, 2020 May 31, 2019 May 31, 2020 May 31, 2019 Consulting and legal expenses $ 105,000 $ 90,000 $ 210,000 $ 192,000 |
Stockholders' Equity Deficit (T
Stockholders' Equity Deficit (Tables) | 6 Months Ended |
May 31, 2020 | |
Stockholders' Equity Deficit | |
Schedule original issue price and the liquidation value per share for each class of preferred stock | The original issue price and the liquidation value per share, as of May 31, 2020, of each class of preferred stock is as follows: Original Issue Price Liquidation Value Per Share Per Share Series A Preferred Share $ 10.00 $ 10.12 Series B Preferred Share $ 10.00 $ 10.11 |
Warrants and Options (Tables)
Warrants and Options (Tables) | 6 Months Ended |
May 31, 2020 | |
Schedule of fair value outstanding warrants and options issued to non-employees for services | For the Six Months ended May 31, 2020 Strike price $ 2.12 Term (years) Volatility 120 % Risk-free rate 1.3 % Dividend yield 0.0 % After Modification Before Modification Strike price $ 2.20 $ 4.20 Term (years) 3.7 1.5 Volatility 124 % 164 % Risk-free rate 0.9 % 1.1 % Dividend yield 0.0 % 0.0 % |
Warrants | |
Summary of warrants | Weighted Average Weighted Remaining Average Contractual Warrants Exercise Price Life (years) Intrinsic Value Outstanding at December 1, 2019 7,180,000 $ 2.22 3.2 $ 2,463,000 Issued 3,065,000 2.13 4.5 — Cashless exercise (30,000) 0.86 — — Forfeited/expired (414,000) 3.95 — — Outstanding at May 31, 2020 9,801,000 $ 2.11 3.4 $ 3,440,000 Exercisable at May 31, 2020 9,776,000 $ 2.11 3.4 $ 3,440,000 |
Stock Options | |
Schedule of Options issued for services | Weighted Average Weighted Remaining Average Contractual Options Exercise Price Life (years) Intrinsic Value Outstanding at December 1, 2019 1,200,000 $ 1.35 3.4 $ 453,000 Issued 150,000 1.50 4.5 — Outstanding at May 31, 2020 1,350,000 $ 1.37 3.1 $ 769,000 Exercisable at May 31, 2020 1,260,000 $ 1.36 2.9 $ 735,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | May 31, 2020USD ($) |
Summary of Significant Accounting Policies | |
Federal depository insurance coverage | $ 250,000 |
Loss per share (Details)
Loss per share (Details) - shares | 6 Months Ended | 12 Months Ended |
May 31, 2020 | Nov. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities | 16,482,000 | 14,112,000 |
Series A convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities | 2,280,000 | |
Series B convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities | 2,997,000 | |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities | 9,801,000 | 7,180,000 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities | 1,350,000 | 1,200,000 |
Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities | 54,000 | 5,732,000 |
Convertible Notes (Details)
Convertible Notes (Details) - USD ($) | May 31, 2020 | Nov. 30, 2019 |
Notes and Loans Payable, Current [Abstract] | ||
Carrying value | $ 96,682 | $ 3,243,292 |
Total carrying value of convertible notes payable, current | 97,000 | 3,243,000 |
Notes and Loans, Noncurrent [Abstract] | ||
Principal value | 6,015,000 | |
Total carrying value of convertible notes, long-term | 447,335 | |
2018 Debentures | ||
Notes and Loans Payable, Current [Abstract] | ||
Principal value | 2,730,000 | |
Fair value of bifurcated contingent put option | 74,000 | |
Debt discount | (61,000) | |
Carrying value | 2,743,000 | |
Notes and Loans, Noncurrent [Abstract] | ||
Principal value | 3,051,000 | |
2019 August Debenture | ||
Notes and Loans Payable, Current [Abstract] | ||
Principal value | 100,000 | 550,000 |
Debt discount | (3,000) | (50,000) |
Carrying value | $ 97,000 | 500,000 |
2019 October Debenture | ||
Notes and Loans, Noncurrent [Abstract] | ||
Principal value | 500,000 | |
Fair value of bifurcated contingent put option | 29,000 | |
Debt discount | (82,000) | |
Carrying value | $ 447,000 |
Convertible Notes - Fair Value
Convertible Notes - Fair Value Measurement Inputs (Details) | May 31, 2020$ / shares | Jan. 15, 2020$ / shares | Dec. 06, 2019$ / shares |
Strike price | |||
Convertible Notes | |||
Input | 3 | 3 | |
Strike price | Minimum | |||
Convertible Notes | |||
Input | 1 | ||
Strike price | Maximum | |||
Convertible Notes | |||
Input | 3 | ||
Terms (years) | |||
Convertible Notes | |||
Input | 0.8 | 1.4 | 1.5 |
Volatility | |||
Convertible Notes | |||
Input | 126 | 97 | 98 |
Risk-free rate | |||
Convertible Notes | |||
Input | 0.2 | 1.7 | 1.6 |
Dividend yield | |||
Convertible Notes | |||
Input | 0 | 0 | 0 |
Convertible Notes - Summary of
Convertible Notes - Summary of debt conversion (Details) | 6 Months Ended |
May 31, 2020USD ($)shares | |
Total | $ 6,015,000 |
Issuance of preferred stock to convert notes debt along with interest (in shares) | shares | 0 |
Loss on debt extinguishment | $ (31,000) |
2018 Debentures | |
Principal value | 2,730,000 |
Remaining debt discount | (28,000) |
Accrued interest | 223,000 |
Fair value of bifurcated contingent put option | 126,000 |
Total | 3,051,000 |
2019 Debenture | |
Principal value | 1,950,000 |
Remaining debt discount | (220,000) |
Accrued interest | 58,000 |
Fair value of bifurcated contingent put option | 157,000 |
Total | 1,945,000 |
2020 Debenture | |
Principal value | 1,000,000 |
Remaining debt discount | (140,000) |
Accrued interest | 22,000 |
Fair value of bifurcated contingent put option | 137,000 |
Total | 1,019,000 |
Series A convertible preferred stock | |
Fair value of convertible shares | $ 1,280,000 |
Issuance of preferred stock to convert notes debt along with interest (in shares) | shares | 127,998 |
Series B convertible preferred stock | |
Fair value of convertible shares | $ 2,031,000 |
Issuance of preferred stock to convert notes debt along with interest (in shares) | shares | 2,031,340 |
Common Stock | |
Fair value of convertible shares | $ 2,735,000 |
Issuance of preferred stock to convert notes debt along with interest (in shares) | shares | 2,811,198 |
Convertible Notes - Interest ex
Convertible Notes - Interest expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Convertible Notes | ||||
Interest expense based on the coupon interest rate of the outstanding debt | $ 43,000 | $ 88,000 | $ 150,000 | $ 143,000 |
Accretion of debt discount | 42,000 | 282,000 | 133,000 | 518,000 |
Total interest expense | $ 85,000 | $ 370,000 | $ 283,000 | $ 661,000 |
Convertible Notes - Additional
Convertible Notes - Additional Information (Details) | 6 Months Ended | |
May 31, 2020USD ($)D$ / sharesshares | May 31, 2019USD ($) | |
Debt Instruments [Line Items] | ||
Embedded conversion option has a fair value | $ (19,163) | $ (278,000) |
Number of notes outstanding with embedded conversion features | shares | 0 | |
Debentures | ||
Debt Instruments [Line Items] | ||
Issue Of Debentures, Amount | $ 2,000,000 | |
Conversion price | $ / shares | $ 2 | |
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | |
Commitment fee (as percent) | 2.50% | |
Debt discount | $ 331,000 | |
Embedded conversion option has a fair value | $ 296,000 | |
Percent of average of the four lowest daily VWAPs during the 10 consecutive trading days | 93.00% | |
Redemption premium (as percent) | 20.00% | |
Loss on extinguishment of debt | $ 35,000 | |
Percent of monthly payment of deferral fee | 10.00% | |
Percentage of average of the four lowest daily VWAPs on basis of which conversion price is reduced | 93.00% | |
Number of lowest daily VWAPs during the 10 consecutive trading days on basis of which conversion price is reduced | 4 | |
Number of consecutive trading days on basis of which conversion price is reduced | D | 10 | |
Debentures | Maximum | ||
Debt Instruments [Line Items] | ||
Conversion price | $ / shares | $ 3 | |
Debentures | Minimum | ||
Debt Instruments [Line Items] | ||
Conversion price | $ / shares | $ 2 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Related Party Transactions | ||||
Consulting and legal expenses | $ 105,000 | $ 90,000 | $ 210,000 | $ 192,000 |
Stockholders' Equity Deficit (D
Stockholders' Equity Deficit (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | Apr. 03, 2020 | Nov. 30, 2019 | |
Share based compensation for services, Amount | $ 195,729 | $ 524,706 | $ 4,711,016 | $ 1,008,481 | ||
Number of preferred shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||
Preferred shares dividend (as a percent) | 2.00% | |||||
Annual preferred shares dividend (as a percent) | 8.00% | |||||
Percentage of beneficial ownership | 9.99% | 9.99% | ||||
Series A convertible preferred stock | ||||||
Number of preferred shares authorized | 500,000 | |||||
Original Issue Price Per Share | $ 10 | $ 10 | ||||
Liquidation Value Per Share | 10.12 | 10.12 | ||||
Liquidation value per share before accrued but unpaid dividends thereon | 10 | |||||
Series B convertible preferred stock | ||||||
Number of preferred shares authorized | 1,000,000 | |||||
Original Issue Price Per Share | 10 | 10 | ||||
Liquidation Value Per Share | $ 10.11 | 10.11 | ||||
Liquidation value per share before accrued but unpaid dividends thereon | $ 10 | |||||
General and Administrative Expense | ||||||
Share based compensation for services, Shares | 100,000 | |||||
Share based compensation for services, Amount | $ 200,000 |
Stockholders' Equity Deficit -
Stockholders' Equity Deficit - Conversion of Series A preferred Shares (Details) - Series A convertible preferred stock | 6 Months Ended |
May 31, 2020USD ($)D$ / shares | |
Liquidation value | $ 1 |
Number of consecutive trading days | D | 10 |
VWAP of common stock | $ 5 |
Common shares trading value | $ | $ 750,000 |
Stockholders' Equity Deficit _2
Stockholders' Equity Deficit - Conversion of Series B Preferred Shares (Details) - Series B convertible preferred stock | 6 Months Ended |
May 31, 2020Ditem$ / shares | |
Conversion price | $ 2.70 |
Percentage of beneficial ownership | 9.99% |
10 Consecutive trading days | |
Conversion price | $ 1 |
Percent of average of the four lowest daily VWAPs during the 10 consecutive trading days | 93.00% |
Number of lowest daily VWAPS during the specified consecutive trading days | item | 4 |
Number of consecutive trading days | D | 10 |
40 Consecutive trading days | |
Conversion price | $ 1 |
Number of consecutive trading days | D | 40 |
Number of trading days | D | 30 |
Conversion price decrease | $ 0.35 |
Stockholders' Equity Deficit _3
Stockholders' Equity Deficit - Financing Agreements (Details) - USD ($) | Apr. 06, 2020 | May 31, 2020 | May 31, 2020 | May 31, 2019 |
Issuance of preferred stock to convert notes debt along with interest (in shares) | 0 | |||
Issuance of preferred stock to convert notes debt along with interest | $ 2,735,300 | $ 0 | ||
Preferred shares for cash | $ 3,950,000 | 3,950,000 | ||
Preferred stock | ||||
Amount of beneficial conversion option for convertible preferred shares | 483,000 | 483,000 | ||
Accumulated dividends payable | $ 84,000 | $ 84,000 | ||
Series A convertible preferred stock | ||||
Issuance of preferred stock to convert notes debt along with interest (in shares) | 127,998 | |||
Number of shares issued for cash | 100,000 | 100,000 | ||
Preferred shares for cash | $ 975,000 | $ 975,000 | ||
Series B convertible preferred stock | ||||
Issuance of preferred stock to convert notes debt along with interest (in shares) | 2,031,340 | |||
Number of shares issued for cash | 300,000 | 300,000 | ||
Preferred shares for cash | $ 2,975,000 | $ 2,975,000 | ||
Securities Purchase Agreement | Series A convertible preferred stock | ||||
Issuance of preferred stock to convert notes debt along with interest (in shares) | 127,998 | |||
Issuance of preferred stock to convert notes debt along with interest | $ 1,300,000 | |||
Number of shares issued for cash | 100,000 | |||
Preferred shares for cash | $ 1,000,000 | |||
Securities Purchase Agreement | Series B convertible preferred stock | ||||
Issuance of preferred stock to convert notes debt along with interest (in shares) | 203,134 | |||
Issuance of preferred stock to convert notes debt along with interest | $ 2,000,000 | |||
Number of shares issued for cash | 300,000 | |||
Preferred shares for cash | $ 3,000,000 |
Warrants and Options - Summary
Warrants and Options - Summary of warrants (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
May 31, 2020 | Nov. 30, 2019 | |
Intrinsic Value | ||
Beginning balance | $ 2,463,000 | |
Ending balance | $ 3,440,000 | |
Exercisable at May 31, 2020 | $ 3,440,000 | |
Warrants | ||
Warrants | ||
Beginning balance | 7,180,000 | |
Issued | 3,065,000 | |
Cashless exercise | (30,000) | |
Forfeited/expired | (414,000) | |
Ending balance | 9,801,000 | 7,180,000 |
Exercisable at May 31, 2020 | 9,776,000 | |
Weighted Average Exercise Price | ||
Beginning balance | $ 2.22 | |
Issued | 2.13 | |
Cashless exercise | 0.86 | |
Forfeited/expired | 3.95 | |
Ending balance | $ 2.11 | $ 2.22 |
Exercisable at May 31, 2020 | 2.11 | |
Weighted Average Remaining Contractual Life (years) | ||
Beginning balance | 3 years 2 months 12 days | |
Issued | 4 years 6 months | |
Ending balance | 3 years 4 months 24 days | |
Exercisable at May 31, 2020 | 3 years 4 months 24 days |
Warrants and Options - Fair val
Warrants and Options - Fair value of warrants (Details) - Warrants | 6 Months Ended |
May 31, 2020$ / shares | |
Strike price | $ 2.12 |
Term (years) | 5 years |
Volatility | 120.00% |
Risk-free rate | 1.30% |
Dividend yield | 0.00% |
Warrants and Options - Modficat
Warrants and Options - Modfication of warrants (Details) | Feb. 12, 2020$ / shares |
After Modification | |
Strike price | $ 2.20 |
Term (years) | 3 years 8 months 12 days |
Volatility | 124.00% |
Risk-free rate | 0.90% |
Dividend yield | 0.00% |
Before Modification | |
Strike price | $ 4.20 |
Term (years) | 1 year 6 months |
Volatility | 164.00% |
Risk-free rate | 1.10% |
Dividend yield | 0.00% |
Warrants and Options - Summar_2
Warrants and Options - Summary of outstanding options (Details) | 6 Months Ended | 12 Months Ended |
May 31, 2020$ / sharesUSD ($)shares | Nov. 30, 2019$ / sharesshares | |
Intrinsic Value | ||
Beginning balance | $ 2,463,000 | |
Ending balance | $ 3,440,000 | |
Exercisable at May 31, 2020 | $ 3,440,000 | |
Stock Options | ||
Options | ||
Beginning balance | shares | 1,200,000 | |
Issued | shares | 150,000 | |
Ending balance | shares | 1,350,000 | 1,200,000 |
Weighted Average Exercise Price | ||
Beginning balance | $ 1.35 | |
Issued | 1.50 | |
Ending balance | $ 1.37 | $ 1.35 |
Exercisable at May 31, 2020 | 1,260,000 | |
Weighted Average Remaining Contractual Life (years) | ||
Beginning balance | 3 years 4 months 24 days | |
Issued | 4 years 6 months | |
Ending balance | 3 years 1 month 6 days | |
Exercisable at May 31, 2020 | 2 years 10 months 24 days | |
Intrinsic Value | ||
Beginning balance | $ 453,000 | |
Ending balance | $ 769,000 | |
Exercisable at May 31, 2020 | $ 735,000 |
Warrants and Options - Addition
Warrants and Options - Additional Information (Details) - USD ($) | May 01, 2020 | Feb. 12, 2020 | May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 |
Share based compensation related to warrants modification, Amount | $ 149,520 | $ 255,008 | ||||
Number of modified warrants | 168,000 | 245,625 | ||||
General and administrative expenses | 1,598,235 | $ 1,195,759 | 7,168,206 | $ 2,438,470 | ||
Research and development expenses | 20,329 | $ 1,071,416 | 283,201 | 1,886,115 | ||
Unrecognized stock-based compensation | $ 33,000 | $ 33,000 | ||||
Certain consultants and service providers | ||||||
Number of warrants issued in exchange for services rendered | 901,000 | |||||
Certain consultanta and legal service providers | ||||||
Number of warrants issued in exchange for services rendered | 250,000 | |||||
Exercise price of warrant | $ 2.12 | $ 2.12 | ||||
Direct offering cost | $ 100,000 | $ 100,000 | ||||
Minimum | Certain consultants and service providers | ||||||
Warrants exercisable term | 3 years | 3 years | ||||
Exercise price of warrant | $ 2 | $ 2 | ||||
Minimum | Certain consultanta and legal service providers | ||||||
Warrants exercisable term | 6 months | 6 months | ||||
Maximum | Certain consultants and service providers | ||||||
Warrants exercisable term | 5 years | 5 years | ||||
Exercise price of warrant | $ 2.12 | $ 2.12 | ||||
Maximum | Certain consultanta and legal service providers | ||||||
Warrants exercisable term | 5 years | 5 years | ||||
After Modification | ||||||
Warrants exercisable term | 2 years | |||||
Exercise price of warrant | $ 2 | $ 2.33 | ||||
Share based compensation related to warrants modification, Amount | $ 100,000 | $ 200,000 | ||||
Amount of consideration received | $ 20,000 | |||||
After Modification | Minimum | ||||||
Warrants exercisable term | 2 years | |||||
After Modification | Maximum | ||||||
Warrants exercisable term | 3 years | |||||
Options and Warrants | ||||||
General and administrative expenses | $ 4,700,000 | |||||
Research and development expenses | $ 300,000 | |||||
Officers | ||||||
Number of warrants issued in exchange for services rendered | 1,500,000 | |||||
Exercise price of warrant | $ 2.12 | $ 2.12 | ||||
Officers | Minimum | ||||||
Warrants exercisable term | 6 months | 6 months | ||||
Officers | Maximum | ||||||
Warrants exercisable term | 5 years | 5 years |