STOCKHOLDERS’ DEFICIT

12 Months Ended

May 31, 2022

Equity [Abstract]

STOCKHOLDERS’ DEFICIT

NOTE 9- STOCKHOLDERS’ DEFICIT

Share Based Compensation

Effective November 6, 2011, the holders of a majority of the shares of common stock approved the Plan to reserve 10,000,000 shares of common stock for issuance to eligible recipients. Effective December 2014, an additional 5,000,000 shares of common stock were reserved for issuance to eligible recipients under the Plan. Shares under the plan can be issued in the form of options, restricted stock, and other forms of equity securities. The Company’s board of directors has the discretion to set the amount and vesting period of award grants. As of May 31, 2022, 8,149,000 shares remain available for issuance under the Plan.

The fair value of stock options granted was calculated using the Black-Scholes option pricing model using the following weighted average assumptions during the year ended May 31,2022. There were no options granted in the year ended May 31, 2021.

	2022
Risk-free interest rate	1.85%
Expected dividend yield	0%
Expected volatility	314.9%
Expected life of options	6.0 years

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a bond with a similar term. The Company does not anticipate declaring dividends in the foreseeable future. Volatility is estimated based on the historical share prices over the same period as the expected life of the option. The Company uses the simplified method for determining the expected term of its stock options.

Stock Options

As of May 31, 2022 and 2021, there were 1,143,761 and 0 unvested and unrecognized shares. As of May 31, 2022, unrecognized compensation cost related to nonvested stock options amounted to $84,282 which is expected to be recognized over the next three years.

The following table summarizes information about options granted during the years ended May 31, 2022 and 2021:

	Number of Shares			Weighted Average Exercise Price
Balance, May 31, 2020		4,679,000		$	0.89
Options granted and assumed		-			-
Options expired		-			-
Options cancelled, forfeited		(379,000	)		0.38
Options exercised		-			-
Balance, May 31, 2021		4,300,000		$	0.94
Options granted and assumed		4,175,000			0.10
Options expired		(1,500,000	)		2.00
Options cancelled, forfeited		(1,700,000	)		0.36
Options exercised		-			-
Balance, May 31, 2022		5,275,000		$	0.16

All stock options are exercisable upon vesting.

As of May 31, 2022 and 2021, 5,275,000 and 4,300,000 options are outstanding at a weighted average exercise price of $0.16 and $0.94, respectively.

Restricted Stock

During fiscal years ending May 31, 2022 and 2021, no restricted stock has been granted and accordingly, no expense has been recorded for restricted stock. The Company granted 1.55 million shares of restricted stock, net of forfeitures during fiscal year 2014. As of May 31, 2022, all 1,550,000 granted shares have been issued.

Warrants

As of May 31, 2021, there were 5,374,501 warrants remaining to be exercised at a price of $0.70 per share to Sunrise Securities Corporation to satisfy the finders’ fee obligation associated with the Alleghany transaction. The warrants expired June 14, 2021.

No warrants are outstanding at May 31, 2022.