NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 – Basis of Presentation
Nate’s Food Co. (“we”, “us”, “our”, the "Company" or the "Registrant") was incorporated in the state of Colorado on January 12, 2000. Nate’s Food Co. is domiciled in the state of Colorado, and its corporate headquarters are located in Huntington Beach, California. The Company selected May 31 as its fiscal year end. On May 12, 2014, Nate’s Pancakes Inc. was incorporated in the state of Indiana. On May 19, 2014, the Company completed a reverse merger with Nate’s Pancakes, Inc. Nate’s Pancakes was the surviving Company. In May 2014, the Company changed its name from Capital Resource Alliance to Nate’s Food Co.
We sell a ready-to-use, pre-mixed pancake and waffle batter delivered in a pressurized can. Our current product is an original flavor of pancake and waffle batter. We are currently in the process of developing additional flavors and products with the goal to have 10 products in development in 2017. Currently, we have developed three flavors for our pancake and waffle mix. We plan to continue to expand into other baked goods and other non-breakfast areas.
The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's annual report filed with the SEC on Form 10-K, on October 6, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2016 as reported in Form 10-K, have been omitted.
Use of Estimates
The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on Nate’s Food Co. financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Nate’s Food Co.’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Reclassifications
Certain amounts in the fiscal 2016 financial statements have been reclassified to conform to the fiscal 2017 presentation. These reclassifications have no impact on net loss/income.
Recently Adopted Accounting Standards
In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The updated guidance requires debt issuance costs to be presented as a direct deduction from the carrying amount of the corresponding debt liability in the balance sheet. The Company adopted the standard on a retrospective basis in the first quarter of fiscal 2017. The adoption of this standard reduced both deferred financing cost and convertible note and note payable long-term by $17,496 on the audited Balance Sheet as of May 31, 2016.
Long-Lived Assets
Long-lived assets such as property and equipment are stated at their fair value acquisition cost and reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. Amortization of long-lived assets are calculated by the straight line method over their estimated useful lives. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.
Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:
|
|
Estimated
|
|
|
Useful Lives
|
Equipment
|
|
10 years
|
As of August 31, 2016, equipment of $395,195 reflects acquisition costs. During the period ended August 31, 2016 and 2015, depreciation expense was $9,880 and $0, respectively
Fair Value of Financial Instruments
The Company's financial instruments consist primarily of cash, accounts payable and accrued liabilities, accrued expenses, convertible notes and Note payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.
The Company adopted ASC Topic 820,
Fair Value Measurements
("ASC Topic 820"), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.
The three-level hierarchy for fair value measurements is defined as follows:
|
·
|
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets;
|
|
|
|
|
·
|
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;
|
|
|
|
|
·
|
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement
|
The following table summarizes fair value measurements by level at August 31, 2016, and May 31, 2016, measured at fair value on a recurring basis:
August 31, 2016
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
158,942
|
|
|
|
158,942
|
|
May 31, 2016
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
2,039,179
|
|
|
|
2,039,179
|
|
Note 2 – Going Concern
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has negative working capital, recurring losses from operations, and does not have an established source of revenues sufficient to cover its operating costs. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
In the coming year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with operations and business developments. The Company may experience a cash shortfall and be required to raise additional capital.
Historically, it has mostly relied upon internally generated funds such as shareholder loans and advances to finance its operations and growth. Management may raise additional capital by retaining net earnings or through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.
Note 3 – Related Party Transactions
Notes Payable – Related Parties
|
|
August 31, 2016
|
|
|
May 31, 2016
|
|
|
|
|
|
|
|
|
Note payable to WB Partners (a company controlled by Joseph Wade)
|
|
$
|
60,532
|
|
|
$
|
60,532
|
|
Note payable to corporate officer
|
|
|
179,994
|
|
|
|
114,976
|
|
Total notes payable
|
|
|
240,526
|
|
|
|
175,508
|
|
Less: current portion of notes payable
|
|
|
240,526
|
|
|
|
175,508
|
|
Total
|
|
$
|
-
|
|
|
$
|
-
|
|
During the three months ended August 31, 2016, the Company borrowed $65,018 from our officer for working capital. As at August 31, 2016, the total amount owed to this officer was $179,994. Of this amount, $57,000 of the loan is at 10% interest and to be repaid by June 28, 2017. $71,902 of the loan is at 10% interest, and $51,092 of the loan is at 0% interest. Both of the loans are to be repaid by December 31, 2016.
During the three months ended August 31, 2016, the amount the Company borrowed and repaid $0 to WB Partners. The total amount owing was $60,532 as at August 31, 2016. The loan was at 0% interest and is to be repaid by December 31, 2015 and is currently in default.
Note 4 – Notes Payable
The Company had the following notes payable at August 31, 2016 and May 31, 2016.
|
|
August 31, 2016
|
|
|
May 31, 2016
|
|
|
|
|
|
|
|
|
Note payable to Tarpon Bay partners
|
|
$
|
-
|
|
|
$
|
50,000
|
|
Note payable to SouthCorp Capital
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
|
200,000
|
|
|
|
250,000
|
|
Less: deferred financing cost
|
|
|
(12,654
|
)
|
|
|
(15,459
|
)
|
|
|
|
|
|
|
|
|
|
Less: current portion of notes payable
|
|
|
-
|
|
|
|
50,000
|
|
Total
|
|
$
|
187,346
|
|
|
$
|
184,541
|
|
Note payable to Tarpon Bay partners
On October 8, 2015, the Company issued a Promissory Note (the “Note”) to Tarpon Bay Partners LLC, for $50,000, due April 30, 2016. The Note carries an annual interest rate of 10%. On August 9, 2016, the Company entered into the new agreement which the company issued a convertible note of $53,630 for payment of the Note of $50,000 and accrued interest of $3,630 and the company recognized this transaction as debt modification.
Note payable to SouthCorp Capital
On October 20, 2015, the Company issued a Promissory Note to SouthCorp Capital, for $200,000, due October 20, 2017 for a payment for purchase of equipment of $177,712 and financing cost of $22,288 related to the purchase of the equipment. The Note carries an annual interest rate of 8%. As of August 31, 2016, the Company owes $214,519, of which $14,519 is accrued interest. The company recognized amortization expense related to the deferred financing cost of $2,805 for the three months ended August 31, 2016.
Note 5 – Convertible Debt
The Company had the following convertible notes payable outstanding as of August 31, 2016 and May 31, 2016:
|
|
August 31, 2016
|
|
|
May 31, 2016
|
|
Typenex Co
|
|
$
|
20,060
|
|
|
$
|
39,688
|
|
EMA Financial
|
|
|
-
|
|
|
|
39,967
|
|
BOU Trust
|
|
|
-
|
|
|
|
60,260
|
|
Fourth Man, LLC
|
|
|
-
|
|
|
|
55,000
|
|
Lucosky Brookman
|
|
|
-
|
|
|
|
20,000
|
|
Tarpon Bay
|
|
|
46,306
|
|
|
|
-
|
|
|
|
|
66,366
|
|
|
|
214,915
|
|
Less: debt discount and deferred financing cost
|
|
|
(38,423
|
)
|
|
|
(22,296
|
)
|
|
|
|
27,943
|
|
|
|
192,619
|
|
Less: current portion of convertible notes payable
|
|
|
27,943
|
|
|
|
192,619
|
|
Long-term convertible notes payable
|
|
$
|
-
|
|
|
$
|
-
|
|
Typenex Co
On July 24, 2015, the Company received financing in the amount of $93,000 from TypenexCo-Investment, LLC with $13,000 cash discount to the lender and incurred $8,000 financing costs to third parties. The deferred financing cost is being amortized over the life of the note using the effective interest method. The $93,000 bears an 8% interest and matures in nine months. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is 50% of the average of the three lowest closing bid prices for the 15 previous consecutive trading days prior to the payment date. The Company may prepay the note at any time at an amount equal to 120% of the outstanding principal and the accrued and unpaid interest. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method. On July 8, 2016, the Company made a payment of 50% of the balance then due in the amount of $57,000. The payment of $57,000 was applied to an interest penalty and accrued interest. The Company entered into a Forbearance Agreement with Typenex regarding conversion of the balance of $57,000 debt into Shares of Common Stock at an agreed upon discount and frequency of conversions. During the three months ended August 31, 2016, a portion of the note of $19,628 was converted into 4,000,000 shares of common stock.
EMA Financial
On August 14, 2015, the Company received financing in the amount of $65,500 from EMA Financial, LLC with $5,500 cash discount to the lender and incurred $6,000 financing costs to third parties. The deferred financing cost is being amortized over the life of the note using the effective interest method resulting in $1,085 of interest expense for the three months ended August 31, 2016. The $65,500 bears 10% interest and matures in twelve months. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the less of closing sale price of $0.035 and 60% of the lowest trade occurring during the 15 consecutive trading days immediately preceding the conversion date. The Company may prepay the note at any time during the first 120 days, at an amount equal to 125% of the outstanding principal and the accrued and unpaid interest, but no prepayment permitted thereafter. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method resulting in $7,164 of interest expense for the three months ended August 31, 2016. On June 21, 2016, the Company paid off the full balance due including interest and retired this debt entirely for the sum of $74,382.
BOU Trust
On September 25, 2015, the Company received financing in the amount of $68,250 from BOU Trust with $3,250 cash discount to the lender and incurred $6,500 financing costs to third parties. The deferred financing cost is being amortized over the life of the note using the effective interest method. The $68,250 bears 10% interest and matures on March 25, 2016. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the 60% of the lowest traded price, determined on the then current trading market for the Company’s common stock, for the 20 trading days prior to conversion. The Company may prepay any portion of the principal amount at 130% of such amount along with any accrued interest of this note at any time upon send days written notice to the holder. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method. During the three months ended August 31, 2016, a portion of the note of $8,352 was converted into 11,600,000 shares of common stock. On June 24, 2016, the Company paid off the full balance due including interest and retired this debt entirely for the sum of $75,000.
Lucosky Brookman
On November 5, 2015, the Company issued convertible note of $30,000 to Lucosky Brookman, LLC. The Company repays in advance $5,000 per month. The $30,000 bears 0% interest and matures on March 20, 2016. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the 60% of average of the lowest for 10 trading days prior to conversion at the option of the Holder, in whole at any time and from time to time. Upon the later of the Maturity Date or that date which is six months following the date hereof, this Note shall be convertible into shares of the Company’s common stock. During the three months ended August 31, 2016, the remaining note balance and accrued interest of $21,536 was fully converted into 3,500,000 shares of common stock.
Fourth Man, LLC
On November 5, 2015, the Company received financing in the amount of $55,000 from Fourth Man, LLC, with $5,000 cash discount to the lender and incurred $4,000 financing costs to third parties. The deferred financing cost is being amortized over the life of the note using the effective interest method resulting in $952 of interest expense for the three months ended August 31, 2016. The $55,000 bears 10% interest and matures on August 4, 2016. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the 53% of the lowest daily trading price, determined on the then current trading market for the Company’s common stock, for 10 trading days prior to conversion at the option of the Holder, in whole at any time and from time to time. During the first 90 days subsequent to the date of issuance, the company may prepay any portion of the principal amount at 130% of such amount along with any accrued interest of this debenture at any time upon seven days written notice to the holder. After the first 90 days subsequent to the date of issuance, the company may prepay any portion of the principal amount at 150% of such amount along with any accrued interest of this debenture at any time upon seven days written notice to the holder. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method resulting in $13,095 of interest expense for the three months ended August 31, 2016. On June 16, 2016, the Company paid off the full balance due including interest and retired this debt entirely for the sum of $75,000.
Tarpon Bay
On August 9, 2016, the Company issued a convertible note of $53,630 to Tarpon Bay to repay note payable of $50,000 and interest expense of $3,630. The $53,630 bears 10% interest and matures on December 31, 2016. The holder is entitled at any time to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the 90% of the lowest closing price for 15 trading days ending on the trading days. Notwithstanding the above, Holder agrees to convert only that portion of the principal and accrued interest of this note that converts into no greater than 1,000,000 shares of common stock for any single Notice of Conversion. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method resulting in $15,207 of interest expense for the three months ended August 31, 2016. During the three months ended August 31, 2016, a portion of the note and accrued interest of $13,825 were converted into 1,857,619 shares of common stock.
Note 6 – Derivative Liability
The Company analyzed the conversion options for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability when the conversion option becomes effective and there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.
The following table summarizes the derivative liabilities included in the balance sheet at August 31, 2016:
Balance - May 31, 2016
|
|
$
|
2,039,179
|
|
Addition of new derivative as debt discount
|
|
|
53,630
|
|
Day one loss due to derivative
|
|
|
22,784
|
|
(Gain) on change in fair value of the derivative
|
|
|
(291,906
|
)
|
(Gain) on change in fair value of the derivative due to cash payoff
|
|
|
(1,399,743
|
)
|
Settled upon conversion of debt
|
|
|
(265,002
|
)
|
Balance - August 31, 2016
|
|
$
|
158,942
|
|
The following table summarizes the gain/loss on derivative liability included in the income statement for the periods ended August 31, 2016 and 2015, respectively.
|
|
Three Months Ended August 31,
|
|
|
|
2016
|
|
|
2015
|
|
Day one loss due to derivatives on convertible debt
|
|
$
|
22,784
|
|
|
$
|
25,617
|
|
(Gain) on change in fair value of the derivative
|
|
|
(1,691,649
|
)
|
|
|
(1,993
|
)
|
|
|
$
|
(1,668,865
|
)
|
|
$
|
23,624
|
|
The table below shows the Black-Scholes option-pricing model inputs used by the Company to value the derivative liability, as well as the determined value of the option liability at each measurement date:
|
|
August 31,
|
|
|
May 31,
|
|
|
|
2016
|
|
|
2016
|
|
Expected term
|
|
0.33 - 4.08 years
|
|
|
0.05 - 5 years
|
|
Expected average volatility
|
|
177.92% - 314.75%
|
|
|
94.21% - 1,097.67%
|
|
Expected dividend yield
|
|
|
-
|
|
|
|
-
|
|
Risk-free interest rate
|
|
0.36% - 1.06%
|
|
|
0.06% - 1.65%
|
|
Note 7 – Equity Transactions
Preferred Stock
Series A Preferred Stock
The Company is authorized to issue 2,000,000 shares of series A Preferred Stock at a par value of $0.0001. The Series A Preferred Stock has voting rights equal to 1,000 votes for each 1 share of owned.
There were no issuances of the Series A Preferred Stock during the three months ended August 31, 2016
Series B Convertible Preferred Stock
The Company is authorized to issue 150,000 shares of Series B Preferred Stock at a par value of $0.0001. The Series B Preferred converts into Common Stock at a ratio of 1:1,000. However, the Series B may not be converted for a period of 12 months.
During the three months ended August 31, 2016, 5,400 shares of Series B Preferred Stock were converted at rate of 1 preferred share to 1,000 common shares, resulting in the issuance of 5,400,000 shares of common stock, for a value of $540, of which $534 was recorded as a deemed dividend.
As of August 31, 2016 and May 31, 2016, 136,570 and 141,970 shares of Series B Preferred Stock were issued and outstanding, respectively.
Series C Convertible Preferred Stock
The Company is authorized to issue 250,000 shares of Series C Preferred Stock at a par value of $1. The Preferred Stock can be converted to common stock, at a conversion rate of 66 common shares for each preferred stock. The Company evaluated the conversion feature and concluded that it did not qualify as a derivative transaction. The Company evaluated the convertible preferred stock under FASB ACS 470-20-30 and determined it does not contain a beneficial conversion feature.
There were no issuances of the Series C Preferred Stock during the three months ended August 31, 2016.
Series D Convertible Preferred Stock
On June 13, 2016, pursuant to its Articles of Incorporation and Bylaws, the Board of Directors of the Company, unanimously approved the designation of a new series of preferred stock, "Series D Convertible Preferred Stock.
The Company is authorized to issue 10,000,000 shares of Series D Preferred Stock at a par value of $0.0001.
Beginning January 1, 2017, each holder of shares of Series D Preferred Stock may, at any time and from time to time, convert each of its shares of Series D Preferred Stock into a 15 of fully paid and nonassessable shares of common stock. Beginning January 1, 2018, the Company may convert shares of Series D Preferred Stock at any time and from time to time, each of its shares of Series D Preferred Stock into a 15 of fully paid and nonassessable shares of common stock.
During the three months ended August 31, 2016, the Company issued 2,350,000 share of Series D Preferred Stock for cash of $235,000.
As of August 31, 2016 and May 31, 2016, 2,350,000 and 0 shares of Series D Preferred Stock were issued and outstanding, respectively.
Series E Preferred Stock
The Company is authorized to issue 15,000,000 shares of Series E Preferred Stock at a par value of $0.0001. Beginning October 1, 2016, each share of Series E Preferred Stock is convertible into ten (10) shares of common stock. From October 1, 2016 to October 1, 2018, holders of Series E Preferred Stock may at any time convert to shares of common stock, thereafter, the Company may elect to convert any outstanding stock at any time without notice to the shareholders. The Company evaluated the conversion feature and concluded that it did not qualify as a derivative transaction. The Company evaluated the convertible preferred stock under FASB ACS 470-20-30 and determined it does not contain a beneficial conversion feature.
During the three months ended August 31, 2016, 9,000 shares of Series E Preferred Stock were cancelled by a holder and the company recognized additional paid in capital and reversed Series E Preferred Stock with par value.
As of August 31, 2016 and May 31, 2016, 10,216,000 and 10,225,000 shares of Series B Preferred Stock were issued and outstanding, respectively.
Common stock
During the three months ended August 31, 2016, the Company issued common shares, as follows:
|
·
|
5,400 shares of Series B Preferred Stock were converted at rate of 1 preferred share to 1,000 common shares, resulting in the issuance of 5,400,000 shares of common stock, for a value of $540, of which $534 was recorded as a deemed dividend.
|
|
·
|
20,957,619 common shares were issued for the conversion of debt and accrued interest of $63,341
|
As of August 31, 2016 and May 31, 2016, 278,266,510 and 251,908,891 shares of common stock were issued and outstanding, respectively.
Warrants
On September 29, 2015, the Company granted 1,000,000 warrants to Vista Capital Investments, LLC, in exchange for interest owed of $12,222, and recognized a loss on debt settlement of $16,778. Warrants are originally exercisable into 1,000,000 shares of common stock, for a period of five years from issuance, at a price of $0.05 per share, with multiple reset provisions when the share price is below $0.05. As a result of the reset features the warrants became exercisable into 2,477,215 shares of common stock at $0.0041 per share.
The following table summarizes information relating to outstanding and exercisable warrants as of August 31, 2016:
Warrants Outstanding
|
|
Warrants Exercisable
|
Number of Shares
|
|
Weighted Average Remaining Contractual life
(in years)
|
|
Weighted Average Exercise Price
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
2,477,215
|
|
4.01 years
|
|
$0.0041
|
|
2,477,215
|
|
$0.0041
|
The following table summarizes warrant activity for the three months ended August 31, 2016:
|
|
Number
|
|
|
Weighted Average Exercise Price
|
|
|
Weighted Average Life (years)
|
|
Outstanding, May 31, 2016
|
|
|
4,062,633
|
|
|
$
|
0.0025
|
|
|
4.33 years
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Reset features
|
|
|
(1,585,418
|
)
|
|
|
0.0025
|
|
|
4.08 years
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Outstanding, August 31, 2016
|
|
|
2,477,215
|
|
|
$
|
0.0025
|
|
|
4.08 years
|
|
Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company's stock exceeded the exercise price of the stock options at August 31, 2016, for those stock options for which the quoted market price was in excess of the exercise price ("in-the-money options"). As of August 31, 2016, the aggregate intrinsic value of options outstanding was approximately $16,000 based on the closing market price of $0.0088 on August 31, 2016.
Note 8 – Subsequent Events
Subsequent to August 31, 2016, a total of $92,076 convertible debts and accrued interest was converted, resulting in the issuance of 30,594,925 common shares.