Applied Blockchain, Inc. (the “Company,” “we,” “our” or “us”) operates co-hosting facilities that are designed to provide massive computing power in which our customers lease space and access to electricity primarily designed to mine cryptoassets. The accompanying notes are an integral partCompany has a colocation business model where customers place hardware they own into the Company’s facilities and the Company provides full operational and maintenance services for a fixed fee. The Company typically enters into long term fixed rate contracts with our customers.

In the third quarter of the fiscal year ended May 31, 2022, the Company approved plans to sell all crypto mining equipment and cease all crypto mining operations. The results of these operations, financial position, and cash flows have been presented as discontinued operations and the related assets and liabilities have been classified as held-for-sale. Refer to Note 14 – Discontinued Operations for additional information, including accounting policies, about the Company’s discontinued operations.

The consolidated financial statements

FLIGHT SAFETY TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTHS ENDED
(unaudited)

			February 28, 2009		February 29, 2008
Cash flows from operating activities:
	Net loss to common shareholders		$ (1,241,830)		$ (2,440,633)
		Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization		131,131		81,750
	Share-based compensation		34,947		142,224
	Gain on disposition of assets		(18,393)		-
	Common stock issued pursuant to legal settlement		-		185,000
	Changes in operating assets and liabilities:
	Customer and other receivables		(330,952)		10,897
	Inventory		(65,614)		-
	Accrued dividends		31,663		-
	Other current assets		120,213		95,596
	Accounts payable and accrued expenses		(34,318)		(23,830)
	Net cash used in operating activities		(1,373,153)		(1,948,996)
Cash flows from investing activities:
	Purchase of furniture and equipment		(22,050)		-
	Proceeds from sale of investment securities		125,000		550,000
	Proceeds from sale of assets		22,025		-
	Cash of business acquired		493,581		-
	Payments for patents and trademarks		(95,000)		(54,854)
	Net cash provided by investing activities		523,556		495,146
Cash flows from financing activities:
	Repayment of debt		(49,173)		-
	Sale of preferred stock, net of notes receivable issuance		410,667		-
	Net cash provided by financing activities		361,494		-
Net decrease in cash and cash equivalents			(488,103)		(1,453,850)
Cash and cash equivalents at beginning of period			877,899		2,439,911
Cash and cash equivalents at end of period			$ 389,796		$ 986,061
Supplemental non-cash disclosures:
	Issuance of common stock for purchase of furniture and equipment and license fee		$ 350,000		$ -
	Issuance of preferred stock for acquired business		2,000,000		-
	Issuance of notes payable to finance prepaid expenses		89,477		-
	Issuance of notes receivable in exchange for preferred tock		82,333		- -
	Proceeds on asset sale offset by amounts due		-		9,735

are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The accompanying notes are an integral part of these consolidated financial statements

FLIGHT SAFETY TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE NINE-MONTHS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008

		Series A Convertible Preferred Stock			Common Stock		Additional Paid-in Capital	Treasury Stock	Accumulated Deficit	Stockholders' Equity
		Shares	Amount	Notes Receivable	Shares	Amount
Balance   May 31, 2007				- -	8,331,510	$8,332	$13,125,455	$(165,463)	$(9,341,826)	$3,626,498
	Issuance of treasury stock						11,942	103,092		115,034
	Common stock issued				100,000	100	184,900			185,000
	Share-based compensation						27,190			27,190
	Net loss								(2,440,633)	(2,440,633)
Balance   February 29, 2008				- -	8,431,510	$8,432	$13,349,487	$ (62,371)	$(11,782,459)	$1,513,089
Balance   May 31, 2008		- -	- -	- -	8,431,510	$8,432	$13,470,027	$ (62,371)	$(12,628,125)	$ 787,963
	Share-based compensation						34,947			34,947
	Issuance of stock				549,853	549	349,451			350,000
	Sale of preferred stock	4,400	$ 440,000	$ (82,333)						357,667
	Note payments			53,000						53,000
	Acquisition of CFP	20,000	2,000,000							2,000,000
	Net loss								(1,210,167)	(1,210,167)
	Dividend on preferred stock								(31,663)	(31,663)
Balance   February 28, 2009		24,400	$2,440,000	$ (29,333)	8,981,363	$8,981	$13,854,425	$ (62,371)	$(13,869,955)	$ 2,341,747

The accompanying notes are an integral part of these consolidated financial statements

FLIGHT SAFETY TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
FEBRUARY 28, 2009 AND FEBRUARY 29, 2008
(Unaudited)

Note 1. Basis of Presentation

The interim consolidated financial statementsthe Company include the accounts of Flight Safety Technologies, Inc. and it's newly formed wholly-owned subsidiary Advanced Plasma Products, Inc. ("APP") and as of January 1, 2009, its recently acquired wholly-owned subsidiary Cummins Family Produce, Inc. ("CFP").

On August 7, 2008, the Company executed a letter of intent with the University of Tennessee Research Foundation (UTRF) for the licensing of patent rights related to atmospheric glow plasma technology. The agreement provides for exclusive worldwide rights to commercialize the technology in all but a few fields of use. The letter of intent provides for an initial license fee of $150,000 payable in shares of common stock of the Company and minimum annual royalty payments starting in year two. Additionally, in a related transaction, on August 28, 2008, Advanced Plasma Products, Inc. purchased the assets of Atmospheric Glow Technologies, Inc., the previous licensee of this technologyits wholly owned and a company in bankruptcy. These assetscontrolled subsidiaries. Consolidated subsidiaries results are included essential instrument prototypes, engineering drawings, test equipment and a variety of facility related assets. We paid $125,000 in cash and issued 289,436 shares of our common stock valued at $200,000. On September 10, 2008,we concluded our agreement w ith UTRF and subsequently issued 260,417 shares of our common stock as payment for the license fee.

As of January 1, 2009, we acquired 100% of the outstanding stock of Cummins Family Produce, Inc., a potato packing business located in Idaho. The consideration we provided is the assumption of a bank promissory note in the amount of approximately $204,000 and 20,000 shares Preferred Stock (see note 10) valued at $2 million. Under a performance based earn-out provision, we are obligated to issue an additional number of shares of Preferred Stock, such that the total purchase price is equal to 4.25 times the yearly average earnings before interest, taxes, depreciation and amortization calculated over the next two years, less the value of the bank promissory note assumed. Immediately prior to this transaction, CFP executed (a) a 5-year supply agreement with its primary growers who will provide their entire potato harvest to the packing facility and (b) a 5-year lease agreement whereby CFP will lease the packing facility and equipment from the prior owners. We believe that both agreements ref lect current pricingdate the subsidiary was formed or acquired. Noncontrolling interests in consolidated subsidiaries in the industry. We have no rights to renew these agreements. See Notes 10 and 11 to our consolidated financial statements for a more detailed explanationrepresent non-controlling stockholders' proportionate share of thesethe operations in such subsidiaries. Intercompany investments, balances and transactions and for related party information.

These interim financial statements for the three and nine-months ended February 28, 2009 and February 28, 2008, included herein, have been prepared, without audit, pursuant toeliminated in the rules and regulationsconsolidated financial statements. The Company’s consolidated operating subsidiaries include wholly-owned Shanghai Sparkly Ore Technology, Applied Blockchain, Ltd., APLD-JTND Phase II, LLC, APLD-Rattlesnake Den I LLC, APLD-Rattlesnake Den II LLC, APLD Hosting, LLC, Applied Talent Resources LLC, as well the Company’s majority interest in 1.21 Gigawatts, LLC.

The preparation of the SEC. Results for the periods presented are not necessarily indicative of results for the entire year. In the opinion of management, all adjustments, consisting of normal recurring adjustments, which are necessary for a fair statement of operating results for the interim periods have been made. These financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with our financial statements and related footnotes for the years ended May 31, 2008 and 2007 which are included in our annual report on Form 10-KSB filed on August 29, 2008.

Certain reclassifications have been made to prior interim period balances in order to conform to the current year's presentation.

Note 2.Going Concern and Liquidity

The report of our independent registered public accountant issued in conjunction with our audited financial statements and notes thereto for the year-ended May 31, 2008 indicated that there is substantial doubt about our ability to continue as a going concern.

The Company has had recurring losses from operations that have diminished its financial resources. Our liquidity to date has primarily been provided by revenue from government contracts and proceeds from the sale of our equity securities. We have not been successful in securing any additional government funding and we will have to rely on the sale of our equity securities to generate sufficient working capital in order to successfully commercialize our newly acquired technology and to pay for our ongoing operations. As a result of the lack of government funding for our aviation security technologies, we have suspended all related research and develop work. On January 14, 2009, we completed a series of transactions in order to generate recurring cash flow and working capital. See Notes 9 and 10 of Notes to Consolidated Financial Statements for a full description of the transactions. However, we anticipate that by the end of April 2009, we will need to secure additional working capital financing, until product revenues and cash flow from CFP create a sustainable operation, of which there can be no assurance. However, we cannot predict or estimate the timing or amount of our working capital needs with certainty as the timing and amounts will depend on many variables, such as potential third party development or licensing fees, the pace and success of our product development and sales, and cash generated by the transaction described in Note 10.In the event we are unable to secure additional working capital as and when we need it, we will have to curtail our operations accordingly, thus slowing down our product development and marketing efforts. Any curtailment of our operations could have a material adverse effect on our operations and financial position.

On September 29, 2008, we were delisted from the American Stock Exchange for failure to maintain the required listing standards. We are currently trading on the over-the-counter market under the symbol "FLTS".

Note 3. Summary of Significant Accounting Policies

Use of Estimates In preparingconsolidated financial statements in conformity with generally accepted accounting principles,GAAP requires management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities asand disclosure of contingent assets and liabilities at the date of the balance sheet date and the reported amounts of revenue and expenses during the reporting period. Material estimates that are particularly susceptible to significant change in the near term relate to the carrying values of receivables, inventory, intangible assets, and the calculation of share-based compensation.periods. Actual results could differ significantly from those estimates.

Share-Based Compensation:Effective June 1, 2006, The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates associated with asset valuations, and the valuation allowance associated with the Company’s deferred tax assets.

The Company adoptedrecognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The core principle of the provisionsrevenue standard is that a company should recognize revenue to depict the transfer of Statement of Financial Accounting Standards (SFAS) No. 123, "Share-Based Payments (revised 2004)," (SFAS No. 123R)promised goods or services to customers in an amount that reflects the consideration to which requires the Companycompany expects to measure the cost of employee services receivedbe entitled to in exchange for an awardthose goods or services. The following five steps are applied to achieve that core principle:

To identify the performance obligations in a contract with a customer, the Company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of equity instruments based on the grant date fair valuea “distinct” good or service (or bundle of goods or services) if both of the award. That costfollowing criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is recognized overcapable of being distinct), and the period duringentity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

The transaction price is the amount of consideration to which an employee is requiredentity expects to provide servicesbe entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the award,transaction price, an entity must consider the requisite service period (usuallyeffects of all the vesting period). Under SFAS No. 123R,following:

Variable consideration is estimated as of the grant date using the Black-Scholes option pricing model. There were no options granted in each of the nine-months ended February 28, 2009 and February 29, 2008, respectively.

Loss Per Share:Basic loss per share is computed by dividing net loss to common shareholders by the weighted average number of shares of common stock outstanding during the period. For the interim periods presented the effect of stock options, warrants and convertible preferred stock was anti-dilutive; therefore, they were not included in the computationtransaction price only to the extent that it is probable that a significant reversal in the amount of diluted loss per share.cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The numbertransaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company considers all highly liquid investments with maturitiesan original maturity of three months or less at the date of purchaseacquisition to be cash and cash equivalents.

Revenue and Cost Recognition:Our prior contracts with the United States government and our maritime industry customers are cost-reimbursable contracts that provide for a fixed profit percentage (base fee) applied to our actual costs to complete the work. These contracts are subject to audit and adjustment by our customer, and are subject to cost limitations as provided by the contract and the Federal Acquisition Regulations. The government has audited and accepted our rates through our fiscal year ended May 31, 2006.

For these contracts, revenue is recorded at the time services are performed based upon actual project costs incurred including a reimbursement for general, administrative, and overhead costs and the base fee. The general, administrative, and overhead costs are estimated periodically in accordance with government contract accounting regulations and may change based on actual costs incurred subject to approval. Revenue may be adjusted for our estimate

The Company recognizes revenueaccounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in accordance with the provision of the Securities and Exchange Commission Staff Accounting Bulletin ("SAB") No. 104 which establishes guidance in applying generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to revenue recognitionvaluation techniques used to measure fair value into three levels as follows:

Level 1 — Unadjusted quoted prices in financial statements. SAB No. 104 requiresactive markets for identical assets or liabilities;

Level 2 — Inputs other than quoted prices that four basic criteria mustare observable for the asset or liability, either directly or indirectly; and

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be met before revenue can be recognized: (1) persuasive evidenceclassified using the lowest level of an arrangement exists; (2) delivery has occurred or services rendered; (3) the priceinput that is significant to the buyer is fixedfair value measurement. Such determination requires significant management judgment. As of February 28, 2022 there were no financial assets or determinable;liabilities measured at fair value.

Property and equipment are stated at original cost or fair value at the date of acquisition in the case of CFP and Advanced Plasma Products, Inc. less accumulated depreciation. Depreciation is computed using the straight-line method. Cost and accumulated depreciationmethod over the estimated useful lives of assets retired or disposed of are removed from the accounts. Gains and losses are recognized upon disposal of assets. The cost of maintenance and repairs is charged to operations as incurred, whereas significant repairs are capitalized.

Estimated useful lives by asset class are as follows:

Machinery & equipment          7-10 years
Furniture & fixtures                 10 years
Automobiles                             5 years
Software

determined to exist, the term of patent costs associated with, AWSM, TIICM™ and atmospheric glow technologies andsuch lease is assessed based on the valuedate on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the supply contract between CFP and certain growers. Acquisition costs related to obtaining new patents are capitalized. Patent costs are being amortized usinglease term reflects the straight-line method over the lesser of seventeen years from the date incurred or the remaining lifenon-cancelable term of the underlying patent. The supply contract is being amortized over its five-year term.

In accordance with Statementlease, inclusive of Financial Accounting Standards No. 144, "Accounting for Impairment any rent-free periods and/or Disposal of Long-Lived Assets" (SFAS 144)periods covered by early-termination options which the Company assesses its intangible assets for impairment whenever events or changes in circumstances indicate their carrying value mayis reasonably certain of not be recoverable. Such circumstances may include a significant adverse change in legal factors orexercising, as well as periods covered by renewal options which the business climate that could affect the valueCompany is reasonably certain of the intangible assets.exercising. The Company also considersdetermines lease classification as either operating or finance at lease commencement, which governs the likelihoodpattern of obtaining required researchexpense recognition and development fundingthe presentation reflected in relationthe consolidated statements of operations over the lease term.

For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding right-of-use (“ROU”) asset equal to patent valuation. In determining recoverability,the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company must determineuses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the asset's fair value, which may require Managementrate it would pay to make significant assumptions aboutborrow and incorporates the future cash generating abilityterm and economic environment of the asset. Ifassociated lease.

For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s consolidated balance sheet as an asset is determinedaccounting policy election. Leases qualifying for the short-term lease exception were insignificant. Variable lease costs are recognized as incurred.

ASC Topic 740, Income Taxes, (“ASC 740”), also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be impaired,taken in a tax return. The benefit of a tax position is recognized in the difference between the asset's fair value and book value is charged to expensefinancial statements in the period the impairment is identified. After an impairment loss is recognized, the adjus ted carrying amount of the intangible asset becomes its new basis. Subsequent reversal of a previously recognized impairment loss is prohibited under SFAS 144.

Concentration of Credit Risk: The Company had amounts in excess of $250,000 in a single bank during the year. Amounts over $250,000 are not covered by the Federal Deposit Insurance Corporation. Concentration of credit risk also exists with respect to investment securities and contract receivables. The concentrated risk associated with contract receivables is mitigated by the fact that these receivables are due primarily from the United States Government. The risk for investment securities is mitigated by an Investment Policy which approved by the Board of Directors, restricts investing in fixed income securities below an "A" rating at the time of purchase and investments in asset backed securities, mortgage backed securities and collateralized mortgage obligations below a "AAA" rating at the time of purchase.

Research and Development:Company sponsored research and development costs, including proposal costs and un-reimbursed expenditures for developmental activities, are charged to operations as incurred.

Income Taxes:The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is providedbased on deferred tax assets whenall available evidence, management believes it is more likely than not that some portionthe position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the assets will not be realized. Deferred tax assetschange to its consolidated financial statements and liabilitiesassures that there are measured using enactedproper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change.

As part of the Company's presentation of discontinued operations, the Company establishedreclassified approximately $7.2 million of gross assets and $690 thousand of accumulated depreciation into current assets of discontinued operations. The Company also recognized a Retirement Savings Plan (the "Plan") under$3.3 million loss to measure the provisionscurrent assets of Section 401(k) ofdiscontinued operations at fair value less cost to sell in accordance with ASC 360-10-45-13. This loss has been presented within loss from discontinued operations.

The following table presents a reconciliation of the statutory tax rate to the employee's contributioneffective tax rate for the nine month periods ended February 28, 2022 and 2021.

As of 5%February 28, 2022, 676,086 shares of gross pay. Series C Preferred Stock are outstanding. The shares of Series C Preferred Stock are convertible into shares of Common Stock. These shares were offered and sold to certain “accredited investors” in a private placement without registration of the shares under Rule 506 of the Securities Act and the rules and regulations promulgated thereunder.

The Company matching funds immediately vest 100%is required to reserve and keep available shares of Common Stock out of authorized and unissued shares of common stock for the sole purpose of issuance upon conversion of the Series C Preferred Stock, free from preemptive rights or any other actual contingent purchase rights. Each holder of shares of Series C Preferred Stock is entitled to convert any portion of the outstanding Series C Preferred Stock and any PIK Dividends held by such holder, without the payment of additional consideration, into such number of fully paid and non-assessable shares of Common Stock.

On January 18, 2022, the Company issued (i) an aggregate of 600,000 shares of restricted stock, consisting of 100,000 shares to each of its non-employee directors and (ii) an aggregate of 766,666 shares of restricted stock to three executives, in all cases as compensatory grants for services rendered to the Board or the Company. Each of the awards vests upon the completion of service conditions for specified times and a performance condition for the occurrence of an effective registration statement with the Securities and Exchange Commission (the “SEC”). The Company discontinued its match in September 2008.

Recent Accounting Pronouncements:Fair Valueswill recognize the cost of Assets and Liabilities:The Company adopted Statement of Financial Accounting Standards No. 157 ("SFAS 157"),Fair Value Measurements, which provides a framework for measuring fair value under generally accepted accounting principles. This Statement became effective for the Company on June 1, 2008 and did not have a material impact on the Company's consolidated financial statements. The Company also adopted SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115. SFAS 159 allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis. The Company did not elect fair value treatment for any financial assets or liabilities upon adoption. SFAS 159 also became effective for the Company on June 1, 2008 and did not have a mate rial impact on the Company's consolidated financial statements.

In accordance with SFAS 157, the Company groups its financial assets and financial liabilities measured at fair value in three levels,these RSUs based on the markets in which the assets and liabilities are traded and the reliabilitygrant date fair value of the assumptions usedawards over the related vesting terms using a straight-line method when it is probable that the performance condition of an effective registration statement will be met. The fair value of these RSUs was estimated to determinebe $11.0 million.

On January 14, 2022, the Company granted an aggregate of 1,791,666 restricted stock units (“RSUs”) to three consultants, in all cases as compensatory grants for consulting services rendered to the Company which contain performance conditions that affect vesting. The performance conditions specify that the RSUs are achieved based on specific thresholds of power to become available in the Company’s colocation hosting facility and also upon the occurrence of an effective registration statement with the SEC. The Company will recognize the cost of these RSUs based on the grant date fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full termvalue of the assets or liabilities. For example, Level 2 assetsawards when it is probable that the performance conditions will be achieved over the related vesting terms, which is expected to result in expense recognition for the years ended May 31, 2022 and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments or mortgage loans held for sale, for which theMay 31, 2023. The fair value is based on whatof these RSUs was estimated to be $14.4 million.

The fair value of the securitization market is currently offering for mortgage loans with similar characteristics.

Level3 - Unobservable inputs that are supportedshares of common stock underlying equity compensation has been determined by little or no market activity and that are significantusing a third-party valuation specialist to assist management in its determination. Management determines the fair value of the assets or liabilities. Level 3 assetsCompany’s Common Stock by considering a number of objective and liabilities includesubjective factors including: the valuation of comparable companies, sales of redeemable convertible preferred stock to unrelated third parties, the Company’s operating and financial instruments whoseperformance, and general and industry specific economic outlook, amongst other factors.

The Company estimated the fair value is determinedof the Common Stock at issuance date using pricing models, discounted cash flow methodologies, or similar techniques, as well as instrumentsa Probability Weighted Expected Return Method (“PWERM”). The PWERM estimated the fair value assuming two possible outcomes, for which the determination of fair value requires significant management judgment or estimation.

Also, the Company may be required, from timeeach discrete outcome is probability weighted to time, to measure certain other financial assets onarrive at a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets.weighted-average value. The Company had no such adjustmentsweighted two different scenarios as follow:

As the performance condition of an effective registration statement has not been met as of February 28, 2009.

At May 31, 20082022, no expense has been recognized for the investment consisted of an auction market preferred security, valued using Level 2 methodology.

Note 4: Customer Receivables

Customer receivables consistedthree and nine months ended February 28, 2022.

In March 2021, the Company entered into service agreements collectively with GMR Limited, Xsquared Holding Limited (“SparkPool”), and Valuefinder to provide cryptocurrency mining management, equipment, and other services to assist with the mining operation of the following at:

	February 28, 2009	May 31, 2008
Contract receivables-billed	$ 45,913	$ 64,396
Contract receivable-unbilled	-	30,460
Customer receivables	1,029,415	-
	$ 1,075,328	$ 94,856

The amount classified as other receivablesCompany during 2021 and contract receivable unbilled is a retained fee on a recently completed government contract.

Note 5: Machinery and Equipment

Property and equipment are summarized by major classifications as follows:

	February 28, 2009	May 31, 2008
Machinery and equipment	$ 411,008	$ 225,163
Furniture and fixtures	42,792	16,177
Automobiles	52,730	122,278
Software and computers	216,911	153,352
	723,441	516,970
Less accumulated depreciation	(449,440)	(478,149)
	$ 274,001	$ 38,821

Note 6: Intangible Assets

Intangible assets currently consist of costs associated with the newly acquired atmospheric glow technology, the company's existing TIICM and AWSM technologies and a supply contract acquired through the acquisition of CFP (see Note 10). As more fully explained in Note 2,2022. In exchange, the Company has suspended all further researchagreed to issue Common Stock shares as shown below and development onincluded in the TIICMagreement. All shares were issued in June 2021.