NOTES PAYABLE |
9 Months Ended |
|---|---|
Feb. 28, 2025 | |
| Debt Disclosure [Abstract] | |
| NOTES PAYABLE | NOTE 6– NOTES PAYABLE
During the period from November 19, 2024 through February 28, 2025, the Company issued and sold to 5 investors convertible notes bearing interest at 10% per annum, each due nine (9) months from the date of issuance, as follows:
1: 11/19/2024 in the principal amount of $25,000; 2. 11/27/2024 in the principal amount of $10,000; 3: 12/12/2024 in the principal amount of $10,000; 4: 12/12/2024 in the principal amount $10,000; and 5: 12/30/2024 in the principal amount of $10,000.
The Company has determined that it has not made a derivative liability calculation since those shares are not tradable as no market price has been established.
The Company agreed to issue to each of these investors as inducement restricted shares of the Company’s common stock equal to 1.5 shares for each dollar of the principal amount of the Note, resulting in the issuance of shares of common stock. The shares were issued at par value since no market has been established. The amortization of the discount for the three months ending February 28, 2025 was $85,106. The value of the shares were discounted against the note to be amortized over the terms of the notes. The total discount recorded for these shares related to these notes was $48,750. These notes are convertible beginning 180 days after issuance at a fixed conversion price of $0.50 per share.
In addition, the Company issued and sold to a single investor convertible notes as follows:
1: 12/18/2024 in the principal amount of $100,000; 2: 1/6/2025 in the principal amount of $100,000; and 3: 2/7/2025 in the principal amount of $300,000 is was classified as restricted cash.
BLUE CHIP CAPITAL GROUP, INC. NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
The Convertible Notes are convertible into shares of the Issuer’s Common Stock from and after a date six (6) months from the Issue Date, at a conversion price of $0.50 (“Conversion Price”) per share of Common Stock.
In connection with these notes, the Company agreed to issue shares per dollar invested resulting in a total of shares for these notes. The value of the shares were discounted against the note to be amortized over the terms of the notes. The total discount recorded for these shares related to these notes was $500,000. These convertible notes are due 9 months from the issuance date and bear interest at 10% per annum. These notes are convertible beginning 180 days after issuance at a fixed conversion price of $0.50 per share. The investor restricted the $250,000 of the February 7, 2025 note until the Company satisfied certain obligations. As such, $250,000 is shown on the consolidated balance sheet as restricted cash as of February 28, 2025.
The Company recorded interest expense of $5,719 and $0 for the nine months ended February 28, 2025 and February 29, 2024, respectively.
The Company recognized amortization of debt discounts in interest expense totaling $85,106 and $ for the nine months ended February 28, 2025 and February 29, 2024, respectively.
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