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Subsequent Events
12 Months Ended
Feb. 28, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 19 – SUBSEQUENT EVENTS

 

In fiscals 2013 through 2018, the Company issued notes payable to Robert Kopple and associated entities (collectively “Kopple”) in the aggregate of $5,607,323 (see Note 10). The notes were due in fiscal 2014 through fiscal 2018. As of February 28, 2022 and 2021, the outstanding balance of the Kopple notes payable and accrued interest amounted to $12,140,641 and $11,317,787, respectively. Kopple brought suit against the Company beginning in 2017 for repayment of the notes.

 

On March 14, 2022, the Company reached an agreement with Kopple to resolve all remaining litigation between them. Under the terms of the settlement, the Company agreed to pay Kopple an aggregate amount of $10,000,000, including $3,000,000 to be paid by June 8, 2022, and granted Koppel warrants exercisable into 3,331,664 shares of the Company’s common stock at a price of $0.85 per share. The fair value of the warrants is estimated to be $1,000,000, resulting in total consideration to Kopple of approximately $11,000,00. Pursuant to current accounting guidelines, the Company will only recognize any gain on the settlement of the Kopple notes and accrued interest of $12,140,161 upon completion of all settlement payments. As of June 8, 2022 and the date of this report, the Company has not yet paid the $3,000,000 installment due to Kopple. Pursuant to the agreement, the Company has 60 days to cure the nonpayment of the $3,000,000 default. The settlement provides for certain increases in the amount payable to Kopple and the right of such parties to enter judgment against the Company if the Company remains in uncured default in its payment obligations.

 

Subsequent to February 28, 2022, the Company issued 1,153,666 shares of common stock in exchange for cash proceeds of $346,100.