Stockholders’ Equity

6 Months Ended

Nov. 30, 2022

Equity [Abstract]

Stockholders’ Equity

Note 9 – Stockholders’ Equity

Shares Authorized

On June 13, 2022, the Company amended its amended and restated certificate of incorporation to increase the number of authorized common stock, par value $0.0001 common stock per share, from 100,000,000 to 450,000,000 and to increase the number of authorized preferred stock, par value $0.0001 per share, from 20,000,000 to 300,000,000. On November 30, 2022, the authorized capital of the Company consisted of 450,000,000 shares of common stock, par value $0.0001 per share and 300,000,000 shares of preferred stock, par value $0.0001 per share.

Preferred Stock

The preferred stock may be issued from time to time in one or more series. The Board of Directors of the Company is expressly authorized to provide for the issuance of all or any of the shares of the preferred stock in one or more series, and to fix the number of shares and to determine or alter, for each such series, such voting powers, full or limited, or no voting powers and such designations, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed until the resolution adopted by the Board of Directors providing the issuance of such shares. The Board of Directors is also expressly authorized to increase or decrease the number of shares of any series subsequent to the issue of shares of that series. In case the number of shares of any such series shall be so decreased, the decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

During the six months ended November 30, 2022, the Company issued 250,000,000 shares of non-voting Series A Preferred Stock, which are convertible into shares of Company common stock on a one-to-one ratio, pursuant to the Asset Purchase Agreement (See Note 12). These 250,000,000 shares were valued at the fair market value of $3,100,000. The holders of shares of Series A Preferred Stock shall have no rights to dividends with respect to such shares. No dividends or other distributions shall be declared or paid on the Common Stock unless and until dividends at the same rate shall have been paid or declared and set apart upon the Series A Preferred Stock, based upon the number of shares of Common Stock into which the Series A Preferred Stock may then be converted. Upon the dissolution, liquidation, or winding up of the Company, whether voluntary or involuntary, the holders of the Series A Preferred Stock are entitled to receive out of the assets of the Company the sum of $0.0001 per share before any payment or distribution shall be made on our shares of Common Stock. The Series A Preferred Stock shall not be subject to redemption at the option, election or request of the Corporation or any holder or holders of the Series A Preferred Stock. Each share of Series A Preferred Stock is convertible at the option of the holder thereof, at any time after the second anniversary of the date of the first issuance of the shares of Series A Preferred Stock into one fully paid and nonassessable share of Common Stock provided, however, that the holder may not convert that number of shares of Series A Preferred Stock which would cause the holder to become the beneficial owner of more than 5% of the Corporation’s Common Stock as determined in accordance with Sections 13(d) and (g) of the Securities and Exchange Act of 1934 and the applicable rules and regulations thereunder.

As of November 30, 2022, 250,000,000 shares of preferred stock were issued and outstanding.

No shares of preferred stock were issued and outstanding as of May 31, 2022.

Common Stock

As of November 30, 2022, 116,556,165 shares of common stock were issued and outstanding. 

During the six months ended November 30, 2022, the Company issued 73,183,893 shares of common stock, valued at $907,480, as consideration pursuant to the Asset Purchase agreement (See Note 12).

During the six months ended November 30, 2022, the Company sold 1,426,391 shares of common stock at $0.23 per share for a total of $328,050, under several private placement agreements.

No shares of common stock were issued during the six months period ended November 30, 2021.

Stock Options

The Board of Directors approved the Company’s 2022 Equity Incentive Plan (the “Plan”) on March 21, 2022. Under the Plan, equity-based awards may be made to employees, officers, directors, non-employee directors and consultants of the Company and its Affiliates (as defined in the Plan) in the form of (i) Incentive Stock Options (to eligible employees only); (ii) Nonqualified Stock Options; (iii) Restricted Stock; (iv) Stock Awards; (v) Performance Shares; or (vi) any combination of the foregoing. The Plan will terminate upon the close of business on the day next preceding March 21, 2032, unless terminated earlier in accordance with the terms of the Plan. The Board serves as the Plan administrator and may amend or terminate the Plan without stockholder approval, subject to certain exceptions.

Pursuant to the Plan, on May 10, 2022, the Company issued to two Company officers non-statutory stock options to purchase, in the aggregate, up to 5,300,000 shares of its Common Stock, at an exercise price of $0.09 per share and expiring on April 20, 2032. The options vest over time with 25% of the options vesting on September 1, 2022 and thereafter vesting 1/24^th on the 1^st of every month. 1,656,250 options were vested as of November 30, 2022. The Company computed the aggregate grant date fair value of $477,000 using the black-scholes option pricing model, which is being recorded as stock-based compensation expense over the vesting period.

Pursuant to the Plan, on November 1, 2022, the Company issued non-statutory stock options, to an officer of the Company, to purchase, in the aggregate, up to 300,000 shares of its Common Stock, at an exercise price of $0.20 per share and expiring on October 31, 2032. The options vest over time with 25% of the options vesting on January 30, 2023 and thereafter vesting 1/33^rd on the 1^st of every month. None of these options were vested as of November 30, 2022. The Company computed the aggregate grant date fair value of $60,090 using the black-scholes option pricing model, which is being recorded as stock-based compensation expense over the vesting period.

During the three months ended November 30, 2022 and 2021, the Company recorded a stock-based compensation expense of $26,862 and $0, respectively, for these options, in the accompanying consolidated financial statements. During the six months ended November 30, 2022 and 2021, the Company recorded a stock-based compensation expense of $124,145 and $0, respectively, for these options, in the accompanying consolidated financial statements.

The following table summarizes the activity relating to the Company’s stock options held by Officers:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Term
Outstanding at June 1, 2022		5,300,000		$	0.09		9.42
Granted		300,000			0.20		9.93
Exercised		-			-		-
Outstanding at November 30, 2022		5,600,000		$	0.10		9.45
Less: Unvested at November 30, 2022		(3,943,750	)		0.10		9.46
Vested at November 30, 2022		1,656,250		$	0.09		9.42