Income Taxes (Tables)

12 Months Ended

May 31, 2020

Reconciliation of Federal Statutory Income Tax

Reconciliation of the federal statutory income tax rate of 21% for the year ended May 31, 2020, the federal statutory blended rate of 21% for the year ended May 31, 2019 and the federal statutory rate of 28.6% for the year ended May 31, 2018, to the effective income tax rate is as follows for all periods presented:

	2020			2019			2018
Income tax provision at statutory rate:		21.0	%		21.0	%		28.6	%
State income taxes net		—			—			—
Rate change		—			—			(34.8	)
Loss on debt extinguishment		—			(0.5	)		—
Derivative gain (loss)		(1.6	)		0.6			1.0
Valuation allowance release from asset acquisition		—			4.8			—
Non-deductible debt issuance costs		(0.1	)		—			(0.2	)
Non-deductible interest on convertible notes		(1.2	)		(0.3	)		(0.1	)
Inducement interest expense		(1.3	)		(0.1	)		(2.0	)
Other		(0.3	)		—			(1.1	)
Miscellaneous		—			—			(0.1	)
Current year credits generated		—			—			4.4
Credit carry forward generated (released)		(0.1	)		(3.8	)		4.1
Non-deductible debt discount amortization		(0.3	)		—			—
IRC 162(m) limitation		(2.4	)		—			—
Stock compensation in excess of ASC 718		3.2			—			—
Non-deductible legal settlement expense		(3.8	)		—			—
Valuation allowance		(13.1	)		(16.9	)		0.3
Effective income tax rate		0.0%			4.8%			0.0%

Net Deferred Tax Assets and Liabilities

Net deferred tax assets and liabilities are comprised of the following as of May 31, 2020 and 2019:

	2020			2019
Deferred tax asset (liability) non-current:
Net operating loss	$	55,624,018		$	39,996,561
Credits		2,062,692			2,062,692
ASC 718 expense on NQO’s		4,069,035			3,628,085
Charitable contribution—carry forward		—			—
Accrued vacation & payroll		111,514			—
ASC 842 lease accounting		(429	)		—
Accrued expenses		349,384			251,293
Fixed assets		(454	)		(340	)
Amortization		372,877			329,360
Debt discount		—			(308,621	)
Basis difference in acquired assets		(2,483,097	)		(2,826,919	)
Valuation allowance		(60,105,540	)		(43,132,111	)
Deferred tax asset (liability) non-current	$	—		$	—
Noncurrent asset (liabilities)		60,105,540			43,132,111
Valuation allowance		(60,105,540	)		(43,132,111	)
Deferred tax asset (liability) non-current	$	—		$	—