NOTES PAYABLE |
6 Months Ended |
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May 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 6 – NOTES PAYABLE
Bayshore Capital Advisors, LLC
On February 26, 2016, the Company issued a promissory note to Bayshore Capital Advisors, LLC (“Bayshore Capital”), an affiliate through common ownership of a 10% major stockholder of the Company, for $25,000 for working capital at an interest rate of 6% per annum. The note was payable August 26, 2016, or when the Company closes a bridge financing, whichever occurs first. On February 4, 2023, Bayshore Capital agreed to cancel the $25,000 debt, plus $10,146 of accrued and unpaid interest. Prior to the cancellation of the note, the Company was in default on the note. Total interest expense on the note was $255 and $750 for the six months ended May 31, 2023 and 2022, respectively. Total interest expense on the note was zero and $380 for the three months ended May 31, 2023 and 2022.
A. Scott Dockter – President and Chief Executive Officer
On August 31, 2017, the Company issued a note in the amount of $197,096 to A. Scott Dockter, President, Chief Executive Officer and a director of the Company, to consolidate the total amounts due to Mr. Dockter. The note bears interest at 6% and is due upon demand. During the six months ended May 31, 2023, the Company paid $15,000 towards the outstanding balance of the note. Total interest expense on the note was $612 and $1,706 for the six months ended May 31, 2023 and 2022, respectively. Total interest expense on the note was $233 and $837 for the three months ended May 31, 2023 and 2022, respectively. The balance on the note was $13,716 and $28,716 as of May 31, 2023 and November 30, 2022, respectively. There was $41,779 and $41,167 of accrued interest as of May 31, 2023 and November 30, 2022, respectively.
Convertible Promissory Notes – USMC
December 1, 2019
On December 1, 2019, in connection with the September 26, 2019 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $20,000 to USMC, with a maturity date of December 31, 2021 (“Tranche #1”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock, at any time at the option of the holder, at a conversion price of $0.16 per share. On April 7, 2022, the December 1, 2019 note was amended to extend the maturity date to April 30, 2022 and USMC gave notice of conversion of the outstanding principal balance of $20,000 plus accrued interest totaling $2,351 through such date, into shares of the Company’s common stock.
The issuance of Tranche #1 resulted in a discount from the beneficial conversion feature totaling $20,000. Total straight-line amortization of this discount was zero for the three and six months ended May 31, 2023 and May 31, 2022. Total interest expense on Tranche #1 was approximately zero and $350 for the six months ended May 31, 2023 and 2022, respectively. Total interest expense on Tranche #1 was approximately zero and $100 for the three months ended May 31, 2023 and 2022, respectively.
January 1, 2020
On January 1, 2020, in connection with the September 26, 2019 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $86,000 to USMC, with a maturity date of January 1, 2022 (“Tranche #2”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock, at any time at the option of the holder, at a conversion price of $0.16 per share. On April 7, 2022, the January 1, 2020 note was amended to extend the maturity date to April 30, 2022 and USMC gave notice of conversion of the outstanding principal balance of $86,000 plus accrued interest totaling $9,743 through such date, into shares of the Company’s common stock.
The issuance of Tranche #2 resulted in a discount from the beneficial conversion feature totaling $32,250. Total straight-line amortization of this discount totaled zero and $1,412 for the three and six months ended May 31, 2023 and May 31, 2022, respectively. Total interest expense on Tranche #2 was approximately and $1,500 for the six months ended May 31, 2023 and 2022, respectively. Total interest expense on Tranche #2 was approximately and $450 for the three months ended May 31, 2023 and 2022, respectively.
February 1, 2020
On February 1, 2020, in connection with the September 26, 2019 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $72,000 to USMC, with a maturity date of February 1, 2022 (“Tranche #3”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock, at any time at the option of the holder, at a conversion price of $0.16 per share. On April 7, 2022, the February 1, 2020 note was amended to extend the maturity date to April 30, 2022 and USMC gave notice of conversion of the outstanding principal balance of $72,000 plus accrued interest totaling $7,851 through such date, into shares of the Company’s common stock.
The issuance of Tranche #3 resulted in a discount from the beneficial conversion feature totaling $36,000. Total straight-line amortization of this discount totaled zero and $3,103 for the six months ended May 31, 2023 and May 31, 2022, respectively. Total interest expense on Tranche #3 was approximately and $1,260 for the six months ended May 31, 2023 and 2022, respectively. Total interest expense on Tranche #3 was approximately and $375 for the three months ended May 31, 2023 and 2022, respectively.
December 1, 2020
On December 1, 2020, in connection with the September 26, 2019 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $822,000 to USMC, with a maturity date of November 25, 2022 (“Tranche 4”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.16 per share. On April 7, 2022 USMC gave notice of conversion of the outstanding principal balance of $822,000 of the December 1, 2020 note, plus accrued interest totaling $55,401 through such date, into shares of the Company’s common stock. Total interest expense on Tranche #4 was approximately zero and $17,700 for the six months ended May 31, 2023 and 2022, respectively. Total interest expense on Tranche #4 was approximately zero and $7,500 for the three months ended May 31, 2023 and 2022, respectively.
March 17, 2021
On March 17, 2021, in connection with the March 11, 2021 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $579,769 to USMC, with a maturity date of March 17, 2023 (“Tranche #5”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.088 per share. On April 7, 2022 USMC gave notice of conversion of the outstanding principal balance of $579,769.39 of the March 17, 2021 note, plus accrued interest totaling $30,656 through such date, into shares of the Company’s common stock. Total interest expense on Tranche #5 was approximately zero and $8,800 for the six months ended May 31, 2023 and 2022, respectively. Total interest expense on Tranche #5 was approximately zero and $1,700 for the three months ended May 31, 2023 and 2022, respectively.
March 14, 2022
On March 14, 2022, in connection with the November 25, 2020 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $884,429 to USMC, with a maturity date of March 14, 2024 (“Tranche #6”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.088 per share. On April 7, 2022 USMC gave notice of conversion of the outstanding principal balance of $884,492 of the March 14, 2022 note, plus accrued interest totaling $2,908 through such date, into shares of the Company’s common stock. Total interest expense on Tranche #6 was approximately and $2,908 for the six months ended May 31, 2023 and May 31, 2022. Total interest expense on Tranche #6 was approximately and $2,908 for the three months ended May 31, 2023 and May 31, 2022.
August 30, 2022
On August 30, 2022, in connection with the April 7, 2022 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $470,862 to USMC, with a maturity date of August 30, 2024 (“Tranche #7”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.39 per share. Total interest expense on Tranche #7 was $11,610 for the six months ended May 31, 2023. Total interest expense on Tranche #7 was $5,805 for the three months ended May 31, 2023.
November 29, 2022
On November 29, 2022, in connection with the April 7, 2022 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $140,027 to USMC, with a maturity date of August 30, 2024 (“Tranche #8”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.39 per share. Total interest expense on Tranche #8 was $3,453 for the six months ended May 31, 2023. Total interest expense on Tranche #8 was $1,726 for the three months ended May 31, 2023.
February 28, 2023
On February 28, 2023, in connection with the April 7, 2022 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $308,320 to USMC, with a maturity date of February 28, 2025 (“Tranche #9”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.39 per share. Total interest expense on Tranche #9 was $3,801 for the three and six months ended May 31, 2023.
May 31, 2023
On May 31, 2023, in connection with the March 20, 2023 securities purchase agreement with USMC (See Note 12), the Company issued a convertible promissory note in the amount of $412,533 to USMC, with a maturity date of May 31, 2025 (“Tranche #10”). The note bears interest at 8% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.10 per share. There was no interest expense on Tranche #10 for the three and six months ended May 31, 2023.
Line of Credit –USMC
July 10, 2023
On July 10, 2023 , the Company entered into a line of credit agreement and unsecured convertible grid promissory note with USMC. The July 10, 2023 line of credit agreement provides for the issuance for up to one year of up to an aggregate of $1,000,000 of advances from USMC under an unsecured convertible grid promissory note (See Note 12). The note bears interest at 8% annum and any outstanding principal or accrued interest under the note is convertible into shares of the Company’s common stock at a conversion price of $0.10 per share on the maturity date. As of the date hereof, there have been no advances from USMC under the July 10, 2023 line of credit agreement.
Convertible Debt – Board of Directors
On April 8, 2021, the Company entered into a twelve-month director agreement with Jeffrey Guzy, as amended on August 26, 2022 (the “Guzy Director Agreement”) pursuant to which Mr. Guzy will serve as a director of the Company, which agreement will automatically renew (the “Renewal Date”) for successive one-year terms unless either party notifies the other of its desire not to renew the Agreement within 30 days of the expiration of the then current term. As compensation therefor, Mr. Guzy is entitled to a cash fee of $ per month which accrues as % debt to the Company until the Company has its first cash-flow positive month. Any amounts owed to Mr. Guzy at the Renewal Date or upon Mr. Guzy’ resignation or removal (the “Termination Date”) will be converted into the Company’s common stock at a price per share equal to the market price on the exchange or trading market where such stock is then traded or quoted or the volume-weighted average price (“VWAP”) of the common stock for the 20days immediately preceding the Renewal Date or the Termination Date, as the case may be. On April 14, 2023, Mr. Guzy converted $ in accrued but unpaid director fees into shares of common stock at $ per share and shares of common stock at $ per share. As of May 31, 2023, cash fees owed to Mr. Guzy under the Guzy Director Agreement were deferred and debt in the amount of $ is owed to Mr. Guzy.
On August 13, 2021, the Company entered into a twelve-month director agreement with Dr. Kurtis, as amended on August 26, 2022 (the “Kurtis Director Agreement”) pursuant to which Dr. Kurtis will provide up to five hours per month of board services, which agreement will automatically renew for successive one-year terms unless either party notifies the other of its desire not to renew the Agreement within 30 days of the expiration of the then current term. As compensation therefor, Dr. Kurtis is entitled to a cash fee of $ per month which accrues as debt to the Company until the Company has its first cash-flow positive month. Any amounts owed to Dr. Kurtis at the Renewal Date or the Termination Date will be converted into common stock at a price per share equal to market price on the exchange or trading market where such stock is then traded or quoted or the VWAP of the common stock for the 20 days immediately preceding the Renewal Date or the Termination Date, as the case may be. On April 14, 2023, Dr. Kurtis exercised the conversion of $ in accrued but unpaid director fees to purchase shares of common stock at $ per share. As of May 31, 2023, cash fees owed to Dr. Kurtis as per the terms of the Kurtis Director Agreement were deferred and debt in the amount of $ is owed to Dr. Kurtis.
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