| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Basis of Presentation The Company prepares its consolidated financial
statements in accordance with accounting principles generally accepted in the United States (“US GAAP” or “GAAP”). Principles of Consolidation These consolidated financial statements include
those of the Company and its wholly owned subsidiaries: Schmitt Measurement Systems, Inc. and Ample Hills Acquisition, LLC. All significant
intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements. Use of Estimates The preparation of the consolidated financial
statements in conformity with US GAAP 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 consolidated financial statements and the reported
amounts of sales and expenses during the reporting period. Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that estimates made as of the date of the consolidated financial statements could
change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from those estimates.
Significant accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, revenue
recognition, estimates of impairment on long-lived assets, allowance for doubtful accounts, recognition and measurement of income tax
assets, valuation of stock-based compensation, the valuation of net assets acquired and the identification and measurements inherent in
the classification of certain components of our operations as discontinued operations. Reclassification Certain amounts in the prior period consolidated statement
of operations have been reclassified to conform to the presentation of the current period. These reclassifications had no effect on previously
recorded net loss. Segment Reporting The Company’s reportable segments are based
on the “management” approach, meaning they are based on the way management views the business, the internal reports it reviews
and the way it manages the business, assesses performance, and makes decisions. The chief operating decision maker reviews revenue, gross
margin and the operating performance of each reportable segment. The Company’s reportable segments during the years ended May 31,
2022 and 2021 were the Ice Cream Segment and Measurement Segment. Business Combinations The Company accounts for business combinations in
accordance with Accounting Standard Codification (“ASC”) 805 - Business Combinations Ample Hills Business
Acquisition Revenue Recognition The Company generates revenues from the following
sources: (i) retail restaurant sales, (ii) factory sales, (iii) measurement product sales, and (iv) remote tank monitoring services. Retail Restaurant Sales, net The Company's Ice Cream Segment generates revenues
from retail restaurant sales to its end-user customers at the time of sale, net of discounts, coupons, employee meals, and complimentary
meals and gift cards. Sales tax is collected from customers and remitted to governmental authorities and is presented on a net basis within
revenue in our Consolidated Statements of Operations. Factory Sales, net The Company’s Ice Cream Segment generates
revenues from sales of finished goods from its Brooklyn, New York factory, including wholesale, e-commerce, and direct-to-customer
sales. These revenues, net of sales tax paid to states, are recognized when control of the goods is transferred to the customer, in accordance
with the terms of the applicable agreement. The Company also generates revenues by providing manufacturing production services to third
parties and recognizes revenues as services are provided to the customer. Measurement Product Sales The Company’s Measurement Segment determines
the amount of revenue it recognizes associated with the transfer of each product. For sales of products to all customers, each transaction
is evaluated to determine whether there is approval and commitment from both the Company and the customer for the transaction; whether
the rights of each party are specifically identified; whether the transaction has commercial substance; whether collectability from the
customer is probable at the inception of the contract and whether the transaction amount is defined. If a transaction to sell products
meets all of the above criteria, revenue is recognized for the sales of product at the time of shipment. The Company incurs commissions associated with
the sales of certain measurement products. The Company applies the practical expedient allowed under ASC 340-40-25-4 by recognizing the
expense at the time the product is shipped. These amounts are recorded within general, administrative and sales expense. The Company also
incurs costs related to shipping and handling of its products, the costs of which are expensed as incurred as a component of cost of sales. Remote Tank Monitoring Services The Company's Measurement Segment revenues associated
with the Xact product line include satellite focused remote tank monitoring products and related monitoring services for markets in the
IoT environment. The Company determines the amount of revenue it
recognizes associated with the transfer of such services. For delivery of monitoring services to all customers, each transaction is evaluated
to determine whether there is approval and commitment from both the Company and the customer for the transaction; whether the rights of
each party are specifically identified; whether the transaction has commercial substance; whether collectability from the customer is
probable at the inception of the contract and whether the transaction amount is defined. If a transaction to provide monitoring services
meets all of the above criteria, revenue is recognized at the completion of the month in which monitoring services are provided. Customer Deposits and Prepayments The Company defers revenue recognition of revenues
in instances where consideration is received from customers in advance of the Company completing its obligations in exchange for such
consideration. As of the fiscal years ended May 31, 2022 and 2021, significant contract balances were as follows:
Fiscal Year Ended May 31,
2022 2021
Contract liabilities:
Customer deposits, current $ 68,199 $ 55,464
Gift card liabilities, current 48,110 37,900
Total customer deposits and prepayments $ 116,309 $ 93,364 Commission costs are calculated as a percentage
of sales for Acuity sales within the Measurement Segment and paid to both internal and external sales representatives. The Company accrues
for the commission expense at the time of sale and pays the commission to the sales representative once customer payment is collected.
These amounts are recorded within general, administrative and sales expense. Cash and Cash Equivalents The Company generally invests its excess cash
in money market funds. The Company's investment policy also allows for cash to be invested in investment grade highly liquid securities,
and the Company considers securities that are highly liquid, readily convertible into cash and have original maturities of less than three
months when purchased to be cash equivalents. The Company's cash consists of demand deposits in large financial institutions and money
market funds. At times, balances may exceed federally insured limits. As of May 31, 2022 and May 31, 2021, the Company had cash
and cash equivalents of $ 1,050,910 4,032,690 Accounts Receivable, net Accounts
receivable rise from granting credit to customers in the normal course
of business, are unsecured and are presented net of an allowance for doubtful accounts. The Company maintains credit limits for
all customers based on several factors, including but not limited to financial condition and stability, payment history, published credit
reports and use of credit references. Management performs various analyses to evaluate accounts receivable balances to ensure recorded
amounts reflect estimated net realizable value. This review includes using accounts receivable aging reports, other operating trends and
relevant business conditions, including general economic factors, as they relate to each of the Company's domestic and international customers.
In the event there is doubt about whether a customer account is collectible, a reserve is recorded. If these analyses lead management
to the conclusion that a customer account is uncollectible, the balance will be directly charged to bad debt expense. Inventories, net Inventories are valued at the lower of cost or
net realizable value with cost determined on the average cost basis. Costs included in inventories consist of materials, labor and manufacturing
overhead, which are related to the purchase or production of inventories. Write-downs, when required, are made to reduce excess inventories
to their net realizable values. Such estimates are based on assumptions regarding future demand and market conditions. If actual conditions
become less favorable than the assumptions used, an additional inventory write-down may be required. Property and Equipment, net Property and equipment are stated at cost
less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives of three seven three Property and Equipment Held for Sale, net Property and equipment held for sale are stated
at the lower of cost less depreciation or expected net realizable value. Depreciation is computed using the straight-line method over
estimated useful lives of 25 The Company owned a two story 35,050 2 5,100,000 4,753,724 4,598,095 Leases The Company owns two industrial office buildings
totaling 11,667 Leases As of the fiscal years ended May 31, 2022 and
2021, property and equipment held for sale consisted of the following: Summary of Significant Accounting Policies -
Schedule of Assets Held for Sale Assets Held for Sale
Fiscal Year Ended May 31,
2022 2021
Land $ 159,000 $ 140,000
Buildings and improvements 1,616,250 246,135
Total assets hold for sale 1,775,250 386,135
Less accumulated depreciation (1,341,840 ) (211,288 )
Property and equipment, net $ 433,410 $ 174,847 On July 15, 2022, subsequent to the Company’s
fiscal year end, the Company executed the sale and leaseback of these assets. See further discussion in Note 20 – Subsequent
Events Leases On June 1, 2019, the Company adopted ASC
842, Leases To determine whether a contract is or contains
a lease, the Company determines at contract inception whether it conveys the right to control the use of an identified asset for a period
of time in exchange for consideration. If the contract provides for the right to obtain substantially all of the economic benefit from,
and direct the use of, the leased asset, the Company recognizes a right-of-use asset and lease liability upon contract inception. The
initial carrying value of the operating lease liability is determined by calculating the present value of future lease payments under
the contract. The Company considers the future lease payments under the original terms of the contract, along with explicitly enumerated
renewal periods where management is reasonably certain that such renewal options will be exercised. In order to calculate the right-of-use asset and
lease liability for an operating lease, ASC 842 requires that a lessee apply a discount rate equal to the rate implicit in a lease whenever
such a rate is readily determinable. The Company’s lease agreements do not provide a readily determinable implicit rate, nor is
this rate available from our leasing counterparties. Consequently, the Company estimates an incremental borrowing rate to determine the
present value of the lease payments. This incremental borrowing rate represents the Company’s estimate of an interest rate that
the Company would be able to obtain from a lender to borrow, on a collateralized basis, over a similar term to obtain an asset of similar
value. Intangible Assets Definite-lived and indefinite-lived intangible
assets arising from business combinations include patented technology, proprietary recipes, websites and trademarks and trade names. Definite-lived
intangible assets are amortized over the estimated period during which the asset is expected to contribute directly or indirectly to future
cash flows. Intangible assets that are considered to be indefinite-lived are not amortized. Long-lived assets and certain identifiable intangible
assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of
such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting
from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets and certain identifiable
intangible assets that management expects to hold, and use is based on the amount by which the carrying value exceeds the fair value of
the asset. Advertising Costs Advertising costs included in general, administrative
and sales, are expensed when the advertising first takes place. Advertising expense was $ 38,628 63,635 Research and Development Costs Research and development costs, predominately
internal labor costs and costs of materials, are charged to expense when incurred. Shipping and Handling The Company incurs costs related to shipping and
handling of its manufactured products. These costs are expensed as incurred as a component of cost of sales. Shipping and handling charges
related to the receipt of raw materials are also incurred, which are recorded as a cost of the related inventory. Warranty Reserve Warranty costs are estimated and charged to operations
to cover a defined warranty period. The estimated warranty cost is based on the history of warranty claims for each particular product
type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product
types. The warranty reserve accruals, included in other accrued liabilities, are reviewed periodically and updated based on warranty trends. Stock-Based Compensation Stock-based compensation includes expense charges
for all stock-based awards to employees and directors granted under the Company's stock option plan. The Company requires the measurement
and recognition of compensation for all stock-based awards made to employees and directors including stock options based on estimated
fair values. Stock-based compensation recognized during the
period is based on the value of the portion of the stock-based award that will vest during the period, adjusted for expected forfeitures.
Compensation cost for all stock-based awards is recognized using the straight-line method. Restricted Stock Units Service-based restricted stock units (“RSUs”)
are granted to key employees and members of the Company's Board of Directors. Service-based RSUs generally fully vest on the first anniversary
date of the award. Income Taxes The Company accounts for income taxes using the
asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Deferred tax assets are
reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Management continues to review the level of the valuation allowance on a quarterly basis.
There can be no assurance that the Company’s future operations will produce sufficient earnings to allow for the deferred tax asset
to be fully utilized. The Company currently maintains a full valuation allowance against net deferred tax assets. The Company applies the asset and liability method
in recording income taxes, under which deferred income tax assets and liabilities are determined, based on the differences between the
financial reporting and tax bases of assets and liabilities and are measured using currently enacted tax rates and laws. Additionally,
deferred tax assets are evaluated and a valuation allowance is established if it is more likely than not that all or a portion of the
deferred tax asset will not be realized. Management continues to review the level of the valuation allowance on a quarterly basis. Each year the Company files income tax
returns in the various taxing jurisdictions in which it operates. These tax returns are subject to examination and possible
challenge by the taxing authorities. Positions challenged by the taxing authorities may be settled or appealed by the Company. As a
result, there is an uncertainty in income taxes recognized in the Company's consolidated financial statements in accordance with ASC
740. The Company applies this guidance by defining criteria that an individual income tax position must meet for any part of the
benefit of that position to be recognized in an enterprise's financial statements and provides guidance on measurement,
de-recognition, classification, accounting for interest and penalties, accounting in interim periods, disclosure, and
transition. Earnings (Loss) Per Share Pursuant to ASC 260, Earnings Per Share Diluted net loss per share is based on the weighted
average number of shares outstanding during the periods plus the effect, if any, of the potential exercise or conversion of securities,
such as warrants and restricted stock units that would cause the issuance of additional shares of common stock. In computing the basic
and diluted net loss per share applicable to common stockholders during the periods listed in the consolidated statements of operations,
the weighted average number of shares are the same for both basic and diluted net loss per share due to the fact that when a net loss
exists, dilutive shares are not included in the calculation as the impact is anti-dilutive. An anti-dilutive impact is an increase in
earnings per share or a decrease in net loss per share that would result from the conversion, exercise, or issuance of certain contingent
securities. Concentration of Credit Risk Financial instruments, which potentially subject the
Company to concentrations of credit risk, consist primarily of cash and accounts receivable. Cash held by the Company, in financial institutions,
regularly exceeds the federally insured limit of $250,000. With respect to continuing operations, the Company is not dependent on
any one or a few major customers. See further information in Note 18 – Customer Concentration Fair Value of Financial Instruments Fair value is the price that would be received
from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When
determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers
the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use
when pricing the asset or liability. ASC 820, Fair Value Measurements and Disclosures
· Level 1 — inputs are based upon unadjusted
quoted prices for identical assets or liabilities traded in active markets.
· Level 2 — inputs are based upon quoted
prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be
corroborated by observable market data for substantially the full term of the assets or liabilities.
· Level 3 — inputs are generally unobservable
and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.
The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models,
and similar techniques. Assets measured at fair value on a non-recurring
basis include tangible and intangible assets. Such assets are reviewed annually for impairment indicators. If a triggering event has occurred,
the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value
measurements, in such instances, are based on significant unobservable inputs (Level 3). The carrying amounts of the Company’s financial
instruments, which include accounts receivables, customer deposits, accounts payable and accrued expenses, approximate their fair values,
principally due to their short-term nature, maturities or nature of interest rates. Recently Issued Accounting Pronouncements In May 2021, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260),
Debt-Modifications and Extinguishments Compensation-Stock Compensation Derivatives and
Hedging-Contracts in Entity’s Own Equity In June 2016, the FASB issued ASU 2016-13, Financial
Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
