Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Feb. 28, 2017 | Apr. 06, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CLS HOLDINGS USA, INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --05-31 | |
Entity Common Stock, Shares Outstanding | 22,035,984 | |
Amendment Flag | false | |
Entity Central Index Key | 1,522,222 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Feb. 28, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 5,940 | $ 88,244 |
Prepaid expenses | 22,791 | 6,742 |
Total current assets | 28,731 | 94,986 |
Security deposit | 50,000 | 50,000 |
Property, plant and equipment, net of accumulated depreciation of $1,337 and $892 | 1,113 | 1,782 |
Construction in progress | 141,739 | 106,726 |
Intangible assets, net of accumulated amortization of $612 and $396 | 1,438 | 1,762 |
Total assets | 223,021 | 255,256 |
Current liabilities | ||
Accounts payable and accrued liabilities | 569,959 | 431,017 |
Accrued compensation, related party | 128,750 | 267,493 |
Due to related party | 17,930 | 17,930 |
Accrued interest | 57,518 | 41,116 |
Accrued interest, related party | 199,190 | 68,148 |
Notes payable, related parties | 167,000 | 0 |
Convertible notes payable, net of discount of $573,785 and $227,475 | 147,082 | 72,525 |
Convertible notes payable, related party, net of discount of $263,000 and $95,447 | 731,156 | 22,678 |
Derivative liability | 167,372 | 418,537 |
Total current liabilities | 2,185,957 | 1,339,444 |
Noncurrent liabilities | ||
Convertible notes payable, net of discount of $0 and $390,021 | 15,924 | 43,312 |
Convertible notes payable, related parties, net of discount of $524,142 and $1,018,657 | 1,095,433 | 230,718 |
Notes payable, related parties | 0 | 72,750 |
Total Liabilities | 3,297,314 | 1,686,224 |
Commitments and contingencies | ||
Stockholder's equity | ||
Common stock, $0.0001 par value; 250,000,000 shares authorized; 20,350,003 shares issued and outstanding at November 30, 2016 and May 31, 2016 | 2,118 | 2,035 |
Preferred stock, $0.001 par value; 20,000,000 shares authorized; no shares issued | 0 | 0 |
Additional paid-in capital | 3,104,675 | 2,627,183 |
Stock payable | 65,700 | 65,700 |
Accumulated deficit | (6,246,786) | (4,125,886) |
Total stockholder's equity (deficit) | (3,074,293) | (1,430,968) |
Total liabilities and stockholders' equity (deficit) | $ 223,021 | $ 255,256 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Property, plant and equipment, accumulated depreciation | $ 1,561 | $ 892 |
Intangible assets, accumulated amortization | $ 720 | $ 396 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in Shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in Shares) | 21,178,176 | 20,350,003 |
Common stock, shares outstanding (in Shares) | 21,178,176 | 20,350,003 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in Shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in Shares) | 0 | 0 |
Convertible Debt [Member] | Non-Related Party Debt [Member] | ||
Convertible notes payable, discount | $ 419,584 | $ 227,475 |
Convertible notes payable, discount | 9,078 | 390,021 |
Convertible Debt [Member] | Related Party Notes [Member] | ||
Convertible notes payable, discount | 285,470 | 95,477 |
Convertible notes payable, discount | $ 338,191 | $ 1,018,657 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Cost of goods sold | 0 | 0 | 0 | 0 |
Gross margin | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 144,204 | 406,323 | 482,071 | 917,726 |
Professional fees | 99,867 | 343,818 | 603,098 | 767,420 |
Total operating expenses | 244,071 | 750,141 | 1,085,169 | 1,685,146 |
Operating loss | (244,071) | (750,141) | (1,085,169) | (1,685,146) |
Other (income) expense: | ||||
Interest expense | 381,149 | 106,599 | 1,395,511 | 177,464 |
Loss on modification of debt | 0 | 0 | 33,334 | 0 |
Change in fair value of derivative | (244,848) | 0 | (393,114) | 0 |
Total other expense | 136,301 | 106,599 | 1,035,731 | 177,464 |
Income (Loss) before income taxes | (380,372) | (856,740) | (2,120,900) | (1,862,610) |
Income tax expense | 0 | 0 | 0 | 0 |
Net income (loss) | $ (380,372) | $ (856,740) | $ (2,120,900) | $ (1,862,610) |
Net income (loss) per share - basic (in Dollars per share) | $ (0.02) | $ (0.04) | $ (0.10) | $ (0.09) |
Net income (loss) per share - diluted (in Dollars per share) | $ (0.02) | $ (0.04) | $ (0.10) | $ (0.09) |
Weighted average shares outstanding - basic (in Shares) | 20,465,360 | 20,182,640 | 20,388,033 | 20,081,901 |
Weighted average shares outstanding - diluted (in Shares) | 20,465,360 | 20,182,640 | 20,388,033 | 20,081,901 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (2,120,900) | $ (1,862,610) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Imputed interest | 804 | 807 |
Change in fair value of derivative | (393,114) | 0 |
Loss on modification of debt | 33,334 | 0 |
Issuance of stock for services | 0 | 115,050 |
Stock-based compensation | 0 | 327,500 |
Amortization of debt discounts | 1,197,998 | 114,489 |
Depreciation and amortization expense | 993 | 957 |
Changes in assets and liabilities: | ||
Prepaid expenses | (16,049) | 17,638 |
Accounts payable and accrued expenses | 137,699 | 198,464 |
Deferred liabilities | 0 | 47,888 |
Accrued compensation, related party | 112,500 | 106,250 |
Due to related parties | 0 | (525) |
Accrued interest, related party | 131,042 | 39,647 |
Accrued interest | 16,402 | 22,521 |
Net cash used in operating activities | (899,291) | (871,924) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Payments to acquire equipment | 0 | (2,674) |
Payment for construction in progress | (35,013) | (41,803) |
Net cash used in investing activities | (35,013) | (44,477) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from related party convertible notes payable | 150,000 | 345,000 |
Proceeds from related party notes payable | 838,000 | 392,750 |
Repayments of related party notes payable | (61,000) | 0 |
Repayments of convertible notes payable | (75,000) | 0 |
Net cash provided by financing activities | 852,000 | 737,750 |
Net increase in cash and cash equivalents | (82,304) | (178,651) |
Cash and cash equivalents at beginning of period | 88,244 | 208,821 |
Cash and cash equivalents at end of period | 5,940 | 30,170 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | 49,265 | 0 |
Income taxes paid | 0 | 0 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Convertible note issued for unpaid accrued salary | 250,000 | 0 |
Related party notes payable reclassified as related party convertible notes payable | 222,750 | 0 |
Discount on convertible notes payable due to derivatives | 518,720 | 945,000 |
Extinguishment of debt – related party | 254,114 | 0 |
Common stock issued for conversion of notes payable | 222,657 | 0 |
Transfer principle from related party notes payable to related party convertible notes payable | $ 0 | $ 945,000 |
Note 1 - Nature of Business and
Note 1 - Nature of Business and Significant Accounting Policies | 9 Months Ended |
Feb. 28, 2017 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | Note 1 – Nature of Business and Significant Accounting Policies Nature of Business CLS Holdings USA, Inc. (the “Company”) was originally incorporated as Adelt Design, Inc. (“Adelt”) on March 31, 2011 to manufacture and market carpet binding art. Production and marketing of carpet binding art never commenced. On November 12, 2014, CLS Labs, Inc. (“CLS Labs”) acquired 10,000,000 shares, or 55.6%, of the outstanding shares of common stock of Adelt from its founder, Larry Adelt. On that date, Jeffrey Binder, the Chairman, President and Chief Executive Officer of CLS Labs, was appointed Chairman, President and Chief Executive Officer of the Company. On November 20, 2014, Adelt adopted amended and restated articles of incorporation, thereby changing its name to CLS Holdings USA, Inc. Effective December 10, 2014, the Company effected a reverse stock split of its issued and outstanding common stock at a ratio of 1-for-0.625 (the “Reverse Split”), wherein 0.625 shares of the Company’s common stock were issued in exchange for each share of common stock issued and outstanding. As a result, 6,250,000 shares of the Company’s common stock were issued to CLS Labs in exchange for the 10,000,000 shares that it owned by virtue of the above-referenced purchase from Larry Adelt. On April 29, 2015, the Company, CLS Labs and CLS Merger Inc., a Nevada corporation and wholly owned subsidiary of CLS Holdings, entered into an Agreement and Plan of Merger (the “Merger Agreement”) and completed a merger, whereby CLS Merger Inc. merged with and into CLS Labs, with CLS Labs remaining as the surviving entity (the “Merger”). Upon the consummation of the Merger, the shares of the common stock of CLS Holdings owned by CLS Labs were extinguished and the former stockholders of CLS Labs were issued an aggregate of 15,000,000 (post Reverse Split) shares of common stock in CLS Holdings in exchange for their shares of common stock in CLS Labs. As a result of the Merger, the Company acquired the business of CLS Labs and abandoned its previous business. The Company has a patent pending proprietary method of extracting cannabinoids from cannabis plants and converting the resulting cannabinoid extracts into concentrates such as oils, waxes, edibles and shatter. These concentrates may be ingested in a number of ways, including through vaporization via electronic cigarettes (“e-cigarettes”), and used for a variety of pharmaceutical and other purposes. Internal testing of this extraction method and conversion process has revealed that it produces a cleaner, higher quality product and a significantly higher yield than the cannabinoid extraction processes currently existing in the marketplace. The Company has not commercialized its patent pending proprietary process or otherwise earned any revenues. The Company plans to generate revenues through licensing, fee-for-service and joint venture arrangements related to its patent pending proprietary method of extracting cannabinoids from cannabis plants and converting the resulting cannabinoid extracts into saleable concentrates. The Company has adopted a fiscal year end of May 31st. Basis of Presentation These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in US dollars. Principals of Consolidation The accompanying consolidated financial statements include the accounts of CLS Holdings USA, Inc., and its wholly owned operating subsidiaries, CLS Labs, Inc. and CLS Labs Colorado, Inc. All material intercompany transactions have been eliminated upon consolidation of these entities. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company had cash and cash equivalents of $5,940 and $88,244 as of February 28, 2017 and May 31, 2016, respectively. Property, Plant and Equipment Property and equipment is recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over the estimated useful lives. Computer equipment is being depreciated over a three-year period. Concentrations of Credit Risk The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred. The Company incurred no advertising and marketing costs for the nine months ended February 28, 2017 and February 29, 2016. Research and Development Research and development expenses are charged to operations as incurred. The Company incurred no research and development costs for the nine months ended February 28, 2017 and February 29, 2016, respectively. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the establishment of deferred tax assets and liabilities for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to the extent deferred tax assets may not be recoverable after consideration of the future reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income. Fair Value of Financial Instruments Pursuant to Accounting Standards Codification (“ASC”) No. 825 - Financial Instruments, the Company is required to estimate the fair value of all financial instruments included on its balance sheets. The carrying amount of the Company’s cash and cash equivalents, note receivable, notes payable, accounts payable and accrued expenses, none of which is held for trading, approximates their estimated fair values due to the short-term maturities of those financial instruments. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Level 3 - Significant unobservable inputs that cannot be corroborated by market data. Derivative Financial Instruments Derivatives are recorded on the condensed consolidated balance sheet at fair value. The conversion features of the convertible notes are embedded derivatives and are separately valued and accounted for on the consolidated balance sheet with changes in fair value recognized during the period of change as a separate component of other income/expense. Fair values for exchange-traded securities and derivatives are based on quoted market prices. The pricing model the Company used for determining the fair value of its derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see note 11). Revenue Recognition For revenue from product sales, the Company recognizes revenue using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. The Company has not generated revenue to date. Basic and Diluted Loss Per Share Basic net earnings per share is based on the weighted average number of shares outstanding during the period, while fully-diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options and warrants to purchase common stock, and convertible debt. Basic and diluted net loss per share is computed based on the weighted average number of shares of common stock outstanding during the period. The Company uses the treasury stock method to calculate the impact of outstanding stock options and warrants. Stock options and warrants for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on earnings per common share and, accordingly, are excluded from the calculation. A net loss causes all outstanding stock options and warrants to be antidilutive. As a result, the basic and dilutive losses per common share are the same for the three and nine months ended February 28, 2017 and February 29, 2016. Commitments and Contingencies Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims brought to such legal counsel’s attention as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Recent Accounting Pronouncements Accounting standards promulgated by the Financial Accounting Standards Board (“FASB”) are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The update requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases. The update also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. Accounting by lessors will remain largely unchanged. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. The Company is currently evaluating the potential impact of the update on its financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), to reduce the complexity of certain aspects of the accounting for employee share-based payment transactions. ASU 2016-09 involves changes in several aspects of the accounting for share-based payment transactions, including the accounting for the income tax consequences of share-based awards. For public companies, ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted. The Company is currently evaluating the potential impact of the update on its financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements. |
Note 2 - Going Concern
Note 2 - Going Concern | 9 Months Ended |
Feb. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Substantial Doubt about Going Concern [Text Block] | Note 2 – Going Concern As shown in the accompanying financial statements, the Company has incurred net losses from operations resulting in an accumulated deficit of $6,246,786 as of February 28, 2017. Further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with loans, the proceeds from the sale of securities, and/or revenues from operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
Note 3 - Prepaid Expenses
Note 3 - Prepaid Expenses | 9 Months Ended |
Feb. 28, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
Other Assets Disclosure [Text Block] | Note 3 – Prepaid Expenses Prepaid expenses consisted of the following at February 28, 2017 and May 31, 2016: February 28, May 31, 2017 2016 Prepaid rent $ 16,381 $ - Prepaid legal fees 6,410 6,742 Total $ 22,791 $ 6,742 |
Note 4 - Construction in Progre
Note 4 - Construction in Progress | 9 Months Ended |
Feb. 28, 2017 | |
Construction in Progress [Abstract] | |
Construction in Progress [Text Block] | Note 4 – Construction in Progress The Company has construction in progress, in the amount of $141,739 and $106,726 at February 28, 2017 and May 31, 2016 on improvements to its leased facility in Colorado. As of February 28, 2017, the Company had yet to start amortizing these improvements. |
Note 5 - Security Deposit
Note 5 - Security Deposit | 9 Months Ended |
Feb. 28, 2017 | |
Security Deposits [Abstract] | |
Security Deposits [Text Block] | Note 5 – Security Deposit The Company had a security deposit in the amount of $50,000 at February 28, 2017 and May 31, 2016. This amount consisted of a deposit to secure office and warehouse space. |
Note 6 - Property, Plant and Eq
Note 6 - Property, Plant and Equipment | 9 Months Ended |
Feb. 28, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | Note 6 – Property, Plant and Equipment Property, plant and equipment consisted of the following at February 28, 2017 and May 31, 2016. February 28, May 31, 2017 2016 Computer equipment $ 2,674 $ 2,674 Property and equipment, gross 2,674 2,674 Less: accumulated depreciation (1,561 ) (892 ) Property and equipment, net $ 1,113 $ 1,782 Depreciation expense totaled $223 and $669 for the three and nine months ended February 28, 2017 and February 29, 2016, respectively. |
Note 7 - Intangible Assets
Note 7 - Intangible Assets | 9 Months Ended |
Feb. 28, 2017 | |
Disclosure Text Block [Abstract] | |
Intangible Assets Disclosure [Text Block] | Note 7 – Intangible Assets Intangible assets consisted of the following at February 28, 2017 and May 31, 2016. February 28, May 31, 2017 2016 Domain name $ 2,158 $ 2,158 2,158 2,158 Less: accumulated amortization (720 ) (396 ) Intangible assets, net $ 1,438 $ 1,762 Total amortization expense charged to operations for the three and nine months ended February 28, 2017 was $108 and $324, respectively, and $108 and $288 for the three and nine months ended February 29, 2016, respectively. The domain name is being amortized over a period of 60 months. |
Note 8 - Accounts Payable and A
Note 8 - Accounts Payable and Accrued Liabilities | 9 Months Ended |
Feb. 28, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | Note 8 – Accounts Payable and Accrued Liabilities The Company had accounts payable and accrued liabilities of $569,959 and $431,017 at February 28, 2017 and May 31, 2016, respectively, which consist of legal fees, deferred rent liability and other trade payables. |
Note 9 - Related Party Transact
Note 9 - Related Party Transactions | 9 Months Ended |
Feb. 28, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 9 – Related Party Transactions As of February 28, 2017 and May 31, 2016, the Company owed the amount of $112,500 and $250,000, respectively, to Jeffrey Binder, its President and Chief Executive Officer, for accrued salary. For the nine months ended February 28, 2017, unpaid accrued salary in the amount of $250,000 was transferred to a convertible promissory note due to Mr. Binder (see note 11). As of February 28, 2017 and May 31, 2016, the Company had accrued salary due to Michael Abrams, a former officer of the Company prior to his September 1, 2015 termination, in the amount of $16,250. As of February 28, 2017 and May 31, 2016, the Company had related party payables in the amount of $17,930 due to officers and directors related to expenses paid on behalf of the Company. The Company imputed interest at the rate of 6% per annum on these liabilities, and recorded imputed interest expense on these liabilities in the amounts of $804 and $807 during the nine months ended February 28, 2017 and February 29, 2016, respectively. These interest accruals were charged to additional paid-in capital. On April 17, 2015, prior to Alan Bonsett’s appointment as Chief Operating Officer, the Company, through CLS Labs Colorado, entered into an arrangement with PRH (the “Colorado Arrangement”) to, among other things, (i) license its proprietary technology, methods and processes to PRH in Colorado in exchange for a fee; (ii) sub-lease warehouse and office space in Denver, Colorado to PRH whereby PRH can grow, extract and process cannabis and other plant products in exchange for lease payments totaling an aggregate of $1,067,067 over a seventy-two (72) month term; (iii) build a processing facility and lease such facility, including equipment, to PRH in exchange for a monthly fee; and (iv) loan $500,000 to PRH to be used by PRH in connection with its financing of the building out, equipping, and development of a marijuana grow facility. Mr. Bonsett, as an owner of PRH, will indirectly receive the benefits of the Colorado Arrangement. PRH entered into an arrangement with a third-party grower to grow marijuana at a location that is contiguous to PRH’s leased real property. The grower obtained zoning approval, a certificate of occupancy to begin planting cannabis and operating the grow facility, and a Colorado Retail Marijuana Cultivation Facility License before commencing planting in December 2015, and the grow facility is now fully operational. Additionally, upon Mr. Bonsett’s employment on August 1, 2015 to serve as the Company’s Chief Operating Officer, he received a one-time signing bonus of 250,000 (post Reverse-Split) shares of restricted common stock of the Company, with a fair value of $327,500, which became fully vested one year from the effective date of the agreement. Related Party Notes Payable The Company has convertible notes payable and notes payable outstanding to Jeffrey Binder, an officer and director, to Frank Koretsky, a director; and to Newcan Investment Partners LLC, an entity affiliated with Frank Koretsky. See note 11. During the nine months ended February 28, 2017, the Company issued a $150,000 convertible note payable to CLS CO 2016, LLC an entity affiliated with Frank Koretsky, a director of the Company. See note 11. During the nine months ended February 28, 2017 the Company incurred $580,000 in notes payable to Newcan Investment Partners LLC, an entity affiliated with Frank Koretsky, a director of the Company. See note 11. During the three months ended February 28, 2017, $460,000 in notes payable was converted to a convertible promissory note. |
Note 10 - Notes Payable
Note 10 - Notes Payable | 9 Months Ended |
Feb. 28, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 10 – Notes Payable February 28, May 31, 2017 2016 Notes payable to Jeffrey Binder, an officer and director of the Company, for advances to fund operations (the “Binder Funding Notes”). The Binder Funding Notes bear interest at a rate of 6% for loans made through November 30, 2017, and at a rate of 10% for loans made after November 30, 2016. The Binder Funding Notes have no maturity date and are due on demand. During the nine months ended February 28, 2017, Mr. Binder advanced a total of $118,000 to the Company, and the Company repaid Mr. Binder $61,000 under the Binder Funding Note; $12,750 of this amount was transferred out of the Binder Funding Notes and used to fund a new convertible note payable to Mr. Binder (See “Binder Convertible Note 3” below). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $166 and $237, respectively, on the Binder Funding Notes. $ 47,000 $ 2,750 Notes payable to Newcan Investment Partners, LLC (“Newcan”), an entity owned by Frank Koretsky, a director of the Company, for advances to fund operations (the “Koretsky Funding Notes”). The Koretsky Funding Notes bear interest at a rate of 6% for loans made through November 30, 2017, and at a rate of 10% for loans made after November 30, 2016. The Koretsky Funding Notes have no maturity date and are due on demand. During the nine months ended February 28, 2017, Frank Koretsky advanced $140,000 and Newcan Investment Partners, LLC advanced $580,000 to the Company under the Koretsky Funding Notes; during the nine months ended February 28, 2017, $210,000 was transferred out of the Koretsky Funding Notes and used to fund a new convertible note payable to Mr. Koretsky (see “Koretsky Convertible Note 3” below) and $460,000 was transferred out of the Koretsky Funding Notes and used to fund new convertible notes payable to Newcan (see “Newcan Convertible Notes 1 and 2” below). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $1,102 and $7,890, respectively, on the Koretsky Funding Notes. 120,000 70,000 Total – Notes Payable, Related Parties $ 167,000 $ 72,750 Current portion $ 167,000 $ - Long term portion $ - $ 72,750 February 28, May 31, 2017 2016 Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated January 12, 2016 and due January 1, 2019 (the “Binder Convertible Note 1”). The Binder Convertible Note 1 was funded with $50,000 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 6% per annum. No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $6,250 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a three-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). The Company recognized a discount of $50,000 on the value of the beneficial conversion feature at the time of issuance of this note. During the nine months ended February 28, 2017, $18,561 of this discount was charged to operations. During the three and nine months ended February 28, 2017 the Company accrued interest in the amount of $740 and $2,244, respectively, on this note. 50,000 50,000 Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated April 8, 2016 and due April 1, 2019 (the “Binder Convertible Note 2”). The Binder Convertible Note 2 was funded with $42,500 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 6% per annum through February 29, 2016 and 10% per annum thereafter. No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $5,313 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). The Company recognized a discount of $37,840 on the value of the beneficial conversion feature at the time of issuance of this note. During the nine months ended February 28, 2017, $14,048 of this discount was charged to operations. During the three and nine months ended February 28, 2016, the Company accrued interest in the amount of $1,048 and $3,179, respectively, on this note. 42,500 42,500 Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated July 20, 2016 and due July 1, 2019 (the “Binder Convertible Note 3”). The Binder Convertible Note 3 was funded with the conversion of $250,000 of unpaid accrued salary due to Mr. Binder and $12,750 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 10% per annum. No payments are required until July 1, 2017, at which time all accrued interest becomes due and payable. Commencing on October 1, 2017, the first of eight principal payments in the amount of $32,844 will become due; subsequent principal payments will become due on the first day of each, January, April, July and October until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $6,479 and $16,120, respectively, on this note. 262,750 - Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated January 12, 2016 and due January 1, 2019 (the “Koretsky Convertible Note 1”). The Koretsky Convertible Note 1 was funded with $895,000 of advances Mr. Koretsky made to the Company under the Koretsky Funding Notes. This note bears interest at the rate of 6% per annum. No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $111,875 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). The Company recognized a discount of $895,000 on the value of the beneficial conversion feature at the time of issuance of this note. During the three and nine months ended February 28, 2017, $110,745 and $332,234, respectively, of this discount was charged to operations. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $13,241 and $40,164, respectively, on this note. 895,000 895,000 February 28, May 31, 2017 2016 Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated April 11, 2016 and due April 1, 2019 (the “Koretsky Convertible Note 2”). The Koretsky Convertible Note 2 was funded with $380,000 of advances Mr. Koretsky made to the Company under the Koretsky Funding Notes. This note bears interest at the rate of 6% per annum through February 29, 2016 and 10% per annum thereafter. No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $47,500 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). The Company recognized a discount of $338,336 on the value of the beneficial conversion feature at the time of issuance of this note. During the three and nine months ended February 28, 2017, $41,867 and $125,602, respectively, of this discount was charged to operations. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $9,370 and $28,422, respectively, on this note. 380,000 380,000 Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated July 20, 2016 and due July 1, 2019 (the “Koretsky Convertible Note 3”). The Koretsky Convertible Note 3 was funded with $210,000 of advances Mr. Koretsky made to the Company under the Koretsky Funding Notes. This note bears interest at the rate of 10% per annum. No payments are required until July 1, 2017, at which time all accrued interest becomes due and payable. Commencing on October 1, 2017, the first of eight principal payments in the amount of $32,844 will become due; subsequent principal payments will become due on the first day of each, January, April, July and October until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $5,178 and $13,728, respectively, on this note. 210,000 - Unsecured convertible note issued to CLS CO 2016, LLC an entity affiliated with Frank Koretsky, a director of the Company, dated August 3, 2016 and due August 1, 2018 (the “CLS CO 2016 Note”). This note has a face amount of $150,000 and bears interest at the rate of 15% per annum. All interest accruing on this Note through the first anniversary of this Note shall be added to principal. Commencing on November 1, 2017, the Company shall pay the outstanding principal balance in four (4) equal quarterly installments, together with accrued interest, in arrears, until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $5,548 and $12,884, respectively, on this note. 150,000 - February 28, May 31, 2017 2016 Unsecured convertible note issued to Newcan dated January 10, 410,000 - Unsecured convertible note issued to Newcan Investment Partners LLC an entity affiliated with Frank Koretsky, a director of the Company, dated January 10, 50,000 - Total – Convertible Notes Payable, Related Parties $ 2,450,250 1,367,500 Less: Discount (623,661 ) (1,114,104 ) Convertible Notes Payable, Related Parties, Net of Discounts $ 1,826,589 253,396 Convertible Notes Payable, Related Parties, Net of Discounts, Current Portion $ 731,156 $ 22,678 Convertible Notes Payable, Related Parties, Net of Discounts, Long-term Portion 1,095,433 230,718 February 28, May 31, 2017 2016 Convertible promissory note issued to an unaffiliated third party due April 29, 2018 (the “April 2015 Note”). During the twelve months ended May 31, 2015, the lender loaned the Company the amount of $200,000 pursuant to this note. The April 2015 Note bears interest at a rate of 15% per annum. On the first anniversary of this note, the all then accrued interest became due. Thereafter, the Company is required to make eight equal payments of principal together with accrued interest, quarterly in arrears, commencing on July 1, 2016 until paid in full. The note and any accrued unpaid interest is convertible into common stock of the Company. For each dollar converted, the note holder shall receive two shares of common stock and one three-year warrant to purchase 1.33 shares (post Reverse-Split) of common stock at $0.75 per share (post Reverse-Split). The Company recognized a discount of $200,000 on the April 2015 Note related to the value of the beneficial conversion feature at the time of issuance. During the nine months ended February 28, 2017, $82,390 of this discount was charged to operations. During the three months ended February 27, 2017, the Company repaid principal in the amount of $25,000 and interest in the amount of $6,690 on this note; during the nine months ended February 28, 2017, the Company repaid principal in the amount of $75,000 and interest in the amount of $49,265 on this note. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $4,952 and $18,740, respectively, on this note. 125,000 200,000 Convertible Promissory Notes payable to Old Main Capital, LLC (“Old Main”) dated March 18, 2016, April 22, 2016 and May 27, 2016 On October 6, 2016, the 10% Notes were amended to increase the interest rate to 15% (effective August 1, 2016) and subsequently amended November 28, 2016 to convert the 10% Notes from installment notes to “balloon” notes, with all principal and accrued interest due on September 18, 2017. In exchange for amending the terms of the 10% Notes, the Company increased the outstanding principal balance by 10% to $366,666. In addition the Fixed Conversion Price was changed to a variable conversion price equal to the lesser of the prior Fixed Conversion Price or 75% of the lowest VWAP in the fifteen trading days ending on the trading day immediately prior to the conversion date. This November 28, 2016 amendment required an extinguishment analysis of the 10% Notes resulting in the gain on extinguishment of debt in the amount of $172,618 during the nine months ended February 28, 2017. The gain on extinguishment of debt was included in additional paid in capital during the nine months ended February 28, 2017. The 10% Notes were revalued as of the November 28, 2016 amendment and the Company recognized a discount of $366,666 on the value of the embedded derivative. During the three months ended February 28, 2017 Old Main converted an aggregate of $100,000 of principal, in six transactions, into 828,173 shares of common stock. . At February 28, 2017 and May 31, 2016, the amount of discount remaining on these notes was $264,276 and $326,132, respectively. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $12,649 and $34,959, respectively, on these notes. 266,666 333,332 February 28, May 31, 2017 2016 Convertible promissory note payable to Old Main dated March 18, 2016 and amended on October 6, 2016 and November 28, 2016, and bearing interest at a rate of 8% (the “8% Note”). The 8% Note was issued for Old Main’s commitment to enter into an equity line transaction with the Company and prepare all of the related transaction documents. Originally, Old Main could, at its option, convert all or a portion of the note and accrued but unpaid interest into shares of common stock at a conversion price of $1.07 per share (post Reverse-Split) (the “8% Fixed Conversion Price”). The 8% Fixed Conversion Price is subject to adjustment if, at any time while this note is outstanding, the Company should issue any equity security with an effective price per share that is lower than the 8% Fixed Conversion Price (the “8% Base Conversion Price”), other than certain exempt issuances. In such an instance, the 8% Fixed Conversion Price will be lowered to match the 8% Base Conversion Price. Originally, at the earlier of February 3, 2017 or the effectiveness of the registration statement related to the Company’s equity line, the Company must begin to redeem 1/6th of the face amount of the note and any accrued but unpaid interest on a monthly basis. Such amortization payment could be made, at its option, in cash or, subject to certain conditions, in common stock pursuant to a conversion rate equal to the lower of (a) $1.07 (post Reverse-Split) or (b) 75% of the lowest daily volume weighted average price of the common stock in the twenty consecutive trading days ending on the trading day that is immediately prior to the applicable conversion date. The Company recognized a discount of $172,108 on the value of the embedded derivative at the time of issuance. On November 28, 2016, the 8% Note was amended converting the note from an installment note to a “balloon” note, with all principal and accrued interest due on March 18, 2017. In addition the Fixed Conversion Price was changed to a variable conversion price equal to the lesser of the prior Fixed Conversion Price or 75% of the lowest VWAP in the fifteen trading days ending on the trading day immediately prior to the conversion date. The November 28, 2016 amendment required an extinguishment analysis of the 8% Note resulting in gain on extinguishment of debt in the amount of $81,496 for the nine months ended February 28, 2017. The gain on extinguishment of debt was included in additional paid-in capital at February 28, 2017. The 8% Note was revalued as of the November 28, 2016 amendment and the Company recognized a discount of $169,476 on the value of the embedded derivative. At February 28, 2017 and May 31, 2016, the amount of discount remaining on these notes was $118,998 and $163,586, respectively. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $3,945 and $11,967, respectively, on this note. 200,000 200,000 Total - Convertible Notes Payable $ 591,666 $ 733,332 Less: Discount (428,660 ) (587,910 ) Convertible Notes Payable, Net of Discounts $ 163,006 $ 145,422 Total - Convertible Notes Payable, Net of Discounts, Current Portion $ 147,082 $ 72,525 Total - Convertible Notes Payable, Net of Discounts, Long-term Portion $ 15,924 $ 43,312 Discounts on notes payable amortized to interest expense: $ 1,197,998 $ 286,317 Beneficial Conversion Features The 10% Notes and the 8% Note (collectively, the “2016 Convertible Notes”) contain conversion features that create derivative liabilities. The pricing model the Company used for determining fair value of its derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income. The derivative component of the 2016 Convertible Notes was valued at November 28, 2016, the date of the second amendment to the 2016 Convertible Notes, and at period end. The following assumptions and key inputs were used for the valuation of the derivative liability related to the 2016 Convertible Notes at November 28, 2016 and February 28, 2017: Assumption Expected dividends: 0 % Expected volatility: 93-168.3 % Expected term (years): 0.55-0.80 years Risk free interest rate: 0.60-0.62 Stock price $ 0.17-0.59 |
Note 11 - Stockholders' Equity
Note 11 - Stockholders' Equity | 9 Months Ended |
Feb. 28, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
Shareholders' Equity and Share-based Payments [Text Block] | Note 11 – Stockholders’ Equity The Company’s authorized capital stock consists of 250,000,000 shares of common stock, par value $0.0001 per share and 20,000,000 shares of preferred stock, par value $0.001 per share. The Company had 21,178,176 and 20,350,003 shares (post Reverse Split) of common stock issued and outstanding as of February 28, 2017 and May 31, 2016, respectively. On December 10, 2014, the Company effected a reverse stock split of the Company’s issued and outstanding common stock at a ratio of 1-for-0.625, wherein 0.625 shares of common stock were issued in exchange for each share of the Company’s common stock owned by the Company’s stockholders on December 1, 2014, the record date for the reverse stock split. As a result of the reverse stock split, 11,250,000 shares (post Reverse-Split) of common stock were outstanding as of December 10, 2014. The reverse stock split did not affect the number of authorized shares of the Company’s common stock. All share and per share information contained in the financial statements has been retroactively adjusted to reflect the reverse stock split. The Company recorded imputed interest of $804 and $807 during the nine months ended February 28, 2017 and February 29, 2016 on related party payables due to a director and officer of the Company. On November 28, 2016 the Company amended the 2016 Convertible Notes which was accounted for as the extinguishment and reissuance of the debt. As a result, the Company recorded a gain on the extinguishment of debt in the amount of $254,114, which was included in additional paid-in capital at February 28, 2017. During the three months ended February 28, 2017, Old Main, holder of convertible promissory notes, converted an aggregate of $100,000 of principal, in six transactions, into 828,173 shares of common stock. As a result of the conversions, the Company charged the amount $222,574 to additional paid-in capital. (see Note 11). On August 1, 2015, the Company and Alan Bonsett entered into a five-year employment agreement. Pursuant to the agreement, Mr. Bonsett commenced serving as the Company’s Chief Operating Officer on August 15, 2015. Mr. Bonsett received a one-time signing bonus of 250,000 (post Reverse Split) shares of restricted common stock of the Company, which became fully vested one year from the effective date of the agreement. The Company valued the shares at $327,500 based on the stock price at August 3, 2015 and is amortizing them over the term of the employment agreement. During the nine months ended February 29, 2016 , Stock Issued for Services On August 28, 2015, the Company issued 60,000 shares of common stock, valued at $45,000, to a consultant for services. Of these shares, 50,000, valued at $37,500, were included in stock payable as of May 31, 2015. The shares were valued based on the closing market price of the common stock on the grant date. On July 22, 2015, pursuant to a consulting agreement, the Company agreed to issue 5,000 shares of common stock, valued at $5,750, to a consulting firm in exchange for investor relations consulting services. On August 17, 2015, the consulting agreement was amended, whereby the Company agreed to issue 5,000 additional shares of common stock, valued at $6,650. On August 26, 2015, the Company extended the consulting agreement and agreed to issue the consultant an additional 10,000 shares of common stock, valued at $12,700. On October 9, 2015, the Company extended the consulting agreement and agreed to issue the consultant an additional 10,000 shares of common stock, valued at $11,700. On December 15, 2015, the Company extended the consulting agreement and agreed to issue the consultant an additional 10,000 shares of common stock, valued at $8,000. All shares were valued based on the closing market price of the common stock on the grant date. During the year ended May 31, 2016, the Company issued 40,000 shares to this consultant, valued at $32,750. As of February 28, 2017, the Company had 70,000 shares of common stock payable valued at $65,700 due to two third party consultants included in stock payable on the accompanying balance sheets. The parties are in discussions regarding whether any shares of the Company’s common stock have been earned and it is uncertain whether any shares will be issued. |
Note 12 - Fair Value of Financi
Note 12 - Fair Value of Financial Instruments | 9 Months Ended |
Feb. 28, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Note 12 – Fair Value of Financial Instruments In March 2016, the Company entered into convertible note agreements containing beneficial conversion features with Old Main. One of the features is a ratchet reset provision which, in general, reduces the conversion price should the Company issue equity with an effective price per share that is lower than the stated conversion price in the note agreement (see note 11). The Company accounts for the fair value of the conversion feature in accordance with ASC 815- Accounting for Derivatives and Hedging and Emerging Issues Task Force (“EITF”) 07-05- Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock (“EITF 07-05”). The Company carries the embedded derivative on its balance sheet at fair value and accounts for any unrealized change in fair value as a component of its results of operations. The following summarizes the Company’s derivative financial liabilities that are recorded at fair value on a recurring basis at February 28, 2017 and May 31, 2016. February 28, 2017 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 167,372 $ 167,372 May 31, 2016 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 418,537 $ 418,537 The estimated fair values of the Company’s derivative liabilities are as follows: Derivative Liability Liabilities Measured at Fair Value Balance as of May 31, 2016 $ 418,537 Issuances 518,720 Conversions/Redemptions (122,657 ) Extinguishment of debt – related party (254,114 ) Revaluation gain (393,114 ) Balance as of February 28, 2017 $ 167,372 During the three months ended February 28, 2017, Old Main, holder of the 2016 Convertible Notes, converted an aggregate of $100,000 of principal, in six transactions, into 828,173 shares of common stock. As a result the Company charged $122,657 of derivative liability to additional paid-in capital (see Note 10). |
Note 13 - Commitment and Contin
Note 13 - Commitment and Contingencies | 9 Months Ended |
Feb. 28, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 13 – Commitment and Contingencies The Company, through CLS Labs Colorado, leases 42,392 square feet of warehouse and office space (the “Leased Space”) in a building located on 1.92 acres in Denver Colorado. CLS Labs Colorado subleases the Leased Space to Picture Rock Holdings, LLC as part of an arrangement whereby Picture Rock Holdings, LLC and its affiliate will conduct certain intended activities, including growing, extraction, conversion, assembly and packaging of cannabis and other plant materials, as permitted by and in compliance with state, city and local laws, rules, ordinances and regulations. Total expense for the lease was $139,827 and $163,024 for the nine months ended February 28, 2017 and February 29, 2016. Employment Agreements CLS Labs and Jeffrey Binder entered into a five-year employment agreement effective October 1, 2014. Under the agreement, Mr. Binder serves as CLS Labs’ Chairman, President and Chief Executive Officer and is entitled to receive an annual salary of $150,000. Under the agreement, Mr. Binder is also entitled to receive a performance bonus equal to 2% of CLS Labs’ annual EBITDA, up to a maximum annual cash compensation of $1 million (including his base salary), and annual stock options, exercisable at the fair market value of CLS Labs’ common stock on the date of grant, in an amount equal to 2% of its annual EBITDA up to $42.5 million and 4% of its annual EBITDA in excess of $42.5 million. On April 28, 2015, CLS Labs and the Company entered into an addendum to Mr. Binder’s employment agreement whereby Mr. Binder agreed that following the merger of CLS Labs and a subsidiary of the Company, in addition to his obligations to CLS Labs, he would serve the Company and its subsidiaries in such roles as the Company may request. In exchange, the Company agreed to assume the obligations of CLS Labs to grant Mr. Binder annual stock options, as referenced above. Mr. Binder continues to receive an annual salary of $150,000 from CLS Labs for serving as its Chairman, President and Chief Executive Officer. My Binder has deferred all of the salary payable to him under his employment agreement through February 28, 2017. On July 20, 2016 and March 31, 2017, the Company issued Mr. Binder convertible notes in exchange for $250,000 and $112,500, respectively, in deferred salary, among other amounts owed to Mr. Binder by the Company. As of February 28, 2017 and May 31, 2016, the Company had accrued compensation due to Mr. Binder in the amount of $112,500 and $250,000. Effective August 1, 2015, the Company and Alan Bonsett entered into a five-year employment agreement. Pursuant to the agreement, Mr. Bonsett commenced serving as the Company’s Chief Operating Officer on August 15, 2015. Under the agreement, Mr. Bonsett is entitled to receive an annual salary of $150,000. Further, he is entitled to receive a performance bonus equal to 2% of the Company’s annual EBITDA, up to a maximum annual cash compensation of $1 million (including his base salary), and annual stock options, exercisable at the fair market value of the Company’s common stock on the date of grant, in an amount equal to 2% of its annual EBITDA up to $42.5 million and 4% of its annual EBITDA in excess of $42.5 million. Additionally, Mr. Bonsett received a one-time signing bonus of 250,000 (post Reverse-Split) shares of restricted common stock of the Company, valued at $327,500, which became fully vested one year from the effective date of the agreement. Mr. Bonsett, as an owner of PRH, will indirectly receive the benefits of the Colorado Arrangement, as discussed in Note 10. The business to be operated by PRH pursuant to the Colorado Arrangement has not yet produced revenues. At February 28, 2017 and May 31, 2016, the Company had accrued salary due to Michael Abrams, a former officer of the Company, prior to his September 1, 2015 termination, in the amount of $16,250 in accrued compensation on the accompanying consolidated balance sheets. |
Note 14 - Subsequent Events
Note 14 - Subsequent Events | 9 Months Ended |
Feb. 28, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 14 – Subsequent Events During March 2017, Old Main, holder of convertible promissory notes, converted an aggregate of $37,500 of principal, in two transactions, into 857,808 shares of common stock. On March 27, 2017, the Company entered into Amendment #3 to the Convertible Promissory Notes issued on March 18, April 22 and May 27, 2016 (the "Third Amendment") to further amend the 2016 Convertible Notes in certain respects. In the Third Amendment, the Company agreed to (i) prepay all amounts due under the 10% Notes on or before April 1, 2017, which amount was agreed to be $372,669.95 (the "Settlement Amount"), and (ii) to increase the outstanding amount due under the 8% Note as of March 18, 2017 by 5%. In exchange for doing so, Old Main agreed to extend the maturity of the 8% Note until July 1, 2017 and to suspend conversions under the 8% Note until July 1, 2017. If we fail to pay the Settlement Amount on or before April 1, 2017, Old Main has the right to declare the Third Amendment null and void. On March 31, 2017 The holder of each Note may, at any time prior to payment or prepayment in full, convert all principal and accrued interest thereunder, in whole or in part, into securities of the Company. For each $0.25 converted, the holder will receive one share of the Company’s common stock and a five-year warrant to purchase one share of the Company’s common stock at a price of $0.25 per share. We evaluated subsequent events after the balance sheet date through the date the financial statements were issued. We did not identify any additional material events or transactions occurring during this subsequent event reporting period that required further recognition or disclosure in these financial statements. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Feb. 28, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in US dollars. |
Consolidation, Policy [Policy Text Block] | Principals of Consolidation The accompanying consolidated financial statements include the accounts of CLS Holdings USA, Inc., and its wholly owned operating subsidiaries, CLS Labs, Inc. and CLS Labs Colorado, Inc. All material intercompany transactions have been eliminated upon consolidation of these entities. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company had cash and cash equivalents of $5,940 and $88,244 as of February 28, 2017 and May 31, 2016, respectively. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Plant and Equipment Property and equipment is recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over the estimated useful lives. Computer equipment is being depreciated over a three-year period. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of Credit Risk The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. |
Advertising Costs, Policy [Policy Text Block] | Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred. The Company incurred no advertising and marketing costs for the nine months ended February 28, 2017 and February 29, 2016. |
Research, Development, and Computer Software, Policy [Policy Text Block] | Research and Development Research and development expenses are charged to operations as incurred. The Company incurred no research and development costs for the nine months ended February 28, 2017 and February 29, 2016, respectively. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the establishment of deferred tax assets and liabilities for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to the extent deferred tax assets may not be recoverable after consideration of the future reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments Pursuant to Accounting Standards Codification (“ASC”) No. 825 - Financial Instruments, the Company is required to estimate the fair value of all financial instruments included on its balance sheets. The carrying amount of the Company’s cash and cash equivalents, note receivable, notes payable, accounts payable and accrued expenses, none of which is held for trading, approximates their estimated fair values due to the short-term maturities of those financial instruments. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Level 3 - Significant unobservable inputs that cannot be corroborated by market data. |
Derivatives, Policy [Policy Text Block] | Derivative Financial Instruments Derivatives are recorded on the condensed consolidated balance sheet at fair value. The conversion features of the convertible notes are embedded derivatives and are separately valued and accounted for on the consolidated balance sheet with changes in fair value recognized during the period of change as a separate component of other income/expense. Fair values for exchange-traded securities and derivatives are based on quoted market prices. The pricing model the Company used for determining the fair value of its derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see note 11). |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition For revenue from product sales, the Company recognizes revenue using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. The Company has not generated revenue to date. |
Earnings Per Share, Policy [Policy Text Block] | Basic and Diluted Loss Per Share Basic net earnings per share is based on the weighted average number of shares outstanding during the period, while fully-diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options and warrants to purchase common stock, and convertible debt. Basic and diluted net loss per share is computed based on the weighted average number of shares of common stock outstanding during the period. The Company uses the treasury stock method to calculate the impact of outstanding stock options and warrants. Stock options and warrants for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on earnings per common share and, accordingly, are excluded from the calculation. A net loss causes all outstanding stock options and warrants to be antidilutive. As a result, the basic and dilutive losses per common share are the same for the three and nine months ended February 28, 2017 and February 29, 2016. |
Commitments and Contingencies, Policy [Policy Text Block] | Commitments and Contingencies Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims brought to such legal counsel’s attention as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Accounting standards promulgated by the Financial Accounting Standards Board (“FASB”) are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The update requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases. The update also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. Accounting by lessors will remain largely unchanged. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. The Company is currently evaluating the potential impact of the update on its financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), to reduce the complexity of certain aspects of the accounting for employee share-based payment transactions. ASU 2016-09 involves changes in several aspects of the accounting for share-based payment transactions, including the accounting for the income tax consequences of share-based awards. For public companies, ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted. The Company is currently evaluating the potential impact of the update on its financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements. |
Note 3 - Prepaid Expenses (Tabl
Note 3 - Prepaid Expenses (Tables) | 9 Months Ended |
Feb. 28, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Prepaid expenses consisted of the following at February 28, 2017 and May 31, 2016: February 28, May 31, 2017 2016 Prepaid rent $ 16,381 $ - Prepaid legal fees 6,410 6,742 Total $ 22,791 $ 6,742 |
Note 6 - Property, Plant and 22
Note 6 - Property, Plant and Equipment (Tables) | 9 Months Ended |
Feb. 28, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property, plant and equipment consisted of the following at February 28, 2017 and May 31, 2016. February 28, May 31, 2017 2016 Computer equipment $ 2,674 $ 2,674 Property and equipment, gross 2,674 2,674 Less: accumulated depreciation (1,561 ) (892 ) Property and equipment, net $ 1,113 $ 1,782 |
Note 7 - Intangible Assets (Tab
Note 7 - Intangible Assets (Tables) | 9 Months Ended |
Feb. 28, 2017 | |
Disclosure Text Block [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Intangible assets consisted of the following at February 28, 2017 and May 31, 2016. February 28, May 31, 2017 2016 Domain name $ 2,158 $ 2,158 2,158 2,158 Less: accumulated amortization (720 ) (396 ) Intangible assets, net $ 1,438 $ 1,762 |
Note 10 - Notes Payable (Tables
Note 10 - Notes Payable (Tables) | 9 Months Ended |
Feb. 28, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | February 28, May 31, 2017 2016 Notes payable to Jeffrey Binder, an officer and director of the Company, for advances to fund operations (the “Binder Funding Notes”). The Binder Funding Notes bear interest at a rate of 6% for loans made through November 30, 2017, and at a rate of 10% for loans made after November 30, 2016. The Binder Funding Notes have no maturity date and are due on demand. During the nine months ended February 28, 2017, Mr. Binder advanced a total of $118,000 to the Company, and the Company repaid Mr. Binder $61,000 under the Binder Funding Note; $12,750 of this amount was transferred out of the Binder Funding Notes and used to fund a new convertible note payable to Mr. Binder (See “Binder Convertible Note 3” below). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $166 and $237, respectively, on the Binder Funding Notes. $ 47,000 $ 2,750 Notes payable to Newcan Investment Partners, LLC (“Newcan”), an entity owned by Frank Koretsky, a director of the Company, for advances to fund operations (the “Koretsky Funding Notes”). The Koretsky Funding Notes bear interest at a rate of 6% for loans made through November 30, 2017, and at a rate of 10% for loans made after November 30, 2016. The Koretsky Funding Notes have no maturity date and are due on demand. During the nine months ended February 28, 2017, Frank Koretsky advanced $140,000 and Newcan Investment Partners, LLC advanced $580,000 to the Company under the Koretsky Funding Notes; during the nine months ended February 28, 2017, $210,000 was transferred out of the Koretsky Funding Notes and used to fund a new convertible note payable to Mr. Koretsky (see “Koretsky Convertible Note 3” below) and $460,000 was transferred out of the Koretsky Funding Notes and used to fund new convertible notes payable to Newcan (see “Newcan Convertible Notes 1 and 2” below). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $1,102 and $7,890, respectively, on the Koretsky Funding Notes. 120,000 70,000 Total – Notes Payable, Related Parties $ 167,000 $ 72,750 Current portion $ 167,000 $ - Long term portion $ - $ 72,750 February 28, May 31, 2017 2016 Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated January 12, 2016 and due January 1, 2019 (the “Binder Convertible Note 1”). The Binder Convertible Note 1 was funded with $50,000 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 6% per annum. No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $6,250 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a three-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). The Company recognized a discount of $50,000 on the value of the beneficial conversion feature at the time of issuance of this note. During the nine months ended February 28, 2017, $18,561 of this discount was charged to operations. During the three and nine months ended February 28, 2017 the Company accrued interest in the amount of $740 and $2,244, respectively, on this note. 50,000 50,000 Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated April 8, 2016 and due April 1, 2019 (the “Binder Convertible Note 2”). The Binder Convertible Note 2 was funded with $42,500 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 6% per annum through February 29, 2016 and 10% per annum thereafter. No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $5,313 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). The Company recognized a discount of $37,840 on the value of the beneficial conversion feature at the time of issuance of this note. During the nine months ended February 28, 2017, $14,048 of this discount was charged to operations. During the three and nine months ended February 28, 2016, the Company accrued interest in the amount of $1,048 and $3,179, respectively, on this note. 42,500 42,500 Unsecured convertible note issued to Jeffrey Binder, an officer and director of the Company, dated July 20, 2016 and due July 1, 2019 (the “Binder Convertible Note 3”). The Binder Convertible Note 3 was funded with the conversion of $250,000 of unpaid accrued salary due to Mr. Binder and $12,750 of advances Mr. Binder made to the Company under the Binder Funding Notes. This note bears interest at the rate of 10% per annum. No payments are required until July 1, 2017, at which time all accrued interest becomes due and payable. Commencing on October 1, 2017, the first of eight principal payments in the amount of $32,844 will become due; subsequent principal payments will become due on the first day of each, January, April, July and October until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $6,479 and $16,120, respectively, on this note. 262,750 - Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated January 12, 2016 and due January 1, 2019 (the “Koretsky Convertible Note 1”). The Koretsky Convertible Note 1 was funded with $895,000 of advances Mr. Koretsky made to the Company under the Koretsky Funding Notes. This note bears interest at the rate of 6% per annum. No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $111,875 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). The Company recognized a discount of $895,000 on the value of the beneficial conversion feature at the time of issuance of this note. During the three and nine months ended February 28, 2017, $110,745 and $332,234, respectively, of this discount was charged to operations. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $13,241 and $40,164, respectively, on this note. 895,000 895,000 February 28, May 31, 2017 2016 Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated April 11, 2016 and due April 1, 2019 (the “Koretsky Convertible Note 2”). The Koretsky Convertible Note 2 was funded with $380,000 of advances Mr. Koretsky made to the Company under the Koretsky Funding Notes. This note bears interest at the rate of 6% per annum through February 29, 2016 and 10% per annum thereafter. No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $47,500 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). The Company recognized a discount of $338,336 on the value of the beneficial conversion feature at the time of issuance of this note. During the three and nine months ended February 28, 2017, $41,867 and $125,602, respectively, of this discount was charged to operations. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $9,370 and $28,422, respectively, on this note. 380,000 380,000 Unsecured convertible note issued to Frank Koretsky, a director of the Company, dated July 20, 2016 and due July 1, 2019 (the “Koretsky Convertible Note 3”). The Koretsky Convertible Note 3 was funded with $210,000 of advances Mr. Koretsky made to the Company under the Koretsky Funding Notes. This note bears interest at the rate of 10% per annum. No payments are required until July 1, 2017, at which time all accrued interest becomes due and payable. Commencing on October 1, 2017, the first of eight principal payments in the amount of $32,844 will become due; subsequent principal payments will become due on the first day of each, January, April, July and October until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $5,178 and $13,728, respectively, on this note. 210,000 - Unsecured convertible note issued to CLS CO 2016, LLC an entity affiliated with Frank Koretsky, a director of the Company, dated August 3, 2016 and due August 1, 2018 (the “CLS CO 2016 Note”). This note has a face amount of $150,000 and bears interest at the rate of 15% per annum. All interest accruing on this Note through the first anniversary of this Note shall be added to principal. Commencing on November 1, 2017, the Company shall pay the outstanding principal balance in four (4) equal quarterly installments, together with accrued interest, in arrears, until paid in full. This note and accrued interest under the note may be converted, in whole or in part, into one “Unit” for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $5,548 and $12,884, respectively, on this note. 150,000 - February 28, May 31, 2017 2016 Unsecured convertible note issued to Newcan dated January 10, 410,000 - Unsecured convertible note issued to Newcan Investment Partners LLC an entity affiliated with Frank Koretsky, a director of the Company, dated January 10, 50,000 - Total – Convertible Notes Payable, Related Parties $ 2,450,250 1,367,500 Less: Discount (623,661 ) (1,114,104 ) Convertible Notes Payable, Related Parties, Net of Discounts $ 1,826,589 253,396 Convertible Notes Payable, Related Parties, Net of Discounts, Current Portion $ 731,156 $ 22,678 Convertible Notes Payable, Related Parties, Net of Discounts, Long-term Portion 1,095,433 230,718 February 28, May 31, 2017 2016 Convertible promissory note issued to an unaffiliated third party due April 29, 2018 (the “April 2015 Note”). During the twelve months ended May 31, 2015, the lender loaned the Company the amount of $200,000 pursuant to this note. The April 2015 Note bears interest at a rate of 15% per annum. On the first anniversary of this note, the all then accrued interest became due. Thereafter, the Company is required to make eight equal payments of principal together with accrued interest, quarterly in arrears, commencing on July 1, 2016 until paid in full. The note and any accrued unpaid interest is convertible into common stock of the Company. For each dollar converted, the note holder shall receive two shares of common stock and one three-year warrant to purchase 1.33 shares (post Reverse-Split) of common stock at $0.75 per share (post Reverse-Split). The Company recognized a discount of $200,000 on the April 2015 Note related to the value of the beneficial conversion feature at the time of issuance. During the nine months ended February 28, 2017, $82,390 of this discount was charged to operations. During the three months ended February 27, 2017, the Company repaid principal in the amount of $25,000 and interest in the amount of $6,690 on this note; during the nine months ended February 28, 2017, the Company repaid principal in the amount of $75,000 and interest in the amount of $49,265 on this note. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $4,952 and $18,740, respectively, on this note. 125,000 200,000 Convertible Promissory Notes payable to Old Main Capital, LLC (“Old Main”) dated March 18, 2016, April 22, 2016 and May 27, 2016 On October 6, 2016, the 10% Notes were amended to increase the interest rate to 15% (effective August 1, 2016) and subsequently amended November 28, 2016 to convert the 10% Notes from installment notes to “balloon” notes, with all principal and accrued interest due on September 18, 2017. In exchange for amending the terms of the 10% Notes, the Company increased the outstanding principal balance by 10% to $366,666. In addition the Fixed Conversion Price was changed to a variable conversion price equal to the lesser of the prior Fixed Conversion Price or 75% of the lowest VWAP in the fifteen trading days ending on the trading day immediately prior to the conversion date. This November 28, 2016 amendment required an extinguishment analysis of the 10% Notes resulting in the gain on extinguishment of debt in the amount of $172,618 during the nine months ended February 28, 2017. The gain on extinguishment of debt was included in additional paid in capital during the nine months ended February 28, 2017. The 10% Notes were revalued as of the November 28, 2016 amendment and the Company recognized a discount of $366,666 on the value of the embedded derivative. During the three months ended February 28, 2017 Old Main converted an aggregate of $100,000 of principal, in six transactions, into 828,173 shares of common stock. . At February 28, 2017 and May 31, 2016, the amount of discount remaining on these notes was $264,276 and $326,132, respectively. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $12,649 and $34,959, respectively, on these notes. 266,666 333,332 February 28, May 31, 2017 2016 Convertible promissory note payable to Old Main dated March 18, 2016 and amended on October 6, 2016 and November 28, 2016, and bearing interest at a rate of 8% (the “8% Note”). The 8% Note was issued for Old Main’s commitment to enter into an equity line transaction with the Company and prepare all of the related transaction documents. Originally, Old Main could, at its option, convert all or a portion of the note and accrued but unpaid interest into shares of common stock at a conversion price of $1.07 per share (post Reverse-Split) (the “8% Fixed Conversion Price”). The 8% Fixed Conversion Price is subject to adjustment if, at any time while this note is outstanding, the Company should issue any equity security with an effective price per share that is lower than the 8% Fixed Conversion Price (the “8% Base Conversion Price”), other than certain exempt issuances. In such an instance, the 8% Fixed Conversion Price will be lowered to match the 8% Base Conversion Price. Originally, at the earlier of February 3, 2017 or the effectiveness of the registration statement related to the Company’s equity line, the Company must begin to redeem 1/6th of the face amount of the note and any accrued but unpaid interest on a monthly basis. Such amortization payment could be made, at its option, in cash or, subject to certain conditions, in common stock pursuant to a conversion rate equal to the lower of (a) $1.07 (post Reverse-Split) or (b) 75% of the lowest daily volume weighted average price of the common stock in the twenty consecutive trading days ending on the trading day that is immediately prior to the applicable conversion date. The Company recognized a discount of $172,108 on the value of the embedded derivative at the time of issuance. On November 28, 2016, the 8% Note was amended converting the note from an installment note to a “balloon” note, with all principal and accrued interest due on March 18, 2017. In addition the Fixed Conversion Price was changed to a variable conversion price equal to the lesser of the prior Fixed Conversion Price or 75% of the lowest VWAP in the fifteen trading days ending on the trading day immediately prior to the conversion date. The November 28, 2016 amendment required an extinguishment analysis of the 8% Note resulting in gain on extinguishment of debt in the amount of $81,496 for the nine months ended February 28, 2017. The gain on extinguishment of debt was included in additional paid-in capital at February 28, 2017. The 8% Note was revalued as of the November 28, 2016 amendment and the Company recognized a discount of $169,476 on the value of the embedded derivative. At February 28, 2017 and May 31, 2016, the amount of discount remaining on these notes was $118,998 and $163,586, respectively. During the three and nine months ended February 28, 2017, the Company accrued interest in the amount of $3,945 and $11,967, respectively, on this note. 200,000 200,000 Total - Convertible Notes Payable $ 591,666 $ 733,332 Less: Discount (428,660 ) (587,910 ) Convertible Notes Payable, Net of Discounts $ 163,006 $ 145,422 Total - Convertible Notes Payable, Net of Discounts, Current Portion $ 147,082 $ 72,525 Total - Convertible Notes Payable, Net of Discounts, Long-term Portion $ 15,924 $ 43,312 Discounts on notes payable amortized to interest expense: $ 1,197,998 $ 286,317 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | The following assumptions and key inputs were used for the valuation of the derivative liability related to the 2016 Convertible Notes at November 28, 2016 and February 28, 2017: Assumption Expected dividends: 0 % Expected volatility: 93-168.3 % Expected term (years): 0.55-0.80 years Risk free interest rate: 0.60-0.62 Stock price $ 0.17-0.59 |
Note 12 - Fair Value of Finan25
Note 12 - Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Feb. 28, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following summarizes the Company’s derivative financial liabilities that are recorded at fair value on a recurring basis at February 28, 2017 and May 31, 2016. February 28, 2017 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 167,372 $ 167,372 May 31, 2016 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 418,537 $ 418,537 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The estimated fair values of the Company’s derivative liabilities are as follows: Derivative Liability Liabilities Measured at Fair Value Balance as of May 31, 2016 $ 418,537 Issuances 518,720 Conversions/Redemptions (122,657 ) Extinguishment of debt – related party (254,114 ) Revaluation gain (393,114 ) Balance as of February 28, 2017 $ 167,372 |
Note 1 - Nature of Business a26
Note 1 - Nature of Business and Significant Accounting Policies (Details) | Dec. 10, 2014shares | Nov. 12, 2014shares | Feb. 28, 2017USD ($) | Feb. 29, 2016USD ($) | May 31, 2015USD ($) | May 31, 2016USD ($) |
Note 1 - Nature of Business and Significant Accounting Policies (Details) [Line Items] | ||||||
Stockholders' Equity, Reverse Stock Split | 1-for-0.625 | |||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.625 | |||||
Stock Issued During Period, Value, New Issues | $ 15,000,000 | |||||
Cash and Cash Equivalents, at Carrying Value | $ 5,940 | $ 30,170 | $ 208,821 | $ 88,244 | ||
Advertising Expense | 0 | 9 | ||||
Research and Development Expense | $ 0 | $ 9 | ||||
Shares of CLS Holdings USA, Inc. [Member] | CLS Labs, Inc. [Member] | ||||||
Note 1 - Nature of Business and Significant Accounting Policies (Details) [Line Items] | ||||||
Subsidiary or Equity Method Investee, Cumulative Number of Shares Issued for All Transactions (in Shares) | shares | 6,250,000 | 10,000,000 | ||||
Equity Method Investment, Ownership Percentage | 55.60% |
Note 2 - Going Concern (Details
Note 2 - Going Concern (Details) - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Retained Earnings (Accumulated Deficit) | $ (6,246,786) | $ (4,125,886) |
Note 3 - Prepaid Expenses (Deta
Note 3 - Prepaid Expenses (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid rent | $ 16,381 | $ 0 |
Prepaid legal fees | 6,410 | 6,742 |
Total | $ 22,791 | $ 6,742 |
Note 4 - Construction in Prog29
Note 4 - Construction in Progress (Details) - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Construction in Progress [Abstract] | ||
Construction in Progress, Gross | $ 141,739 | $ 106,726 |
Note 5 - Security Deposit (Deta
Note 5 - Security Deposit (Details) - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Security Deposits [Abstract] | ||
Security Deposit | $ 50,000 | $ 50,000 |
Note 6 - Property, Plant and 31
Note 6 - Property, Plant and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 223 | $ 223 | $ 669 | $ 669 |
Note 6 - Property, Plant and 32
Note 6 - Property, Plant and Equipment (Details) - Schedule of Property, Plant and Equipment - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,674 | $ 2,674 |
Less: accumulated depreciation | (1,561) | (892) |
Property and equipment, net | 1,113 | 1,782 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,674 | $ 2,674 |
Note 7 - Intangible Assets (Det
Note 7 - Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
Note 7 - Intangible Assets (Details) [Line Items] | ||||
Amortization of Intangible Assets | $ 108 | $ 324 | $ 108 | $ 288 |
Internet Domain Names [Member] | ||||
Note 7 - Intangible Assets (Details) [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 60 months |
Note 7 - Intangible Assets (D34
Note 7 - Intangible Assets (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 2,158 | $ 2,158 |
Less: accumulated amortization | (720) | (396) |
Intangible assets, net | 1,438 | 1,762 |
Internet Domain Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 2,158 | $ 2,158 |
Note 8 - Accounts Payable and35
Note 8 - Accounts Payable and Accrued Liabilities (Details) - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Payables and Accruals [Abstract] | ||
Accounts Payable and Accrued Liabilities, Current | $ 569,959 | $ 431,017 |
Note 9 - Related Party Transa36
Note 9 - Related Party Transactions (Details) - USD ($) | Jul. 20, 2016 | Apr. 17, 2015 | Feb. 28, 2017 | Feb. 28, 2017 | Feb. 29, 2016 | May 31, 2016 |
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Employee-related Liabilities, Current | $ 128,750 | $ 128,750 | $ 267,493 | |||
Debt Conversion, Original Debt, Amount | 460,000 | 250,000 | $ 0 | |||
Due to Related Parties, Current | 17,930 | 17,930 | 17,930 | |||
Imputed Interest, Debt | 804 | 807 | ||||
Allocated Share-based Compensation Expense | 0 | 327,500 | ||||
Newcan Investment Partners, LLC [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Debt Instrument, Face Amount | 580,000 | 580,000 | ||||
Chief Executive Officer [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Employee-related Liabilities, Current | 112,500 | 112,500 | 250,000 | |||
Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note 3 [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Debt Instrument, Face Amount | 250,000 | 250,000 | ||||
Chief Executive Officer [Member] | Convertible Debt [Member] | Unpaid Accrued Salary Converted to Convertible Note [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Debt Conversion, Original Debt, Amount | $ 250,000 | |||||
Chief Executive Officer [Member] | Convertible Debt [Member] | Unpaid Accrued Salary Converted to Convertible Note [Member] | Binder Convertible Note 3 [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Debt Conversion, Original Debt, Amount | $ 250,000 | |||||
Former Officer [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Employee-related Liabilities, Current | 16,250 | 16,250 | 16,250 | |||
Chief Executive Officer and Director [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Due to Related Parties, Current | 17,930 | 17,930 | $ 17,930 | |||
Imputed Interest, Debt | 804 | $ 807 | ||||
Affiliated Entity [Member] | Notes Receivable [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Loans and Leases Receivable, Description | prior to Alan Bonsett’s appointment as Chief Operating Officer, the Company, through CLS Labs Colorado, entered into an arrangement with PRH (the “Colorado Arrangement”) to, among other things, (i) license its proprietary technology, methods and processes to PRH in Colorado in exchange for a fee; (ii) sub-lease warehouse and office space in Denver, Colorado to PRH whereby PRH can grow, extract and process cannabis and other plant products in exchange for lease payments totaling an aggregate of $1,067,067 over a seventy-two (72) month term; (iii) build a processing facility and lease such facility, including equipment, to PRH in exchange for a monthly fee; and (iv) loan $500,000 to PRH to be used by PRH in connection with its financing of the building out, equipping, and development of a marijuana grow facility. Mr. Bonsett, as an owner of PRH, will indirectly receive the benefits of the Colorado Arrangement. PRH entered into an arrangement with a third-party grower to grow marijuana at a location that is contiguous to PRH’s leased real property. The grower obtained zoning approval, a certificate of occupancy to begin planting cannabis and operating the grow facility, and a Colorado Retail Marijuana Cultivation Facility License before commencing planting in December 2015, and the grow facility is now fully operational. | |||||
Affiliated Entity [Member] | Building [Member] | Colorado Agreement [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Operating Leases, Future Minimum Payments Receivable | $ 1,067,067 | |||||
Lessee, Operating Lease, Term of Contract | 72 months | |||||
Chief Operating Officer [Member] | One Time Signing Bonus [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) | 250,000 | |||||
Allocated Share-based Compensation Expense | $ 327,500 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||
Entity Affiliated with Director [Member] | Convertible Debt [Member] | CLS Co 2016 Note [Member] | ||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||
Debt Instrument, Face Amount | $ 150,000 | $ 150,000 |
Note 10 - Notes Payable (Detail
Note 10 - Notes Payable (Details) - Schedule of Debt - USD ($) | 9 Months Ended | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | May 31, 2016 | |
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Related party notes | $ 167,000 | $ 72,750 | |
Current portion | 167,000 | 0 | |
Long term portion | 0 | 72,750 | |
Convertible Notes Payable, Current, Gross | 147,082 | 72,525 | |
Convertible Notes Payable, Noncurrent, Gross | 15,924 | 43,312 | |
Discounts on notes payable amortized to interest expense: | 1,197,998 | $ 114,489 | 286,317 |
Convertible Notes Payable, Current, Gross | 731,156 | 22,678 | |
Convertible Notes Payable, Noncurrent, Gross | 1,095,433 | 230,718 | |
Convertible Debt [Member] | Newcan Investment Partners LLC, Note #1 [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 410,000 | 0 | |
Convertible Debt [Member] | Koretsky Note #4 [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 50,000 | 0 | |
Convertible Debt [Member] | Related Party Debt [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 2,450,250 | 1,367,500 | |
Less: Discount | (623,661) | (1,114,104) | |
Convertible Notes Payable, net | 1,826,589 | 253,396 | |
Convertible Debt [Member] | Trocki Note [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 125,000 | 200,000 | |
Convertible Debt [Member] | Old Main 10% Notes [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 266,666 | 333,332 | |
Convertible Debt [Member] | Old Main 8% Note [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 200,000 | 200,000 | |
Convertible Debt [Member] | Non-Related Party Debt [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 591,666 | 733,332 | |
Less: Discount | (428,660) | (587,910) | |
Convertible Notes Payable, net | 163,006 | 145,422 | |
Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 50,000 | 50,000 | |
Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note 2 [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 42,500 | 42,500 | |
Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note 3 [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 262,750 | 0 | |
Chief Executive Officer [Member] | Loans Payable [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Related party notes | 47,000 | 2,750 | |
Director [Member] | Convertible Debt [Member] | Koretsky Convertible Note [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 895,000 | 895,000 | |
Director [Member] | Convertible Debt [Member] | Koretsky Convertible Note 2 [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 380,000 | 380,000 | |
Director [Member] | Convertible Debt [Member] | Koretsky Convertible Note 3 [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | 210,000 | 0 | |
Director [Member] | Loans Payable [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Related party notes | 120,000 | 70,000 | |
Entity Affiliated with Director [Member] | Convertible Debt [Member] | CLS Co 2016 Note [Member] | |||
Note 10 - Notes Payable (Details) - Schedule of Debt [Line Items] | |||
Convertible Notes Payable, Gross | $ 150,000 | $ 0 |
Note 10 - Notes Payable (Deta38
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) - USD ($) | Nov. 28, 2016 | Feb. 28, 2017 | Feb. 28, 2017 | Feb. 29, 2016 | May 31, 2016 |
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Advances reclassified to convertible notes payable | $ 460,000 | $ 250,000 | $ 0 | ||
Advances to fund operations | 838,000 | 392,750 | |||
Repaid | 61,000 | 0 | |||
Beneficial conversion feature | 518,720 | 945,000 | |||
Gain on extinguishment of debt | $ 254,114 | 254,114 | 0 | ||
Amount converted | 222,657 | $ 0 | |||
Newcan Investment Partners, LLC [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Note amount | 580,000 | $ 580,000 | |||
Old Main 10% Notes [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Advances reclassified to convertible notes payable | $ 100,000 | ||||
Number of shares issued for conversion (in Shares) | 828,173 | ||||
Convertible Debt [Member] | Newcan Investment Partners LLC, Note #1 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 10.00% | 10.00% | |||
Accrued interest | $ 5,504 | $ 5,504 | |||
Note amount | $ 410,000 | $ 410,000 | |||
Payment terms | No payments are required until January 2, 2018, at which time all accrued interest becomes due and payable. Commencing on April 1, 2018, the first of eight principal payments in the amount of $51,250 will become due; subsequent principal payments will become due on the first day of each, July, October, January, and April until paid in full. | ||||
Conversion terms | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split) | ||||
Note dated | Jan. 10, 2017 | ||||
Note due | Jan. 2, 2020 | ||||
Conversion price (in Dollars per share) | $ 1.07 | $ 1.07 | |||
Convertible Debt [Member] | Koretsky Note #4 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 10.00% | 10.00% | |||
Accrued interest | $ 671 | $ 671 | |||
Note amount | $ 50,000 | $ 50,000 | |||
Payment terms | No payments are required until January 2, 2018, at which time all accrued interest becomes due and payable. Commencing on April 1, 2018, the first of eight principal payments in the amount of $6,250 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. | ||||
Conversion terms | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). | ||||
Note dated | Jan. 10, 2017 | ||||
Note due | Jan. 2, 2020 | ||||
Conversion price (in Dollars per share) | $ 1.07 | $ 1.07 | |||
Convertible Debt [Member] | Trocki Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 15.00% | 15.00% | 15.00% | ||
Accrued interest | $ 18,740 | $ 18,740 | |||
Note amount | $ 200,000 | $ 200,000 | $ 200,000 | ||
Payment terms | On the first anniversary of this note, the all then accrued interest became due. Thereafter, the Company is required to make eight equal payments of principal together with accrued interest, quarterly in arrears, commencing on July 1, 2016 until paid in full. | On the first anniversary of this note, the all then accrued interest became due. Thereafter, the Company is required to make eight equal payments of principal together with accrued interest, quarterly in arrears, commencing on July 1, 2016 until paid in full. | |||
Conversion terms | The note and any accrued unpaid interest is convertible into common stock of the Company. For each dollar converted, the note holder shall receive two shares of common stock and one three-year warrant to purchase 1.33 shares (post Reverse-Split) of common stock at $0.75 per share (post Reverse-Split). | The note and any accrued unpaid interest is convertible into common stock of the Company. For each dollar converted, the note holder shall receive two shares of common stock and one three-year warrant to purchase 1.33 shares (post Reverse-Split) of common stock at $0.75 per share (post Reverse-Split). | |||
Beneficial conversion feature | $ 200,000 | ||||
Discount charged to operations | $ 82,390 | ||||
Note due | Apr. 29, 2018 | Apr. 29, 2018 | |||
Conversion price (in Dollars per share) | $ 0.75 | $ 0.75 | $ 0.75 | ||
Convertible Debt [Member] | Old Main 10% Notes [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 15.00% | 15.00% | 10.00% | ||
Accrued interest | $ 34,959 | $ 34,959 | |||
Note amount | $ 366,666 | $ 366,666 | $ 333,333 | ||
Payment terms | On October 6, 2016 the 10% Notes were amended to increase the interest rate to 15% (effective August 1, 2016) and subsequently amended November 28, 2016 to convert the 10% Notes from installment notes to "balloon" notes, with all principal and accrued interest due on September 18, 2017. In exchange for amending the terms of the 10% Notes, the Company increased the outstanding principal balance by 10% to $366,666. | Originally, at the earlier of October 18, 2016 or two trading days after the registration statement related to the Company's equity line was declared effective, the Company must begin to redeem 1/24th of the face amount of the notes and any accrued but unpaid interest on a bi-weekly basis. Such amortization payments could be made, at the Company's option, in cash or, subject to certain conditions, in common stock pursuant to a conversion rate equal to the lower of (a) $0.80 or (b) 75% of the lowest daily volume weighted average price of the common stock in the twenty consecutive trading days immediately prior to the conversion date. | |||
Conversion terms | In addition the Fixed Conversion Price was changed to a variable conversion price equal to the lesser of the prior Fixed Conversion Price or 75% of the lowest VWAP in the fifteen trading days ending on the trading day immediately prior to the conversion date. | Initially, Old Main could, at its option, convert all or a portion of the notes and accrued but unpaid interest into shares of common stock at a conversion price of $0.80 per share (post Reverse-Split) (the "Fixed Conversion Price"). The Fixed Conversion Price is subject to adjustment if, at any time while this note is outstanding, the Company should issue any equity security with an effective price per share that is lower than the Fixed Conversion Price (the "Base Conversion Price"), other than certain exempt issuances. In such an instance, the Fixed Conversion Price will be lowered to match the Base Conversion Price. | |||
Discount charged to operations | $ 264,276 | ||||
Note dated | May 27, 2016 | May 27, 2016 | |||
Note due | Sep. 18, 2017 | ||||
Conversion price (in Dollars per share) | $ 0.80 | ||||
Discount recognized | $ 366,666 | $ 330,188 | |||
Note increase | 10.00% | ||||
Amount converted | $ 100,000 | ||||
Number of shares issued for conversion (in Shares) | 828,173 | ||||
Convertible Debt [Member] | Old Main 8% Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 8.00% | 8.00% | 8.00% | ||
Accrued interest | $ 11,967 | $ 11,967 | |||
Payment terms | On November 28, 2016 the 8% Note was amended converting the note from an installment note to a "balloon" note, with all principal and accrued interest due March 18, 2017. | Originally, at the earlier of February 3, 2017 or the effectiveness of the registration statement related to the Company's equity line, the Company must begin to redeem 1/6th of the face amount of the note and any accrued but unpaid interest on a monthly basis. Such amortization payment could be made, at its option, in cash or, subject to certain conditions, in common stock pursuant to a conversion rate equal to the lower of (a) $1.07 (post Reverse-Split) or (b) 75% of the lowest daily volume weighted average price of the common stock in the twenty consecutive trading days ending on the trading day that is immediately prior to the applicable conversion date. | |||
Conversion terms | In addition the Fixed Conversion Price was changed to variable conversion price equal to the lesser of the prior Fixed Conversion Price or 75% of the lowest VWAP in the fifteen trading days ending on the trading day immediately prior to the conversion date. | Originally, Old Main could, at its option, convert all or a portion of the note and accrued but unpaid interest into shares of common stock at a conversion price of $1.07 per share (post Reverse-Split) (the "8% Fixed Conversion Price"). The 8% Fixed Conversion Price is subject to adjustment if, at any time while this note is outstanding, the Company should issue any equity security with an effective price per share that is lower than the 8% Fixed Conversion Price (the "8% Base Conversion Price"), other than certain exempt issuances. In such an instance, the 8% Fixed Conversion Price will be lowered to match the 8% Base Conversion Price. | |||
Discount charged to operations | $ 118,998 | ||||
Note dated | Mar. 18, 2016 | Mar. 18, 2016 | |||
Note due | Mar. 18, 2017 | ||||
Conversion price (in Dollars per share) | $ 1.07 | ||||
Discount recognized | $ 169,476 | $ 172,108 | |||
Convertible Debt [Member] | Principal [Member] | Trocki Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Repaid | 75,000 | ||||
Convertible Debt [Member] | Interest [Member] | Trocki Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Repaid | 49,265 | ||||
Convertible Debt [Member] | Extinguishment Analysis on Amended Convertible Notes [Member] | Old Main 10% Notes [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Discount charged to operations | 326,132 | ||||
Gain on extinguishment of debt | 172,618 | ||||
Convertible Debt [Member] | Extinguishment Analysis on Amended Convertible Notes [Member] | Old Main 8% Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Discount charged to operations | 163,586 | ||||
Gain on extinguishment of debt | 81,496 | ||||
Chief Executive Officer [Member] | Advances Reclassified to Convertible Notes [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Advances reclassified to convertible notes payable | $ 12,750 | ||||
Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 6.00% | 6.00% | 6.00% | ||
Accrued interest | $ 2,244 | $ 2,244 | |||
Note amount | $ 50,000 | $ 50,000 | $ 50,000 | ||
Payment terms | No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $6,250 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. | No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $6,250 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. | |||
Conversion terms | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a three-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a three-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). | |||
Beneficial conversion feature | $ 50,000 | ||||
Discount charged to operations | $ 18,561 | ||||
Note dated | Jan. 12, 2016 | Jan. 12, 2016 | |||
Note due | Jan. 1, 2019 | Jan. 1, 2019 | |||
Conversion price (in Dollars per share) | $ 0.75 | $ 0.75 | $ 0.75 | ||
Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note 2 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 10.00% | 10.00% | 10.00% | ||
Accrued interest | $ 1,048 | $ 1,048 | |||
Note amount | $ 42,500 | $ 42,500 | $ 42,500 | ||
Payment terms | No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $5,313 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. | No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $5,313 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. | |||
Conversion terms | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). | |||
Beneficial conversion feature | $ 37,840 | ||||
Discount charged to operations | $ 14,048 | ||||
Note dated | Apr. 8, 2016 | Apr. 8, 2016 | |||
Note due | Apr. 1, 2019 | Apr. 1, 2019 | |||
Conversion price (in Dollars per share) | $ 1.07 | $ 1.07 | $ 1.07 | ||
Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note 3 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 10.00% | 10.00% | |||
Accrued interest | $ 16,120 | $ 16,120 | |||
Note amount | $ 250,000 | $ 250,000 | |||
Payment terms | No payments are required until July 1, 2017, at which time all accrued interest becomes due and payable. Commencing on October 1, 2017, the first of eight principal payments in the amount of $32,844 will become due; subsequent principal payments will become due on the first day of each, January, April, July and October until paid in full. | ||||
Conversion terms | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). | ||||
Note dated | Jul. 20, 2016 | ||||
Note due | Jul. 1, 2019 | ||||
Conversion price (in Dollars per share) | $ 1.07 | $ 1.07 | |||
Chief Executive Officer [Member] | Convertible Debt [Member] | Advances Reclassified to Convertible Notes [Member] | Binder Convertible Note 3 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Note amount | $ 12,750 | $ 12,750 | |||
Chief Executive Officer [Member] | Loans Payable [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 6.00% | 6.00% | 6.00% | ||
Advances to fund operations | $ 118,000 | ||||
Repaid | $ 61,000 | ||||
Director [Member] | Convertible Debt [Member] | Koretsky Convertible Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 6.00% | 6.00% | 6.00% | ||
Accrued interest | $ 40,164 | $ 40,164 | |||
Note amount | $ 895,000 | $ 895,000 | $ 895,000 | ||
Payment terms | No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $111,875 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. | No payments are required until January 1, 2017, at which time all accrued interest becomes due and payable. Commencing on April 1, 2017, the first of eight principal payments in the amount of $111,875 will become due; subsequent principal payments will become due on the first day of each July, October, January, and April until paid in full. | |||
Conversion terms | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $0.75 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.00 per share (post Reverse-Split). | |||
Beneficial conversion feature | $ 895,000 | ||||
Discount charged to operations | $ 332,234 | ||||
Note dated | Jan. 12, 2016 | Jan. 12, 2016 | |||
Note due | Jan. 1, 2019 | Jan. 1, 2019 | |||
Conversion price (in Dollars per share) | $ 0.75 | $ 0.75 | |||
Director [Member] | Convertible Debt [Member] | Koretsky Convertible Note 2 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 10.00% | 10.00% | 10.00% | ||
Accrued interest | $ 28,422 | $ 28,422 | |||
Note amount | $ 380,000 | $ 380,000 | $ 380,000 | ||
Payment terms | No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $47,500 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. | No payments are required until April 1, 2017, at which time all accrued interest becomes due and payable. Commencing on July 1, 2017, the first of eight principal payments in the amount of $47,500 will become due; subsequent principal payments will become due on the first day of each October, January, April, and July until paid in full. | |||
Conversion terms | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). | |||
Beneficial conversion feature | $ 338,336 | ||||
Discount charged to operations | $ 125,602 | ||||
Note dated | Apr. 11, 2016 | Apr. 11, 2016 | |||
Note due | Apr. 1, 2019 | Apr. 1, 2019 | |||
Conversion price (in Dollars per share) | $ 1.07 | $ 1.07 | |||
Director [Member] | Convertible Debt [Member] | Koretsky Convertible Note 3 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 10.00% | 10.00% | |||
Accrued interest | $ 13,728 | $ 13,728 | |||
Note amount | $ 210,000 | $ 210,000 | |||
Payment terms | No payments are required until July 1, 2017, at which time all accrued interest becomes due and payable. Commencing on October 1, 2017, the first of eight principal payments in the amount of $32,844 will become due; subsequent principal payments will become due on the first day of each, January, April, July and October until paid in full. | ||||
Conversion terms | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). | ||||
Note dated | Jul. 20, 2016 | ||||
Note due | Jul. 1, 2019 | ||||
Conversion price (in Dollars per share) | $ 1.07 | $ 1.07 | |||
Director [Member] | Loans Payable [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 10.00% | 10.00% | 10.00% | ||
Advances reclassified to convertible notes payable | $ 210,000 | ||||
Advances to fund operations | 140,000 | ||||
Accrued interest | $ 7,890 | 7,890 | |||
Director [Member] | Loans Payable [Member] | Newcan Investment Partners, LLC [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Advances reclassified to convertible notes payable | 460,000 | ||||
Advances to fund operations | $ 580,000 | ||||
Entity Affiliated with Director [Member] | Convertible Debt [Member] | CLS Co 2016 Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Interest rate | 15.00% | 15.00% | |||
Accrued interest | $ 12,884 | $ 12,884 | |||
Note amount | $ 150,000 | $ 150,000 | |||
Payment terms | Commencing on November 1, 2017, the Company shall pay the outstanding principal balance in four (4) equal quarterly installments, together with accrued interest, in arrears, until paid in full. | ||||
Conversion terms | This note and accrued interest under the note may be converted, in whole or in part, into one "Unit" for each $1.07 converted, with each Unit consisting of one (1) share of common stock and a five-year warrant to purchase (1) share of common stock at a price of $1.07 per share (post Reverse-Split). | ||||
Note dated | Aug. 3, 2016 | ||||
Note due | Aug. 1, 2018 | ||||
Conversion price (in Dollars per share) | $ 1.07 | $ 1.07 | |||
Three Months Ended February 28, 2017 [Member] | Convertible Debt [Member] | Newcan Investment Partners LLC, Note #1 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | $ 5,504 | $ 5,504 | |||
Three Months Ended February 28, 2017 [Member] | Convertible Debt [Member] | Koretsky Note #4 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 671 | 671 | |||
Three Months Ended February 28, 2017 [Member] | Convertible Debt [Member] | Trocki Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Repaid | 6,690 | ||||
Three Months Ended February 28, 2017 [Member] | Convertible Debt [Member] | Old Main 10% Notes [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 12,649 | 12,649 | |||
Three Months Ended February 28, 2017 [Member] | Convertible Debt [Member] | Old Main 8% Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 3,945 | 3,945 | |||
Three Months Ended February 28, 2017 [Member] | Convertible Debt [Member] | Principal [Member] | Trocki Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Repaid | 25,000 | ||||
Three Months Ended February 28, 2017 [Member] | Convertible Debt [Member] | Interest [Member] | Trocki Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 4,952 | 4,952 | |||
Three Months Ended February 28, 2017 [Member] | Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 740 | 740 | |||
Three Months Ended February 28, 2017 [Member] | Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note 2 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 3,179 | 3,179 | |||
Three Months Ended February 28, 2017 [Member] | Chief Executive Officer [Member] | Convertible Debt [Member] | Binder Convertible Note 3 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 6,479 | 6,479 | |||
Three Months Ended February 28, 2017 [Member] | Chief Executive Officer [Member] | Loans Payable [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 166 | 166 | |||
Three Months Ended February 28, 2017 [Member] | Director [Member] | Convertible Debt [Member] | Koretsky Convertible Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 13,241 | 13,241 | |||
Discount charged to operations | 110,745 | ||||
Three Months Ended February 28, 2017 [Member] | Director [Member] | Convertible Debt [Member] | Koretsky Convertible Note 2 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 9,370 | 9,370 | |||
Discount charged to operations | 41,867 | ||||
Three Months Ended February 28, 2017 [Member] | Director [Member] | Convertible Debt [Member] | Koretsky Convertible Note 3 [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 5,178 | 5,178 | |||
Three Months Ended February 28, 2017 [Member] | Director [Member] | Loans Payable [Member] | Newcan Investment Partners, LLC [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 1,102 | 1,102 | |||
Three Months Ended February 28, 2017 [Member] | Entity Affiliated with Director [Member] | Convertible Debt [Member] | CLS Co 2016 Note [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | 5,548 | 5,548 | |||
Nine Months Ended February 28, 2017 [Member] | Chief Executive Officer [Member] | Loans Payable [Member] | |||||
Note 10 - Notes Payable (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Accrued interest | $ 237 | $ 237 |
Note 10 - Notes Payable (Deta39
Note 10 - Notes Payable (Details) - Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | 9 Months Ended |
Feb. 28, 2017$ / shares | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Expected dividends: | 0.00% |
Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Expected volatility: | 93.00% |
Expected term (years): | 200 days |
Risk free interest rate: | 0.60% |
Stock price (in Dollars per share) | $ 0.17 |
Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Expected volatility: | 168.30% |
Expected term (years): | 292 days |
Risk free interest rate: | 0.62% |
Stock price (in Dollars per share) | $ 0.59 |
Note 11 - Stockholders' Equity
Note 11 - Stockholders' Equity (Details) | Nov. 28, 2016USD ($) | Jan. 19, 2016USD ($) | Dec. 15, 2015USD ($)shares | Oct. 09, 2015USD ($)shares | Aug. 28, 2015USD ($)shares | Aug. 26, 2015USD ($)shares | Aug. 17, 2015USD ($)shares | Jul. 22, 2015USD ($)shares | Dec. 10, 2014shares | Feb. 28, 2017USD ($)$ / sharesshares | Feb. 28, 2017USD ($)$ / sharesshares | Feb. 29, 2016USD ($) | May 31, 2016USD ($)$ / sharesshares | May 31, 2015USD ($)shares |
Note 11 - Stockholders' Equity (Details) [Line Items] | ||||||||||||||
Common Stock, Shares Authorized | shares | 250,000,000 | 250,000,000 | 250,000,000 | |||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||
Preferred Stock, Shares Authorized | shares | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Common Stock, Shares, Issued | shares | 21,178,176 | 21,178,176 | 20,350,003 | |||||||||||
Common Stock, Shares, Outstanding | shares | 11,250,000 | 21,178,176 | 21,178,176 | 20,350,003 | ||||||||||
Stockholders' Equity, Reverse Stock Split | 1-for-0.625 | |||||||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.625 | |||||||||||||
Imputed Interest, Debt (in Dollars) | $ 804 | $ 807 | ||||||||||||
Gain (Loss) on Extinguishment of Debt (in Dollars) | $ 254,114 | 254,114 | 0 | |||||||||||
Debt Conversion, Original Debt, Amount (in Dollars) | $ 460,000 | $ 250,000 | 0 | |||||||||||
Embedded Derivative, No Longer Bifurcated, Amount Reclassified to Stockholders' Equity (in Dollars) | $ 222,574 | |||||||||||||
Stock to be Issued | shares | 70,000 | 70,000 | ||||||||||||
Stock Payable (in Dollars) | $ 65,700 | $ 65,700 | $ 65,700 | |||||||||||
Issuance of Stock and Warrants for Services or Claims (in Dollars) | 0 | 115,050 | ||||||||||||
Stock Issued and Issuable to Consultant #1 [Member] | ||||||||||||||
Note 11 - Stockholders' Equity (Details) [Line Items] | ||||||||||||||
Stock Issued During Period, Shares, Issued for Services | shares | 60,000 | |||||||||||||
Stock Issued During Period, Value, Issued for Services (in Dollars) | $ 45,000 | |||||||||||||
Stock to be Issued | shares | 50,000 | |||||||||||||
Stock Payable (in Dollars) | $ 37,500 | |||||||||||||
Stock Issued or Issuable to Consultant #2 [Member] | ||||||||||||||
Note 11 - Stockholders' Equity (Details) [Line Items] | ||||||||||||||
Stock Issued During Period, Shares, Issued for Services | shares | 40,000 | |||||||||||||
Stock Issued During Period, Value, Issued for Services (in Dollars) | $ 32,750 | |||||||||||||
Stock to be Issued for Services | shares | 10,000 | 10,000 | 10,000 | 5,000 | 5,000 | |||||||||
Issuance of Stock and Warrants for Services or Claims (in Dollars) | $ 8,000 | $ 11,700 | $ 12,700 | $ 6,650 | $ 5,750 | |||||||||
Old Main 10% Notes [Member] | ||||||||||||||
Note 11 - Stockholders' Equity (Details) [Line Items] | ||||||||||||||
Debt Conversion, Original Debt, Amount (in Dollars) | $ 100,000 | |||||||||||||
Number of Transactions | 6 | |||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 828,173 | |||||||||||||
Embedded Derivative, No Longer Bifurcated, Amount Reclassified to Stockholders' Equity (in Dollars) | $ 122,657 | |||||||||||||
Chief Executive Officer and Director [Member] | ||||||||||||||
Note 11 - Stockholders' Equity (Details) [Line Items] | ||||||||||||||
Imputed Interest, Debt (in Dollars) | 804 | $ 807 | ||||||||||||
Chief Operating Officer [Member] | ||||||||||||||
Note 11 - Stockholders' Equity (Details) [Line Items] | ||||||||||||||
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures (in Dollars) | $ 327,500 | |||||||||||||
Share-based Compensation (in Dollars) | $ 327,500 | |||||||||||||
Chief Operating Officer [Member] | One Time Signing Bonus [Member] | ||||||||||||||
Note 11 - Stockholders' Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 250,000 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year |
Note 12 - Fair Value of Finan41
Note 12 - Fair Value of Financial Instruments (Details) | 3 Months Ended | 9 Months Ended | |
Feb. 28, 2017USD ($)shares | Feb. 28, 2017USD ($) | Feb. 29, 2016USD ($) | |
Note 12 - Fair Value of Financial Instruments (Details) [Line Items] | |||
Debt Conversion, Original Debt, Amount | $ 460,000 | $ 250,000 | $ 0 |
Embedded Derivative, No Longer Bifurcated, Amount Reclassified to Stockholders' Equity | 222,574 | ||
Old Main 10% Notes [Member] | |||
Note 12 - Fair Value of Financial Instruments (Details) [Line Items] | |||
Debt Conversion, Original Debt, Amount | $ 100,000 | ||
Number of Transactions | 6 | ||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 828,173 | ||
Embedded Derivative, No Longer Bifurcated, Amount Reclassified to Stockholders' Equity | $ 122,657 |
Note 12 - Fair Value of Finan42
Note 12 - Fair Value of Financial Instruments (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis - USD ($) | Feb. 28, 2017 | May 31, 2016 |
Note 12 - Fair Value of Financial Instruments (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Derivative liabilities | $ 167,372 | $ 418,537 |
Fair Value, Inputs, Level 1 [Member] | ||
Note 12 - Fair Value of Financial Instruments (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Derivative liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Note 12 - Fair Value of Financial Instruments (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Derivative liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Note 12 - Fair Value of Financial Instruments (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Derivative liabilities | $ 167,372 | $ 418,537 |
Note 12 - Fair Value of Finan43
Note 12 - Fair Value of Financial Instruments (Details) - Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | 9 Months Ended |
Feb. 28, 2017USD ($) | |
Liabilities Measured at Fair Value | |
Balance as of May 31, 2016 | $ 418,537 |
Issuances | 518,720 |
Conversions/Redemptions | (122,657) |
Extinguishment of debt – related party | (254,114) |
Revaluation gain | (393,114) |
Balance as of February 28, 2017 | $ 167,372 |
Note 13 - Commitment and Cont44
Note 13 - Commitment and Contingencies (Details) | Mar. 01, 2017USD ($) | Jul. 20, 2016USD ($) | Aug. 01, 2015USD ($) | Oct. 01, 2014USD ($) | Mar. 31, 2017USD ($) | Feb. 28, 2017USD ($)ft²a | Feb. 28, 2017USD ($)ft²a | Feb. 29, 2016USD ($) | May 31, 2016USD ($)shares |
Note 13 - Commitment and Contingencies (Details) [Line Items] | |||||||||
Debt Conversion, Original Debt, Amount | $ 460,000 | $ 250,000 | $ 0 | ||||||
Employee-related Liabilities, Current | 128,750 | 128,750 | $ 267,493 | ||||||
Allocated Share-based Compensation Expense | 0 | 327,500 | |||||||
Chief Executive Officer [Member] | |||||||||
Note 13 - Commitment and Contingencies (Details) [Line Items] | |||||||||
Employment Agreement, Term | 5 years | ||||||||
Officers' Compensation | $ 150,000 | 150,000 | |||||||
Deferred Compensation Arrangement with Individual, Description | performance bonus equal to 2% of CLS Labs’ annual EBITDA, up to a maximum annual cash compensation of $1 million (including his base salary) | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | annual stock options, exercisable at the fair market value of CLS Labs’ common stock on the date of grant, in an amount equal to 2% of its annual EBITDA up to $42.5 million and 4% of its annual EBITDA in excess of $42.5 million | ||||||||
Employee-related Liabilities, Current | 112,500 | 112,500 | $ 250,000 | ||||||
Chief Executive Officer [Member] | Convertible Debt [Member] | Unpaid Accrued Salary Converted to Convertible Note [Member] | |||||||||
Note 13 - Commitment and Contingencies (Details) [Line Items] | |||||||||
Debt Conversion, Original Debt, Amount | $ 250,000 | ||||||||
Chief Operating Officer [Member] | |||||||||
Note 13 - Commitment and Contingencies (Details) [Line Items] | |||||||||
Employment Agreement, Term | 5 years | ||||||||
Officers' Compensation | $ 150,000 | ||||||||
Deferred Compensation Arrangement with Individual, Description | performance bonus equal to 2% of the Company’s annual EBITDA, up to a maximum annual cash compensation of $1 million (including his base salary) | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | annual stock options, exercisable at the fair market value of the Company’s common stock on the date of grant, in an amount equal to 2% of its annual EBITDA up to $42.5 million and 4% of its annual EBITDA in excess of $42.5 million | ||||||||
Chief Operating Officer [Member] | One Time Signing Bonus [Member] | |||||||||
Note 13 - Commitment and Contingencies (Details) [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) | shares | 250,000 | ||||||||
Allocated Share-based Compensation Expense | $ 327,500 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | ||||||||
Former Officer [Member] | |||||||||
Note 13 - Commitment and Contingencies (Details) [Line Items] | |||||||||
Employee-related Liabilities, Current | $ 16,250 | $ 16,250 | $ 16,250 | ||||||
Building [Member] | Affiliated Entity [Member] | |||||||||
Note 13 - Commitment and Contingencies (Details) [Line Items] | |||||||||
Area of Real Estate Property (in Square Feet) | ft² | 42,392 | 42,392 | |||||||
Area of Land (in Acres) | a | 1.92 | 1.92 | |||||||
Operating Leases, Rent Expense | $ 139,827 | $ 163,024 | |||||||
Subsequent Event [Member] | |||||||||
Note 13 - Commitment and Contingencies (Details) [Line Items] | |||||||||
Debt Conversion, Original Debt, Amount | $ 37,500 | ||||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | Convertible Debt [Member] | Unpaid Accrued Salary Converted to Convertible Note [Member] | |||||||||
Note 13 - Commitment and Contingencies (Details) [Line Items] | |||||||||
Debt Conversion, Original Debt, Amount | $ 112,500 |
Note 14 - Subsequent Events (De
Note 14 - Subsequent Events (Details) | Mar. 27, 2017USD ($)$ / shares | Mar. 31, 2017USD ($)shares | Feb. 28, 2017USD ($) | Feb. 28, 2017USD ($) | Feb. 29, 2016USD ($) |
Note 14 - Subsequent Events (Details) [Line Items] | |||||
Debt Conversion, Original Debt, Amount | $ 460,000 | $ 250,000 | $ 0 | ||
Subsequent Event [Member] | |||||
Note 14 - Subsequent Events (Details) [Line Items] | |||||
Debt Conversion, Original Debt, Amount | $ 37,500 | ||||
Number of Transactions | 2 | ||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 857,808 | ||||
Debt Instrument, Maturity Date | Apr. 1, 2017 | ||||
Convertible Debt | $ 372,669.95 | ||||
Description of Amendment | the Company agreed to (i) prepay all amounts due under the 10% Notes on or before April 1, 2017, which amount was agreed to be $372,669.95 (the "Settlement Amount"), and (ii) to increase the outstanding amount due under the 8% Note as of March 18, 2017 by 5%. In exchange for doing so, Old Main agreed to extend the maturity of the 8% Note until July 1, 2017 and to suspend conversions under the 8% Note until July 1, 2017. If we fail to pay the Settlement Amount on or before April 1, 2017, Old Main has the right to declare the Third Amendment null and void | ||||
Subsequent Event [Member] | Convertible Debt [Member] | Newcan Invesment Partners LLC, Note #3 [Member] | |||||
Note 14 - Subsequent Events (Details) [Line Items] | |||||
Debt Instrument, Face Amount | $ 120,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||
Debt Instrument, Payment Terms | No payments are required until April 1, 2018, at which time all accrued interest becomes due and payable. Principal will be paid in eight equal quarterly installments, together with interest accrued thereon, beginning on July 1, 2018. The Notes may be prepaid by the Company with no penalty at any time upon thirty days written notice | ||||
Debt Instrument, Convertible, Terms of Conversion Feature | For each $0.25 converted, the holder will receive one share of the Company’s common stock and a five-year warrant to purchase one share of the Company’s common stock at a price of $0.25 per share. | ||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 0.25 | ||||
Subsequent Event [Member] | Convertible Debt [Member] | Binder Convertible Notes #4 [Member] | |||||
Note 14 - Subsequent Events (Details) [Line Items] | |||||
Debt Instrument, Face Amount | $ 159,500 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||
Debt Instrument, Payment Terms | No payments are required until April 1, 2018, at which time all accrued interest becomes due and payable. Principal will be paid in eight equal quarterly installments, together with interest accrued thereon, beginning on July 1, 2018. The Notes may be prepaid by the Company with no penalty at any time upon thirty days written notice | ||||
Debt Instrument, Convertible, Terms of Conversion Feature | For each $0.25 converted, the holder will receive one share of the Company’s common stock and a five-year warrant to purchase one share of the Company’s common stock at a price of $0.25 per share. | ||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 0.25 |