Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Aug. 31, 2018 | Oct. 12, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 31, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | PROTALEX INC | |
Entity Central Index Key | 1,099,215 | |
Current Fiscal Year End Date | --05-31 | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | PRTX | |
Entity Common Stock, Shares Outstanding | 47,325,387 | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | true |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Aug. 31, 2018 | May 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 114,876 | $ 555,411 |
Prepaid expenses | 40,082 | 74,386 |
Total current assets | 154,958 | 629,797 |
OTHER ASSETS: | ||
Intellectual technology property, net of accumulated amortization of $18,423 and $18,168 as of August 31, 2018 and May 31, 2018, respectively | 1,112 | 1,367 |
Total other assets | 1,112 | 1,367 |
Total Assets | 156,070 | 631,164 |
CURRENT LIABILITIES: | ||
Accounts payable | 468,467 | 428,383 |
Accrued expenses | 146,577 | 200,752 |
Total current liabilities | 615,044 | 629,135 |
LONG TERM LIABILITIES: | ||
Note Payable – related party | 2,004,408 | 1,989,322 |
Senior Convertible Debt - net of discount ($1,475,000 face value less Senior Convertible Debt Discount of $1,324,382 at August 31, 2018 and $1,399,873 at May 31, 2018) | 150,618 | 75,127 |
Senior Secured Convertible Note – Accrued Interest | 75,747 | 37,514 |
Total liabilities | 2,845,817 | 2,731,098 |
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; 47,325,387 and 47,325,387 shares issued and outstanding, respectively | 473 | 473 |
Additional paid in capital | 102,308,325 | 102,122,025 |
Accumulated deficit | (104,998,545) | (104,222,432) |
Total stockholders' (deficit) | (2,689,747) | (2,099,934) |
Total liabilities and stockholders' (deficit) | $ 156,070 | $ 631,164 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Aug. 31, 2018 | May 31, 2018 |
Intellectual technology property, accumulated amortization | $ 18,423 | $ 18,168 |
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 | 47,325,387 | 47,325,387 |
Common stock, shares outstanding | 47,325,387 | 47,325,387 |
Senior Convertible Debt [Member] | ||
Debt Instrument, Face Amount | $ 1,475,000 | $ 1,475,000 |
Debt Instrument, Unamortized Discount, Noncurrent | $ 1,324,382 | $ 1,399,873 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Revenues | $ 0 | $ 0 |
Operating Expenses | ||
Research and development | 248,933 | 681,829 |
Administrative | 297,730 | 142,390 |
Professional fees | 100,386 | 182,943 |
Depreciation and amortization | 255 | 255 |
Operating loss | (647,304) | (1,007,417) |
Other income (expense) | ||
Interest income | 1 | 1 |
Interest expense | (128,810) | (157,561) |
Loss before income taxes | (776,113) | (1,164,977) |
Provision for income taxes | 0 | 0 |
Net loss | $ (776,113) | $ (1,164,977) |
Weighted average number of common shares outstanding | 47,325,387 | 28,767,582 |
Loss per common share – basic and diluted | $ (0.02) | $ (0.04) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (776,113) | $ (1,164,977) |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | ||
Amortization of debt discount | 75,491 | 0 |
Depreciation and amortization | 255 | 255 |
Equity based expense | 186,300 | 0 |
(Increase)/decrease in: | ||
Prepaid expenses and deposits | 34,304 | 49,076 |
Increase/(decrease) in: | ||
Accounts payable and accrued expenses | (14,091) | 77,960 |
Accrued interest payable | 53,319 | 157,561 |
Net cash and cash equivalents used in operating activities | (440,535) | (880,125) |
CASH FLOWS FROM INVESTING ACTIVITIES: | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of note payable to individuals | 0 | 870,000 |
Net cash and cash equivalents provided by financing activities | 0 | 870,000 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (440,535) | (10,125) |
Cash and cash equivalents, beginning of period | 555,411 | 487,383 |
Cash and cash equivalents, ending of period | 114,876 | 477,258 |
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION: | ||
Interest paid | 0 | 0 |
Taxes paid | $ 0 | $ 0 |
ORGANIZATION AND BUSINESS ACTIV
ORGANIZATION AND BUSINESS ACTIVITIES | 3 Months Ended |
Aug. 31, 2018 | |
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 | 3 Months Ended |
Aug. 31, 2018 | |
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 August 31, 2018, the Company has incurred an accumulated deficit of $104,998,545. For the years ended May 31, 2018 and 2017 and three months ended August 31, 2018, the Company had net losses of $5,036,183, $4,563,721 and $776,113, respectively. The Company utilized $3,376,972, $3,936,796 and $440,535 of cash for operating activities for the years ended May 31, 2018 and 2017, and three months ended August 31, 2018, respectively. As of August 31, 2018, the Company had cash and cash equivalents of $114,876 and net negative working capital of $ 460,086 The Company does not anticipate generating operating revenue for the foreseeable future and do not currently have any products that are marketable. In order to continue its research and development program and commercialization efforts the Company will require substantial additional working capital. The Company currently has no agreements or commitments with respect to raising the working capital necessary to continue its research and development program and commercialization efforts. Although the Company is exploring all options to raise working capital, if it is not successful in imminently raising additionally working capital, it will be forced to substantially scale back, suspend or discontinue operations. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Aug. 31, 2018 | |
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, 2018. 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 August 31, 2018 and August 31, 2017, the Company had a total of 5,560,543 and 3,980,543, respectively, of Common Stock underlying exercisable stock options and shares from convertible debt of $1,475,000 as of August 31, 2018 of potentially dilutive securities. 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 $186,300 and $0 and is included in operating expenses for the three months ended August 31, 2018 and August 31, 2017, 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 August 31, 2018 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 . The expected term or life of stock options granted issued represents the expected weighted average period of time from the date of grant to the estimated date that the stock option would be fully exercised. The weighted average expected option term was determined using a combination of the “simplified method” for plain vanilla options as allowed by the accounting guidance. The “simplified method” calculates the expected term as the average of the vesting term and original contractual term of the options. Expected Volatility . Expected volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate. Expected volatility is based on the historical daily volatility of the price of our common shares. The Company estimated the expected volatility of the stock options at grant date. Risk-Free Interest Rate. The risk-free interest rate is based on the implied yield on U.S. Treasury zero-coupon issues with remaining terms equivalent to the expected term of our stock-based awards. At August 31, 2018, there were 6,940,543 stock options outstanding, of which 5,560,543 were exercisable. At August 31, 2018, the aggregate unrecognized compensation cost of unvested options, as determined using a Black-Scholes option valuation model, was $372,600. The remaining options will be valued once they vest upon the future events. The Company did not grant any options during the three months ended August 31, 2018, and no options expired. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Aug. 31, 2018 | |
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. The amendments in ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. ASU 2017-11 defines down round feature as: “A feature in a financial instrument that reduces the strike price of an issued financial instrument if the issuer sells shares of its stock for an amount less than the currently stated strike price of the issued financial instrument or issues an equity-linked financial instrument with a strike price below the currently stated strike price of the issued financial instrument. A down round feature may reduce the strike price of a financial instrument to the current issuance price, or the reduction may be limited by a floor or on the basis of a formula that results in a price that is at a discount to the original exercise price but above the new issuance price of the shares, or may reduce the strike price to below the current issuance price. A standard antidilution provision is not considered a down round feature” Early Adoption ASU 2017-11 - For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period prior to ASU 2017-11. The Company has elected to early adopt this standard and has no other instruments from prior periods that are affected by this adoption. |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Aug. 31, 2018 | |
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 | 3 Months Ended |
Aug. 31, 2018 | |
Debt Disclosure [Abstract] | |
SENIOR SECURED NOTES - RELATED PARTY | NOTE 6. SENIOR SECURED NOTES - RELATED PARTY As of May 31, 2018, as a result of the Exchange Agreement, described below, the outstanding principal balance under the Senior Secured Debt to Niobe totaled $0. On February 28, 2018, the Company raised an aggregate of $1.425 million from eight accredited investors in a private placement financing (the “Offering”) of 10% Senior Convertible Notes, due on February 28, 2023 (the “Senior Notes”). No commissions were paid in connection with the Offering which was principally sold to certain existing stockholders of the Company. Proceeds of the Offering sed for working capital purposes, principally to fund ongoing clinical trials and studies and related activities. No registration rights were granted to the investors in the Offering. The Senior Notes are convertible into shares of Common Stock at a price of $0.20 per share at the option of the holder prior to maturity or earlier prepayment, accrue interest at the rate of 10% per annum and are due on February 28, 2023. Upon conversion, the note holder will receive 5,000 shares of the common stock of the Company for each $1,000 of principal or accrued interest converted. Two-thirds of the shares issuable upon any conversion of the Senior Notes will be acquired by the Company from Niobe for nominal consideration ($.01 per share) pursuant to a mandatory call agreement entered into in connection with the Offering (the “Call Agreement”). As a result, for each $1,000 of principal or interest converted, the Company will issue approximately 1,667 new shares. Accordingly, the Company’s effective conversion price will be approximately $0.60 per share of Common Stock, with Niobe incurring substantially all of the associated dilution. The closing price per share of Common Stock on the date of the Offering was $0.45. On March 13, 2018, the Company raised an additional $50,000 in the Offering and issued a Senior Note in the principal amount of $50,000 to an accredited investor. In connection with the foregoing, on March 13, 2018, the Call Agreement was amended and restated to also include two-thirds of the shares issuable upon the conversion of this Senior Note. The Company evaluated the conversion feature of the Senior Notes and determined that under the accounting guidance for “Accounting for Convertible Securities with Beneficial Conversion Features” that a value should be attributed to the embedded conversion feature. The Company determined the allocation to the conversion feature to be $1.475 million, which reduced the face amount of the Senior Notes carried on its balance sheet to -$ 0 As a condition to the consummation of the Offering, on February 28, 2018, the Company entered into an Exchange Agreement with Niobe (the “Exchange Agreement”) pursuant to which Niobe converted $22,269,367, the aggregate outstanding principal balance of the Senior Secured Debt due to Niobe, into 18,557,805 shares of Common Stock at a conversion price of $1.20 per share. This resulted in a gain on conversion of $13,918,354, which was recognized against equity and had no impact on the Statement of Operations. The Company also issued a promissory note, dated February 28, 2018, to Niobe in the principal amount of $1,974,349 bearing interest at a rate of 3% per annum and maturing on March 31, 2023 (the “Niobe Note”), for the accrued but unpaid interest on the notes converted by Niobe. At August 31, 2018, $2,004,408 was outstanding under the Niobe Note. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Aug. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 7. SUBSEQUENT EVENTS In September 2018, the Company borrowed $250,000 from Niobe and issued a promissory note to Niobe in the principal amount of $250,000 bearing interest at a rate of 3% per annum and maturing on March 31, 2023 (the “September 2018 Note”). The September 2018 Note is subordinate to the Senior Notes. The Company has evaluated subsequent events and has determined that there were no other subsequent events to recognize or disclose in these financial statements. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Aug. 31, 2018 | |
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 August 31, 2018 and August 31, 2017, the Company had a total of 5,560,543 and 3,980,543, respectively, of Common Stock underlying exercisable stock options and shares from convertible debt of $1,475,000 as of August 31, 2018 of potentially dilutive securities. |
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 $186,300 and $0 and is included in operating expenses for the three months ended August 31, 2018 and August 31, 2017, 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 August 31, 2018 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 . The expected term or life of stock options granted issued represents the expected weighted average period of time from the date of grant to the estimated date that the stock option would be fully exercised. The weighted average expected option term was determined using a combination of the “simplified method” for plain vanilla options as allowed by the accounting guidance. The “simplified method” calculates the expected term as the average of the vesting term and original contractual term of the options. Expected Volatility . Expected volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate. Expected volatility is based on the historical daily volatility of the price of our common shares. The Company estimated the expected volatility of the stock options at grant date. Risk-Free Interest Rate. The risk-free interest rate is based on the implied yield on U.S. Treasury zero-coupon issues with remaining terms equivalent to the expected term of our stock-based awards. At August 31, 2018, there were 6,940,543 stock options outstanding, of which 5,560,543 were exercisable. At August 31, 2018, the aggregate unrecognized compensation cost of unvested options, as determined using a Black-Scholes option valuation model, was $372,600. The remaining options will be valued once they vest upon the future events. The Company did not grant any options during the three months ended August 31, 2018, and no options expired. |
GOING CONCERN - Additional Info
GOING CONCERN - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | May 31, 2018 | May 31, 2017 | |
Cash Flow Supplemental Disclosures [Line Items] | ||||
Net loss | $ (776,113) | $ (1,164,977) | $ (5,036,183) | $ (4,563,721) |
Net Cash Provided by (Used in) Operating Activities, Continuing Operations, Total | (440,535) | (880,125) | 3,376,972 | 3,936,796 |
Cash and cash equivalents | 114,876 | $ 477,258 | 555,411 | $ 487,383 |
Working Capital | 460,086 | |||
Retained Earnings (Accumulated Deficit) | $ (104,998,545) | $ (104,222,432) |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail) - USD ($) | 3 Months Ended | |||
Aug. 31, 2018 | Aug. 31, 2017 | May 31, 2018 | Mar. 13, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate unrecognized compensation cost of unvested options | $ 372,600 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 5,560,543 | |||
Debt Instrument, Face Amount | $ 50,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | 0 | |||
Convertible Debt [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Debt Instrument, Face Amount | $ 1,475,000 | $ 1,475,000 | ||
Standalone Grants [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 6,940,543 | |||
Operating Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost included in operating expenses | $ 186,300 | $ 0 | ||
Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,560,543 | 3,980,543 |
SENIOR SECURED NOTES - RELATE_2
SENIOR SECURED NOTES - RELATED PARTY - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
May 31, 2018 | Mar. 13, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | May 31, 2018 | Feb. 28, 2018 | |
Related Party Transaction [Line Items] | ||||||
Debt instrument, face amount | $ 50,000 | |||||
Debt Instrument, Maturity Date | Mar. 13, 2018 | |||||
Debt Instrument, Convertible, Conversion Price | $ 0.60 | |||||
Debt Instrument, Principal or Interest Converted | $ 1,000 | |||||
Conversion of Stock, Shares Issued | 1,667 | |||||
Share Price | $ 0.01 | |||||
Amortization of Debt Discount (Premium) | $ 75,491 | $ 0 | ||||
Convertible Debt, Noncurrent | $ 75,127 | 150,618 | $ 75,127 | |||
Gain (Loss) on Extinguishment of Debt | 13,918,354 | |||||
Notes Payable, Related Parties, Noncurrent | 1,989,322 | $ 2,004,408 | 1,989,322 | |||
February and March [Member] | Private Placement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Aggregate of Accredited Investors | $ 1,425,000 | |||||
2014 Credit Facility [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Debt Instrument, Convertible, Conversion Price | $ 1.20 | |||||
Conversion of Stock, Shares Converted | 18,557,805 | |||||
Convertible Notes Payable, Current | $ 22,269,367 | |||||
Senior Notes [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Common Stock, Fair Market Value Per Share | $ 0.45 | |||||
Debt Instrument, Convertible, Beneficial Conversion Feature | $ 1,475,000 | |||||
Debt Instrument, Convertible, Remaining Discount Amortization Period | 60 months | |||||
Debt Instrument, Reduced Face Amount | $ 0 | |||||
Convertible Debt [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument, face amount | $ 1,475,000 | 1,475,000 | 1,475,000 | |||
Debt Instrument, Unamortized Discount, Noncurrent | $ 1,399,873 | $ 1,324,382 | $ 1,399,873 | |||
Senior Secured Convertible Notes | ||||||
Related Party Transaction [Line Items] | ||||||
Debt Instrument, Description | The Senior Notes are convertible into shares of Common Stock at a price of $0.20 per share at the option of the holder prior to maturity or earlier prepayment, accrue interest at the rate of 10% per annum and are due on February 28, 2023. Upon conversion, the note holder will receive 5,000 shares of the common stock of the Company for each $1,000 of principal or accrued interest converted. | |||||
Niobe Ventures LLC | Niobe Note [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument, face amount | $ 1,974,349 | |||||
Debt Instrument, Maturity Date | Mar. 31, 2023 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% |
SUBSEQUENT EVENTS - Additional
SUBSEQUENT EVENTS - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Sep. 30, 2018 | Mar. 13, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | |
Subsequent Event [Line Items] | ||||
Debt Instrument, Face Amount | $ 50,000 | |||
Debt Instrument, Maturity Date | Mar. 13, 2018 | |||
Proceeds from Notes Payable | $ 0 | $ 870,000 | ||
Subsequent Event | September 2018 Note [Member] | Niobe Ventures Llc [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt Instrument, Face Amount | $ 250,000 | |||
Debt Instrument, Maturity Date | Mar. 31, 2023 | |||
Proceeds from Notes Payable | $ 250,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% |