Protalex (PRTX) 10-Q 10 Jan 18 2018 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Nov. 30, 2017	Jan. 10, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Nov. 30, 2017
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Entity Registrant Name	PROTALEX INC
Entity Central Index Key	1,099,215
Current Fiscal Year End Date	--05-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	PRTX
Entity Common Stock, Shares Outstanding		28,767,582

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($)	Nov. 30, 2017	May 31, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 258,215	$ 487,383
Prepaid expenses	134,125	107,209
Total current assets	392,340	594,592
OTHER ASSETS:
Intellectual technology property, net of accumulated amortization of $17,658 and $17,148 as of November 30, 2017 and May 31, 2017, respectively	1,877	2,387
Total other assets	1,877	2,387
Total Assets	394,217	596,979
CURRENT LIABILITIES:
Accounts payable	507,049	489,029
Accrued expenses	37,107	57,786
Senior Secured Note - related party	21,949,366	0
Senior Secured Note Accrued Interest - related party	1,809,792	0
Total current liabilities	24,303,314	546,815
LONG TERM LIABILITIES:
Senior Secured Note - related party	0	20,299,366
Senior Secured Note Accrued Interest - related party	0	1,490,416
Total liabilities	24,303,314	22,336,597
STOCKHOLDERS' (DEFICIT)
Preferred stock, par value $0.00001, 1,000,000 shares authorized; none issued and outstanding	0	0
Common stock, par value $0.00001, 100,000,000 shares authorized; 28,767,582 and 28,767,582 shares issued and outstanding, respectively	288	288
Additional paid in capital	77,446,343	77,446,343
Accumulated deficit	(101,355,728)	(99,186,249)
Total stockholders’ (deficit)	(23,909,097)	(21,739,618)
Total liabilities and stockholders’ (deficit)	$ 394,217	$ 596,979

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - USD ($)	Nov. 30, 2017	May 31, 2017
Intellectual technology property, accumulated amortization	$ 17,658	$ 17,148
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	28,767,582	28,767,582
Common stock, shares outstanding	28,767,582	28,767,582

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Revenues	$ 0	$ 0	$ 0	$ 0
Operating Expenses
Research and development	548,050	475,859	1,229,879	924,839
Administrative	153,288	94,479	295,678	452,416
Professional fees	141,095	214,132	324,038	546,038
Depreciation and amortization	255	255	510	510
Operating loss	(842,688)	(784,725)	(1,850,105)	(1,923,803)
Other income (expense)
Interest income	1	1	2	2
Interest expense	(161,815)	(135,467)	(319,376)	(264,807)
Loss before income taxes	(1,004,502)	(920,191)	(2,169,479)	(2,188,608)
Provision for income taxes	0	0	0	0
Net loss	$ (1,004,502)	$ (920,191)	$ (2,169,479)	$ (2,188,608)
Weighted average number of common shares outstanding	28,767,582	28,767,582	28,767,582	28,767,582
Loss per common share - basic and diluted	$ (0.03)	$ (0.03)	$ (0.08)	$ (0.08)

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,169,479)	$ (2,188,608)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Depreciation and amortization	510	510
Equity based expense	0	180,333
(Increase)/decrease in:
Prepaid expenses and deposits	(26,916)	(109,097)
Increase/(decrease) in:
Accounts payable and accrued expenses	316,717	256,233
Net cash and cash equivalents used in operating activities	(1,879,168)	(1,860,629)
CASH FLOWS FROM INVESTING ACTIVITIES:	0	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of note payable to individuals	1,650,000	2,130,000
Net cash and cash equivalents provided by financing activities	1,650,000	2,130,000
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(229,168)	269,371
Cash and cash equivalents, beginning of period	487,383	444,179
Cash and cash equivalents, ending of period	258,215	713,550
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Interest paid	0	0
Taxes paid	0	0
NON-CASH FINANCING ACTIVITIES:
Conversion of debt for equity	$ 0	$ 0

ORGANIZATION AND BUSINESS ACTIV

ORGANIZATION AND BUSINESS ACTIVITIES	6 Months Ended
	Nov. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BUSINESS ACTIVITIES	NOTE 1. ORGANIZATION AND BUSINESS ACTIVITIES The Company is focused on the development of a class of biopharmaceutical drugs for treating autoimmune and inflammatory diseases including rheumatoid arthritis (RA) and Immune Thrombocytopenia (ITP). Its lead product, PRTX-100, is a highly-purified form of Staphylococcal protein A, a bacterial protein known to modify aspects of the human immune system. The Company maintains an administrative office in Florham Park, New Jersey and currently outsources all of its product development and regulatory activities, including clinical trial activities, manufacturing and laboratory operations, to third-party contract research organizations and facilities. In April 2009, the Company ceased all operations and terminated all employees in light of insufficient funds to continue its clinical trials and related product development. The Company’s business was dormant until new management took control of its operations in November 2009. Since then the Company has been actively pursuing the commercial development of PRTX-100 for the treatment of RA and ITP. In the United States, the Company has open Investigational New Drug (IND) applications for the treatment of RA and ITP and in Europe, an open Investigational Medicinal Products Dossier (IMPD) for ITP. PRTX-100 has demonstrated effectiveness in animal models of autoimmune diseases as well as demonstrated activity on cultured human immune cells at very low concentrations, although the effectiveness of PRTX-100 shown in pre-clinical studies using animal models may not be predictive of the results of future human clinical trials. The safety, tolerability and pharmakinetics of PRTX-100 in humans have been characterized in six clinical studies and PRTX-100 has been granted Orphan Drug Designation (ODD) in the United States and Europe for the treatment of ITP. The Company does not anticipate generating operating revenue for the foreseeable future and does not currently have any products that are marketable.

GOING CONCERN

GOING CONCERN	6 Months Ended
	Nov. 30, 2017
Going Concern Disclosure [Abstract]
GOING CONCERN	NOTE 2. GOING CONCERN The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The ability of the Company to continue as a going concern is dependent upon developing products that receive regulatory approval and market acceptance. There is no assurance that these benchmarks will be realized. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. There is substantial doubt about the Company’s ability to continue as a going concern. From inception through November 30, 2017, the Company has incurred an accumulated deficit of $101,355,728. For the years ended May 31, 2017 and 2016, the Company had net losses of $4,563,721 and $9,415,450, respectively, and for the six months ended November 30, 2017, the Company had a net loss of $2,169,479. The Company utilized $3,936,796 and $4,279,100 of cash for operating activities for the years ended May 31, 2017 and 2016, respectively, and $1,879,168 during the six months ended November 30, 2017. As of November 30, 2017, the Company had cash and cash equivalents of $285,215 and negative net working capital of $23,910,974. The Company has incurred negative cash flow from operating activities since its inception. The Company has spent, and subject to obtaining additional financing, expects to continue to spend, substantial amounts in connection with executing its business strategy, including continued development efforts relating to PRTX-100. The Company has no significant payments due on long-term obligations. However, the Company anticipates entering into significant contracts to perform product manufacturing and to conduct clinical trials in the future and that it will need to raise additional capital to fund the ongoing FDA regulatory approval process. If the Company is unable to obtain approval of its future IND applications or otherwise advance the FDA approval process, its ability to sustain its operations would be significantly jeopardized. The most likely sources of additional financing include the sale of the Company’s equity or debt securities. On June 3, 2016, the Company filed Amendment #1 to the Registration Statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) (SEC File No. 333-206008), originally filed on July 31, 2015, with respect to a proposed public offering of Company securities. There is no assurance that the Company will consummate a public offering of its securities, or any other offering. Accordingly, additional capital that is required by the Company may not be available on reasonable terms, or at all.

BASIS OF PRESENTATION AND SUMMA

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Nov. 30, 2017
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The interim financial data contained in this Report is unaudited; however in the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim period. The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. The results of operations in interim periods are not necessarily indicative of the results that may be expected for the full year. Information regarding the organization and business of the Company, accounting policies followed by the Company and other important information is contained in the notes to the Company's financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2017. This Report should be read in conjunction with the Company’s Annual Report. Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions affecting the reported amounts of assets, liabilities, and expense, and the disclosure of contingent assets and liabilities. Estimated amounts could differ from actual results. Loss per Common Share The Financial Accounting Standards Board (FASB) has issued guidance for “Earnings Per Share” which provides for the calculation of “Basic” and “Diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net loss to common stockholders by the weighted average number of common shares outstanding for the period. All potentially dilutive securities consisting of employee stock options and warrants have been excluded from the computations since they would be antidilutive. However, these dilutive securities could potentially dilute earnings per share in the future. As of November 30, 2017 and November 30, 2016, the Company had potentially dilutive securities consisting of 4,180,543 and 3,982,543 stock options, respectively. Cash and Cash Equivalents For the purposes of reporting cash flows, the Company considers all cash accounts which are not subject to withdrawal restrictions or penalties, and highly liquid investments with original maturities of 90 days or less to be cash and cash equivalents. The cash and cash equivalent deposits are not insured by The Federal Deposit Insurance Corporation. Reclassifications Certain reclassifications have been made to the prior periods to conform to the current presentations in the financial statements. Research and Development Research and development costs are expensed as incurred. Share Based Compensation Effective June 1, 2006, the Company adopted the FASB accounting guidance for fair value recognition provisions of the “Accounting for Share-Based Payment”. This standard requires the Company to measure the cost of employee services received in exchange for equity share options granted based on the grant-date fair value of the options. The cost is recognized as compensation expense over the vesting period of the options. The fair value of compensation costs attributed to equity rights issued was $0 and $180,333 and is included in operating expenses for the six months ended November 30, 2017 and November 30, 2016, respectively. These amounts included both the compensation cost of stock options granted prior to but not yet vested as of June 1, 2006 and compensation cost for all options granted subsequent to May 31, 2006. In accordance with the modified prospective application transition method, prior period results are not restated. Incremental compensation cost for a modification of the terms or conditions of an award is measured by comparing the fair value of the modified award with the fair value of the award immediately before the modification. No tax benefit was recorded as of November 30, 2017 in connection with these compensation costs due to the uncertainty regarding ultimate realization of certain net operating loss carryforwards. The Company has also implemented the SEC interpretations in Staff Accounting Bulletin (SAB) for “Share-Based Payments,” in connection with the adoption of FASB accounting guidance. The accounting guidance requires the use of a valuation model to calculate the fair value of each stock-based award. The Company uses the Black-Scholes model to estimate the fair value of stock options granted based on the following assumptions: Expected Term or Life Expected Volatility Risk-Free Interest Rate. At November 30, 2017, there were 4,180,543 stock options outstanding, of which 3,980,543 were exercisable. At November 30, 2017, the aggregate unrecognized compensation cost of unvested options, as determined using a Black-Scholes option valuation model, was $0. The remaining options will be valued once they vest upon the future events. The Company did not grant any options during the six months ended November 30, 2017, and 400,000 options expired.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Nov. 30, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 4. RECENT ACCOUNTING PRONOUNCEMENTS Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances. In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this ASU provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt,

RELATED PARTIES

RELATED PARTIES	6 Months Ended
	Nov. 30, 2017
Related Party Transactions [Abstract]
RELATED PARTIES	NOTE 5. RELATED PARTIES Niobe Ventures, LLC, a Delaware limited liability company (“Niobe”), the majority stockholder of the Company and the holder of the Consolidated Note (defined in Note 6, below), is controlled by Arnold P. Kling, the Company’s president and director.

SENIOR SECURED NOTES - RELATED

SENIOR SECURED NOTES - RELATED PARTY	6 Months Ended
	Nov. 30, 2017
Debt Disclosure [Abstract]
SENIOR SECURED NOTES - RELATED PARTY	NOTE 6. SENIOR SECURED NOTES - RELATED PARTY On October 11, 2013, the Company issued a Consolidated, Amended and Restated Promissory Note to Niobe in the principal amount of $9,219,366 (the “Consolidated Note”). The face amount of the Consolidated Note reflects the $9.0 million aggregate principal amount of outstanding secured notes then held by Niobe (the “Secured Notes”) plus interest accrued at 3% per annum on each note from its respective date of issuance. The terms of the Consolidated Note were identical to the Secured Notes except that: (a) the maturity date was changed to September 1, 2015, which was after the latest maturity date of any of the Secured Notes; and (b) it provided for partial mandatory repayment in the event that the Company received aggregate gross proceeds in excess of $7.5 million from a single or multiple “Liquidity Events” in an amount equal to twenty-five (25%) percent of such gross proceeds (the “Mandatory Prepayment Amount”). A “Liquidity Event” means (a) the sale of any of the Company’s equity, or equity-linked, securities, and (b) the receipt of proceeds, directly or indirectly related to a development and/or commercialization relationship entered into with an unaffiliated third party. In the Secured Notes, the entire principal amount of each note was due, at Niobe’s election, upon the consummation of an equity financing of $7.5 million or greater. Consistent with the terms of the Secured Notes and related security agreements entered into, the Company’s obligations under the Consolidated Note are secured by a first priority perfected security interest in all of the Company’s assets pursuant to a Consolidated, Amended and Restated Security Agreement dated October 11, 2013. On November 4, 2014, the Company entered into a new Credit Facility Agreement (the “2014 Credit Facility Agreement”) pursuant to which the Company may borrow up to an additional $5.0 Million from Niobe, in the form of secured loans, at any time prior to December 31, 2015 (the “2014 Credit Facility”). Each loan made to the Company by Niobe under the 2014 Credit Facility Agreement has been represented by a senior secured promissory note bearing interest at a rate of 3% per annum which matures on September 1, 2016 (each an “Original Note”). The obligations of the Company pursuant to each Original Note have been secured by a first priority perfected security interest in all of the assets of the Company pursuant to the Second Consolidated, Amended and Restated Security Agreement between the Company and Niobe, entered into at the same time as the 2014 Credit Facility Agreement (the “Security Agreement”). In addition, on November 4, 2014, the Company entered into a Note Modification Agreement (the “Note Modification Agreement”) with Niobe pursuant to which the Consolidated Note was further amended to increase the threshold amount requiring a Mandatory Prepayment from $7.5 Million to more than $10 Million. As a result, partial prepayment will now be triggered in the event of a Liquidity Event in which the Company receives gross proceeds in excess of $10 million. All other terms and provisions of the Consolidated Note remained unchanged and in full force and effect. On December 1, 2015, the 2014 Credit Facility was amended to increase the funds available for loans to the Company to $ million and to extend the expiration date of such credit facility to December 31, 2016 pursuant to which the Company and Niobe entered into and an Amended and Restated 2014 Credit Facility Agreement (the “Amended and Restated Agreement”). Each loan under the Amended and Restated Agreement has been and will be represented by a senior secured promissory note bearing interest at a rate of % per annum which matures on (each a “New Note”). In addition, the Security Agreement was also amended and restated to secure the Company’s obligations under all the Original Notes and all the New Notes. On June 30, 2016, the 2014 Credit Facility was again amended to increase the funds available for loans to the Company to $9.0 million (the “Second Amended and Restated Agreement”). Each loan under the Second Amended and Restated Agreement has been represented by a New Note. In addition, the Security Agreement was also amended and restated to secure the Company’s obligations under all the notes issued and outstanding under the 2014 Credit Facility as of June 30, 2016 and all the New Notes issued pursuant to the Second Amended and Restated Agreement. On August 31, 2016, the Company and Niobe agreed to extend the maturity date of the Consolidated Note and the maturity dates of all thirteen outstanding Original Notes with an aggregate principal amount of $5,030,000, from September 1, 2016 to September 1, 2017. All other terms and provisions of the Consolidated Note and Original Notes remained unchanged and in full force and effect. On October 31, 2016, the 2014 Credit Facility was amended to increase the funds available for loans to the Company to $11.25 million and to extend the expiration date of such facility to June 15, 2017 (the “Third Amended and Restated Agreement”). Each loan under the Third Amended and Restated Agreement will be represented by a senior secured promissory note bearing interest at a rate of 3% per annum which matures on March 31, 2018 (each a “2018 Note”). The Security Agreement was also amended and restated to secure the Company’s obligations under all the notes issued under the 2014 Credit Facility as of October 31, 2016 and all the 2018 Notes. In addition, the Company and Niobe also agreed to extend to March 31, 2018, the maturity dates of the Consolidated Note and all the notes issued and outstanding under the 2014 Credit Facility as of October 31, 2016. As of May 31, 2017, the outstanding principal balance under the 2014 Credit Facility totaled $11,080,000. During the year ended May 31, 2017, the Company borrowed an aggregate of $3,980,000. On June 1, 2017, the 2014 Credit Facility was amended to increase the funds available for loans to the Company to $ million and to extend the expiration date of such facility to (the “Fourth Amended and Restated Agreement”). Each loan under the Fourth Amended and Restated Agreement will be represented by a 2018 Note. The Security Agreement was also amended and restated to also secure the Company’s obligations under all 2018 Notes issued pursuant to the Fourth Amended and Restated Agreement. On August 22, 2017, the Company and Niobe agreed to extend the maturity date of all outstanding notes issued to Niobe from the current maturity date of March 31, 2018 to a new maturity date of September 1, 2018. All other terms and provisions of such notes remained unchanged and in full force and effect. As of November 30, 2017, the outstanding principal balance under the 2014 Credit Facility totaled $12,730,000. During the six months ended November 30, 2017, the Company borrowed an aggregate of $1,650,000; $290,000 on June 15, 2017, $290,000 on July 10, 2017, $290,000 on August 10, 2017, $290,000 on September 15, 2017, $290,000 on October 23, 2017 and $200,000 on November 17, 2017. Payment of the principal and accrued interest on all outstanding notes issued under the 2014 Credit Facility will, at Niobe’s election, automatically become immediately due and payable if the Company undertakes certain Fundamental Transactions or upon an Event of Default, both as defined in such notes. The Company’s obligations under all such notes are secured by the Security Agreement, as amended.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Nov. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 7. SUBSEQUENT EVENTS On December 15, 2017, the Company borrowed an additional $200,000 under the terms of the Fourth Amended and Restated Agreement and issued Niobe a 2018 Note with a maturity date of September 1, 2018 for the loan in the same principal amount. The Company has evaluated all other subsequent events and has determined that there were no other subsequent events to recognize or disclose in these financial statements.

BASIS OF PRESENTATION AND SUM13

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Nov. 30, 2017
Accounting Policies [Abstract]
Estimates	Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions affecting the reported amounts of assets, liabilities, and expense, and the disclosure of contingent assets and liabilities. Estimated amounts could differ from actual results.
Loss per Common Share	Loss per Common Share The Financial Accounting Standards Board (FASB) has issued guidance for “Earnings Per Share” which provides for the calculation of “Basic” and “Diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net loss to common stockholders by the weighted average number of common shares outstanding for the period. All potentially dilutive securities consisting of employee stock options and warrants have been excluded from the computations since they would be antidilutive. However, these dilutive securities could potentially dilute earnings per share in the future. As of November 30, 2017 and November 30, 2016, the Company had potentially dilutive securities consisting of 4,180,543 and 3,982,543 stock options, respectively.
Cash and Cash Equivalents	Cash and Cash Equivalents For the purposes of reporting cash flows, the Company considers all cash accounts which are not subject to withdrawal restrictions or penalties, and highly liquid investments with original maturities of 90 days or less to be cash and cash equivalents. The cash and cash equivalent deposits are not insured by The Federal Deposit Insurance Corporation.
Reclassifications	Reclassifications Certain reclassifications have been made to the prior periods to conform to the current presentations in the financial statements.
Research and Development	Research and Development Research and development costs are expensed as incurred.
Share Based Compensation	Share Based Compensation Effective June 1, 2006, the Company adopted the FASB accounting guidance for fair value recognition provisions of the “Accounting for Share-Based Payment”. This standard requires the Company to measure the cost of employee services received in exchange for equity share options granted based on the grant-date fair value of the options. The cost is recognized as compensation expense over the vesting period of the options. The fair value of compensation costs attributed to equity rights issued was $0 and $180,333 and is included in operating expenses for the six months ended November 30, 2017 and November 30, 2016, respectively. These amounts included both the compensation cost of stock options granted prior to but not yet vested as of June 1, 2006 and compensation cost for all options granted subsequent to May 31, 2006. In accordance with the modified prospective application transition method, prior period results are not restated. Incremental compensation cost for a modification of the terms or conditions of an award is measured by comparing the fair value of the modified award with the fair value of the award immediately before the modification. No tax benefit was recorded as of November 30, 2017 in connection with these compensation costs due to the uncertainty regarding ultimate realization of certain net operating loss carryforwards. The Company has also implemented the SEC interpretations in Staff Accounting Bulletin (SAB) for “Share-Based Payments,” in connection with the adoption of FASB accounting guidance. The accounting guidance requires the use of a valuation model to calculate the fair value of each stock-based award. The Company uses the Black-Scholes model to estimate the fair value of stock options granted based on the following assumptions: Expected Term or Life Expected Volatility Risk-Free Interest Rate. At November 30, 2017, there were 4,180,543 stock options outstanding, of which 3,980,543 were exercisable. At November 30, 2017, the aggregate unrecognized compensation cost of unvested options, as determined using a Black-Scholes option valuation model, was $0. The remaining options will be valued once they vest upon the future events. The Company did not grant any options during the six months ended November 30, 2017, and 400,000 options expired.

GOING CONCERN - Additional Info

GOING CONCERN - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016	May 31, 2017	May 31, 2016
Cash Flow Supplemental Disclosures [Line Items]
Deficit accumulated during the development stage	$ 101,355,728		$ 101,355,728
Net loss	1,004,502	$ 920,191	2,169,479	$ 2,188,608	$ 4,563,721	$ 9,415,450
Net Cash Provided by (Used in) Operating Activities, Continuing Operations, Total			(1,879,168)	(1,860,629)	3,936,796	4,279,100
Cash and cash equivalents	258,215	$ 713,550	258,215	$ 713,550	$ 487,383	$ 444,179
Net working capital deficit	$ 23,910,974		$ 23,910,974

BASIS OF PRESENTATION AND SUM15

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($)	6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation, number of stock options outstanding	4,180,543
Aggregate unrecognized compensation cost of unvested options	$ 0
Share based compensation, number of stock options expired during period	400,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	3,980,543
Operating Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost included in operating expenses	$ 0	$ 180,333
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,180,543	3,982,543

SENIOR SECURED NOTES - RELATE16

SENIOR SECURED NOTES - RELATED PARTY - Additional Information (Detail) - USD ($)

Aug. 10, 2017

Jul. 10, 2017

Nov. 04, 2014

Oct. 11, 2013

Nov. 17, 2017

Oct. 23, 2017

Sep. 15, 2017

Aug. 22, 2017

Jun. 15, 2017

Jun. 02, 2017

Oct. 31, 2016

Dec. 02, 2015

Nov. 30, 2017

Nov. 30, 2016

May 31, 2017

Aug. 31, 2016

Jun. 30, 2016

Related Party Transaction [Line Items]

Proceeds From Notes Payable

$ 1,650,000

$ 2,130,000

Long-term Line of Credit

12,730,000

Proceeds from Lines of Credit

$ 290,000

$ 290,000

$ 200,000

$ 290,000

$ 290,000

$ 290,000

$ 1,650,000

Senior Secured Note

Related Party Transaction [Line Items]

Debt instrument, face amount

$ 9,000,000

Secured note payable, interest rate

3.00%

3.00%

3.00%

Debt instrument carrying amount

$ 9,219,366

Terms of consolidated note identical to secured notes

(a) the maturity date was changed to September 1, 2015, which was after the latest maturity date of any of the Secured Notes; and (b) it provided for partial mandatory repayment in the event that the Company received aggregate gross proceeds in excess of $7.5 million from a single or multiple Liquidity Events in an amount equal to twenty-five (25%) percent of such gross proceeds (the Mandatory Prepayment Amount).

Consummation of equity financing, amount

$ 13,050,000

$ 11,250,000

$ 7,500,000

Description of Liquidity Event

(a) the sale of any of the Companys equity, or equity-linked, securities, and (b) the receipt of proceeds, directly or indirectly related to a development and/or commercialization relationship entered into with an unaffiliated third party.

Line of Credit Facility, Maximum Borrowing Capacity

$ 9,000,000

Debt Instrument, Maturity Date

Sep. 1, 2018

Mar. 31, 2018

Mar. 31, 2018

Sep. 1, 2017

Niobe Ventures LLC

Related Party Transaction [Line Items]

Debt instrument, face amount

$ 5,030,000

Notes Payable

$ 7,500,000

Niobe Ventures LLC | Senior Secured Note

Related Party Transaction [Line Items]

Debt instrument, face amount

$ 11,080,000

Secured note payable, interest rate

3.00%

Line of Credit Facility, Remaining Borrowing Capacity

$ 5,000,000

Proceeds From Notes Payable

10,000,000

$ 3,980,000

Niobe Ventures LLC | Senior Secured Note | Minimum

Related Party Transaction [Line Items]

Notes Payable

7,500,000

Niobe Ventures LLC | Senior Secured Note | Maximum

Related Party Transaction [Line Items]

Notes Payable

$ 10,000,000

SUBSEQUENT EVENTS - Additional

SUBSEQUENT EVENTS - Additional Information (Detail) - USD ($)	Dec. 15, 2017	Aug. 31, 2016
Niobe Ventures, LLC
Subsequent Event [Line Items]
Debt Instrument, Face Amount		$ 5,030,000
Subsequent Event
Subsequent Event [Line Items]
Debt Instrument, Face Amount	$ 200,000
Debt Instrument, Maturity Date	Sep. 1, 2018