STOCKHOLDERS’ DEFICIT |
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| STOCKHOLDERS’ DEFICIT | NOTE 9 – STOCKHOLDERS’ DEFICIT
Share Based Compensation
As of May 31, 2026 and 2025, there were 2,055,555 and zero unvested and unrecognized shares, respectively.
The Company granted options for the purchase of 9,725,000 shares of the Company’s common stock at a price of $0.28 per share during the second quarter of fiscal year 2026. Options to purchase common stock totaling 7,475,000 vested immediately on the grant date, options to purchase 1,000,000 shares of common stock vest monthly over three years and the final 1,250,000 options to purchase shares of common stock contingently vest upon achieving certain requirements. There were 20,000,000 shares underlying the Company’s outstanding options granted during fiscal year ending May 31, 2023, at a weighted average exercise price of $0.06 per share.
The Company made no option grants in fiscal year 2025.
The Black-Scholes option pricing model is used to estimate the fair value of options granted under our stock incentive plan.
The risk-free interest rate is based upon the U.S. Treasury interest rate in effect at the time of grant for a bond with a similar term. The Company does not anticipate declaring dividends in the foreseeable future. Volatility is estimated based on the historical share prices over the same period as the expected life of the stock options. The Company uses the simplified method for determining the expected term of its stock options. The Company recorded share-based compensation for stock option grants totaling $2,080,412 in general, selling and administrative expense during the fiscal year ended May 31, 2026.
All stock options are exercisable upon vesting. As of May 31, 2026 and 2025, respectively there were 27,669,445 and 20,000,000 vested options outstanding at a weighted average exercise price of $0.12 and $0.06, respectively.
Restricted Stock
During the fourth fiscal quarter ended May 31, 2026, the Company entered stock purchase agreements with various accredited investors and received $2,238,615 in cash or debt exchange for the issuance of 4,477,231 shares of common stock at $0.50 per share. A financial advisory firm received 416,667 shares of common stock for services rendered worth $100,000.
During the third fiscal quarter of 2026, the Company entered a stock purchase agreement with an accredited investor and received $125,000 for the issuance of 290,697 shares of common stock at $0.43 per share. The Company also sold 232,558 shares of common stock to another accredited investor at $0.43 per share who deposited $100,000 with the Company.
During the second fiscal quarter of 2026, the Company issued 2,464,650 shares of common stock to accredited investors at $0.43 per share who deposited $1,059,800 with the Company.
During the first fiscal quarter of 2026, the Company issued 116,279 shares of common stock to an accredited investor who deposited $50,000 with the Company on September 5, 2024. These shares were issued in June 2025 after the applicable stock purchase agreement was executed.
During fiscal year 2025, the Company sold 2,894,490 shares of common stock to accredited investors at an average price of $0.437 per share for gross proceeds of $1,265,200. As of May 31, 2025, proceeds totaling $50,000 were recorded as stock payable as the 116,279 related shares of common stock have not been issued. There were no finder’s fees related to the sales of the shares. The Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the Securities Act.
Warrants
During the fourth fiscal quarter of 2026, the Company issued warrants to purchase 308,139 shares of its common stock at a weighted average exercise price of $0.83 per share, associated with public relations and fundraising services. The grant date fair value of the issued stock warrants issued during the quarter ending May 31, 2026 totaled $206,870. The Black Scholes option pricing model was used to estimate the fair value of the warrants granted. The weighted average assumptions used in calculating the estimated fair value included a 3.69% risk free interest rate, a 0% expected dividend yield, a 148% expected volatility and a 4.4-year expected life. During the second fiscal quarter of 2026, the Company issued warrants to purchase 85,700 shares of its common stock at $0.43 per share, associated with the sale of $85,700 in principal amount of Subordinated Promissory Notes The grant date fair value of the issued stock warrants issued during the quarter ending November 30, 2025 totaled $25,034. The Black Scholes option pricing model was used to estimate the fair value of the warrants granted. The weighted average assumptions used in calculating the estimated fair value included a 3.54% risk free interest rate, a 0% expected dividend yield, a 129% expected volatility and a 2-year expected life.
During the first fiscal quarter of 2026, the Company issued warrants to purchase 1,189,300 shares of its common stock, at $0.43 per share, associated with the sale of $1,189,300 in principal amount of Subordinated Promissory Notes. The grant date fair value of the issued stock warrants during the quarter ending August 31, 2025 totaled $220,340. The Black Scholes option pricing model was used to estimate the fair value of the warrants granted. The weighted average assumptions used in calculating the estimated fair value included a 3.95% risk free interest rate, a 0% expected dividend yield, a 142% expected volatility and a 2-year expected life.
As of May 31, 2025, warrants to purchase 200,000 shares of common stock at a strike price of $0.43 per share were issued with the placement of a $200,000 short-term demand note bearing interest at 12% per annum. The grant date fair value of the stock warrants during the year ending May 31, 2025 totaled $21,835. The Black-Scholes option pricing model is used to estimate the fair value of warrants granted. The weighted average assumptions used in calculating the estimated fair value included a 4.0% risk free interest rate, a 0% expected dividend yield, a 95.6% expected volatility and a 2 year expected life. See Note 13.
During fiscal year ending May 31, 2026, 1,462,357 shares of common stock were issued upon exercise of warrants cashless basis in exchange for repayment of debt totaling $628,814. An additional 12,643 shares of common stock were issued upon exercise of warrants for a payment of $5,436. |
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