Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.19.3
Stockholders' Equity
3 Months Ended
Aug. 31, 2019
Equity [Abstract]  
Stockholders' Equity

NOTE 9 — STOCKHOLDERS’ EQUITY

 

Common Stock

 

The Company is authorized to issue 20,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the shares of the Company’s common stock are entitled to one vote for each share. At August 31, 2019, there were 7,753,975 shares of common stock issued and outstanding.

 

Preferred Stock

 

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. At August 31, 2019, there were no shares of preferred stock issued or outstanding.

 

Private Placement

 

Beginning in February 2019, the Company sold units in connection with a private offering by the Company to raise working capital of up to $2,000,000 (the “Offering Amount” ) through the sale to accredited investors only of up to up to 1,000,000 “Units” of the Company’s securities, at a purchase price of $2.00 per Unit, with each Unit consisting of (i) one share of common stock, par value $0.0001 per share of the Company (the “Common Stock”) and (ii) a warrant to purchase one share of Common Stock, exercisable at a price of $4.00 per share, exercisable at any time within five years of issuance (each, a “Warrant”) as provided for in the Company’s Term Sheet for Unit Offering dated February 6, 2019 (the “Term Sheet”).

 

For the year ended May 31, 2019, the Company sold 962,500 units for gross proceeds of $1,925,000. During the three months ended August 31, 2019, the Company sold 25,000 units for gross proceeds of $50,000, the common shares underlying the units have not been issued yet and the $50,000 is included on the balance sheet with current liabilities.

 

During the three months ended August 31, 2019, the Company issued 750,000 shares of common stock for the acquisition of PLAYLive. The shares were valued at $1,440,000 the fair value at the time of issuance.

 

Stock Based Compensation

 

On March 27, 2019, the Company issued 180,000 shares of common stock to 3 employees. The shares were issued in conjunction with their employment agreements and vest ratably through December 31, 2019. As of August 31, 2019, 120,000 shares have vested, and for the year ended May 31, 2019 and the three months ended August 31, 2019, the Company recognized $27,000 and $45,000 of stock-based compensation, respectively, based on the trading price on March 27, 2019 (measurement date) of $0.60 per share. As of August 31, 2019, unrecognized compensation cost related to these shares is $36,000.

 

Warrants

 

For the year ended May 31, 2018, the Company issued 5,461,500 warrants in conjunction with its Initial Public Offering. These warrants are exercisable for five years from November 20, 2018, the date of the initial business combination and have an exercise price equal to $11.50.

 

For the year ended May 31, 2019, the Company issued 962,500 warrants in conjunction with the above mentioned private placement. These warrants are exercisable for 5 years and have an exercise price of $4.00

 

A summary of the status of the Company’s outstanding stock warrants for the three months ended August 31, 2019 is as follows:

 

    Number of
Shares
    Average
Exercise
Price
    Expiration
Date
Outstanding – May 31, 2019     6,424,000       10.38      
                     
Granted – August 31, 2019     -              
Outstanding – August 31, 2019     6,424.000     $ 10.38     May 2024
Warrants exercisable at August 31, 2019     6,424,000