Cover
Cover - USD ($) | 12 Months Ended | ||
May 31, 2022 | Sep. 30, 2022 | Nov. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | May 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --05-31 | ||
Entity File Number | 001-38964 | ||
Entity Registrant Name | SCHMITT INDUSTRIES, INC. | ||
Entity Central Index Key | 0000922612 | ||
Entity Tax Identification Number | 93-1151989 | ||
Entity Incorporation, State or Country Code | OR | ||
Entity Address, Address Line One | 2765 N.W. Nicolai Street | ||
Entity Address, City or Town | Portland | ||
Entity Address, State or Province | OR | ||
Entity Address, Postal Zip Code | 97210 | ||
City Area Code | (503) | ||
Local Phone Number | 227-7908 | ||
Title of 12(b) Security | Common Stock - no par value | ||
Trading Symbol | SMIT | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 17,796,026 | ||
Entity Common Stock, Shares Outstanding | 3,872,134 | ||
Auditor Name | UHY LLP | ||
Auditor Location | Melville, New York | ||
Auditor Firm ID | 1195 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May 31, 2022 | May 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 1,050,910 | $ 4,032,690 |
Accounts receivable, net | 751,551 | 728,867 |
Inventories, net | 1,443,529 | 1,251,422 |
Prepaid expenses | 94,648 | 198,345 |
Income tax receivable | 0 | 18,057 |
Current portion of assets held for sale as discontinued operations | 665,206 | 727,666 |
Total current assets | 4,005,844 | 6,957,047 |
Leasehold assets | 14,282,286 | 10,448,486 |
Property and equipment, net | 2,947,628 | 2,823,366 |
Property and equipment held for sale, net | 433,410 | 174,847 |
Non-current assets held for sale as discontinued operations | 482,279 | 298,507 |
Leasehold, utilities, and ERP deposits | 560,660 | 321,555 |
Other assets | ||
Intangible assets, net | 127,189 | 150,122 |
TOTAL ASSETS | 22,839,296 | 21,173,930 |
Current liabilities | ||
Accounts payable | 844,494 | 581,967 |
Accrued commissions | 66,083 | 60,614 |
Accrued payroll liabilities | 540,895 | 514,660 |
Accrued liabilities | 429,003 | 465,146 |
Customer deposits and prepayments | 116,309 | 93,364 |
Other accrued liabilities | 1,668,298 | 694,590 |
Current portion of long-term lease liabilities | 1,474,463 | 1,042,331 |
Current portion of long-term debt | 503,219 | 541,691 |
Liabilities held for sale as discontinued operations | 185,158 | 14,731 |
Total current liabilities | 5,827,922 | 4,009,094 |
Long-term debt | 2,496,781 | 3,253,389 |
Long-term leasehold liabilities | 13,909,388 | 10,141,864 |
Total liabilities | 22,234,091 | 17,404,347 |
Stockholders' equity | ||
Common stock, no par value, 20,000,000 shares authorized, 4,243,775 and 3,825,724 shares issued and outstanding at May 31, 2022, respectively; and 4,204,553 and 3,786,502 shares issued and outstanding at May 31, 2021, respectively | 12,342,757 | 12,223,359 |
Accumulated deficit | (11,737,552) | (8,453,776) |
Total stockholders' equity | 605,205 | 3,769,583 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 22,839,296 | $ 21,173,930 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2022 | May 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 4,243,775 | 4,204,553 |
Common stock, shares outstanding | 3,825,724 | 3,786,502 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 9,893,210 | $ 5,600,459 |
Cost of revenue | 4,824,639 | 3,535,778 |
Gross profit | 5,068,571 | 2,064,681 |
Operating expenses: | ||
General, administrative and sales | 15,644,001 | 11,398,113 |
Impairment of intangible assets | 0 | 903,422 |
Transaction costs | 125,167 | |
Research & development | 40,456 | 69,601 |
Total operating expenses | 15,684,457 | 12,496,303 |
Operating loss | (10,615,886) | (10,431,622) |
Gain on sale of property and equipment | 4,598,095 | 24,208 |
Bargain purchase gain | 1,138,808 | |
Forgiveness of PPP loans | 2,059,556 | 0 |
Interest Expense | (46,828) | (19,038) |
Other income, net | 315,376 | 248,815 |
Loss before income taxes for continuing operations | (3,689,687) | (9,038,829) |
Income tax provision (benefit) from continuing operations | 19,197 | (403,666) |
Net loss from continuing operations | (3,708,884) | (8,635,163) |
Income from discontinued operations, net of tax | 425,108 | 545,491 |
Net loss | $ (3,283,776) | $ (8,089,672) |
Net loss per common share from continuing operations: | ||
Basic | $ (0.97) | $ (2.29) |
Weighted average number of common shares, basic | 3,808,446 | 3,765,783 |
Diluted | $ (0.97) | $ (2.29) |
Weighted average number of common shares, diluted | 3,808,446 | 3,765,783 |
Net income per common share from discontinued operations: | ||
Basic | $ 0.11 | $ 0.15 |
Weighted average number of common shares, basic | 3,808,446 | 3,765,783 |
Diluted | $ 0.11 | $ 0.15 |
Weighted average number of common shares, diluted | 3,808,446 | 3,765,783 |
Net loss per common share: | ||
Basic | $ (0.86) | $ (2.15) |
Weighted average number of common shares, basic | 3,808,446 | 3,765,783 |
Diluted | $ (0.86) | $ (2.15) |
Weighted average number of common shares, diluted | 3,808,446 | 3,765,783 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Accumulated Deficit | Total |
Beginning balance, value at May. 31, 2020 | $ 12,257,306 | $ (364,104) | $ 11,893,202 |
Shares outstanding at May. 31, 2020 | 3,784,554 | ||
Share repurchases | $ (234,517) | (234,517) | |
Share repurchases, shares | (72,101) | ||
Shares issued to directors, officers and employees upon vesting of RSUs | $ 0 | 0 | 0 |
Shares issued to directors, officers and employees upon vesting of RSUs, shares | 88,449 | ||
Stock-based compensation | $ 266,545 | 266,545 | |
Repurchase of restricted stock units | $ (65,975) | (65,975) | |
Repurchase of restricted stock units, shares | (14,400) | ||
Net loss | (8,089,672) | (8,089,672) | |
Ending balance, value at May. 31, 2021 | $ 12,223,359 | (8,453,776) | 3,769,583 |
Shares outstanding at May. 31, 2021 | 3,786,502 | ||
Shares issued to directors, officers and employees upon vesting of RSUs | $ 0 | 0 | 0 |
Shares issued to directors, officers and employees upon vesting of RSUs, shares | 39,222 | ||
Stock-based compensation | $ 119,398 | 119,398 | |
Net loss | (3,283,776) | (3,283,776) | |
Ending balance, value at May. 31, 2022 | $ 12,342,757 | $ (11,737,552) | $ 605,205 |
Shares outstanding at May. 31, 2022 | 3,825,724 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Cash flows relating to operating activities | ||
Net loss | $ (3,283,776) | $ (8,089,672) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bargain purchase gain | (1,138,808) | |
Forgiveness of PPP Loans | (2,059,556) | 0 |
Intangible impairment | 0 | 903,422 |
Depreciation and amortization | 437,183 | 443,926 |
Gain on disposal of property and equipment | (4,598,095) | (24,208) |
Stock-based compensation | 119,398 | 266,545 |
Deferred income taxes | (453,238) | |
Non-cash lease costs | 365,856 | 735,709 |
Increase (decrease) in: | ||
Accounts receivable, net | (22,684) | (730,971) |
Inventories, net | (192,107) | (153,955) |
Prepaid expenses | 103,698 | (84,388) |
Income tax receivable | 18,057 | (65,519) |
Rent, Utility Deposits, & ERP Deposits | (239,105) | (206,628) |
Accounts payable | 262,527 | 330,945 |
Accrued liabilities and customer deposits | 992,215 | 799,862 |
Net cash used in operating activities - continuing operations | (8,096,389) | (7,466,978) |
Net cash provided by operating activities - discontinued operations | 49,114 | 527,016 |
Net cash used in operating activities - total | (8,047,275) | (6,939,962) |
Cash flows relating to investing activities | ||
Acquisition of Ample Hills | (1,665,854) | |
Purchases of property and equipment | (996,905) | (1,404,830) |
Gain on sale of property and equipment | 4,797,924 | 35,500 |
Net cash provided by (used in) investing activities | 3,801,019 | (3,035,184) |
Cash flows relating to financing activities | ||
Proceeds from Paycheck Protection Program | 264,476 | 4,059,556 |
Repayments on Paycheck Protection Program | (264,476) | |
Proceeds from short-term borrowing | 1,000,000 | |
Payments on short-term borrowing | (53,283) | |
Repurchase of common stock | (300,492) | |
Net cash provided by financing activities | 1,264,476 | 3,441,305 |
Decrease in cash and cash equivalents | (2,981,780) | (6,533,841) |
Cash and cash equivalents, beginning of period | 4,032,690 | 10,566,531 |
Cash and cash equivalents, end of period | 1,050,910 | 4,032,690 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for income taxes | 19,197 | 80,600 |
Cash paid during the period for interest | $ 63 | $ 616 |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 12 Months Ended |
May 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS Schmitt Industries, Inc. (the "Company", "Schmitt", "we" or "our") operates a diversified business providing highly precise test and measurement products, as well as providing quality consumer products through the Company’s ice cream manufacturing and retail business. Through its wholly owned subsidiary, Schmitt Measurement Systems, Inc. (the “Measurement Segment”), the Company manufactures and sells products in two core product lines, Acuity Lasers and Xact Tank Monitoring. · Acuity™ was acquired in June of 2000 and manufactures and markets dimensional and distance measurement lasers. These laser products utilize both triangulation and time-of-flight measurement principles and are known for their speed and accuracy. The Acuity products are used in a wide variet y of industrial, commercial and research applications. · Xact™ was acquired in February of 2008 and offers ultrasonic measurement technology for the remote monitoring of the fill levels of propane and other liquid tanks. Together with the Xact gauge reader, the satellite-focused Xact systems can detect and communicate fill levels, along with other information such as tank size and configuration, to customers through the “Internet of Things” (“IoT”) ecosystem using the Company’s satellite provider and a secure website. Typical users of Xact systems are bulk propane, diesel, jet fuel suppliers and ammonia users and distributors. As of May 31, 2022, the Xact product line is classified as held-for-sale and considered discontinued operations of the Company. See further discussion in Note 4 – Assets held for sale and operations classified as discontinued operations Through its wholly owned subsidiary, Ample Hills Acquisition LLC, and its subsidiaries (collectively, “Ample Hills” or “Ice Cream Segment”), the Company manufactures, wholesales and retails ice cream and related products through a network of retail locations located in New York, New Jersey and California. Unless otherwise noted, discussion in these Notes to Consolidated Financial Statements refers to our continuing operations. Refer to Note 4, Assets held for sale and operations classified as discontinued operations |
LIQUIDITY AND GOING CONCERN
LIQUIDITY AND GOING CONCERN | 12 Months Ended |
May 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND GOING CONCERN | NOTE 2 – LIQUIDITY AND GOING CONCERN Historically, the Company’s primary sources of liquidity have been cash and cash equivalents, cash flows from operations (when available) and cash flows from investing and financing activities, including proceeds from the sale of property and equipment, funding under business loans and credit agreements and the sale of equity securities. As of May 31, 2022, the Company had an aggregate cash and cash equivalent balance of $ 1,050,910 1,822,078 3,268,533 Subsequent Event The Company currently projects that it will need additional capital to fund its current operations and capital investment requirements until the Company scales to a revenue level that permits cash self-sufficiency. As a result, the Company needs to raise additional capital or secure debt funding to support on-going operations until such time. This projection is based on the Company’s current expectations regarding product sales and service, cost structure, cash burn rate and other operating assumptions. The sources of this capital are anticipated to be from the sale of equity and/or debt. Alternatively, or in addition, the Company may seek to sell additional assets or portions of its business (see Note 4 – Assets held for sale and operations classified as discontinued operations If the Company is unable to raise additional capital moving forward, its ability to operate in the normal course and continue to invest in its product portfolio may be negatively impacted and the Company may be forced to scale back operations or divest some or all of its products. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Unless management is able to obtain additional financing, it is unlikely that the Company will be able to meet its funding requirements during the next 12 months. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
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 |
ASSETS HELD FOR SALE AND OPERAT
ASSETS HELD FOR SALE AND OPERATIONS CLASSFIED AS DISCONTINUED OPERATIONS | 12 Months Ended |
May 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS HELD FOR SALE AND OPERATIONS CLASSFIED AS DISCONTINUED OPERATIONS | NOTE 4 – ASSETS HELD FOR SALE AND OPERATIONS CLASSFIED AS DISCONTINUED OPERATIONS On April 14, 2022, the Company announced its intention to focus on the Ice Cream Segment as its core business and simultaneously launch a strategic review of the Company’s Measurement Segment, including the Xact and Acuity business lines. Management anticipates disposing of the Measurement Segment through multiple transactions involving the sale of legal entities, assets, or a combination thereof. In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations The following table presents the Company’s consolidated assets and liabilities recorded in “Assets held for sale as discontinued operations” and “Liabilities held for sale as discontinued operations,” respectively, on the Company’s consolidated balance sheets as of May 31, 2022 and 2021: Fiscal Year Ended May 31, 2022 2021 ASSETS Current assets Accounts receivable, net $ 382,361 $ 425,778 Inventories 282,845 301,888 Total current assets 665,206 727,666 Property and equipment, net 452 651 Leasehold, utilities, and ERP deposits 394,676 110,253 Intangible assets, net 87,152 187,603 TOTAL ASSETS $ 1,147,486 $ 1,026,173 LIABILITIES Current liabilities Accounts payable $ 180,613 $ 1,783 Accrued payroll liabilities 4,545 12,948 Total current liabilities 185,158 14,731 TOTAL LIABILITIES $ 185,158 $ 14,731 The following table presents the Company’s net income from discontinued operations for the years ended May 31, 2022 and 2021: Fiscal Year Ended May 31, 2022 2021 Net sales $ 2,069,496 $ 2,263,891 Cost of revenue 1,130,050 1,057,810 Gross profit 939,446 1,206,081 Operating expenses General, administrative and sales 514,338 647,061 Research & development — 13,529 Total operating expenses 514,338 660,590 Operating income 425,108 545,491 Income before income taxes 425,108 545,491 Income tax provision (benefit) from discontinued operations — — Income from discontinued operations, net of tax $ 425,108 $ 545,491 On May 17, 2022, the Company announced that it had entered into a letter of intent to sell all assets related to its Xact business line. As noted in Note 20 – Subsequent Events |
AMPLE HILLS BUSINESS ACQUISITIO
AMPLE HILLS BUSINESS ACQUISITION | 12 Months Ended |
May 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
AMPLE HILLS BUSINESS ACQUISITION | NOTE 5 – AMPLE HILLS BUSINESS ACQUISITION On July 9, 2020, the Ample Hills Acquisition LLC entered into an agreement to acquire Ample Hills Holdings, Inc. and Ample Hills Creamery, Inc. and their subsidiaries (collectively the “Ample Hills Entities”). The Ample Hills Entities were a debtor-in-possession under title 11 of the United States Code, 11 U.S.C. § 101 et seq. pursuant to voluntary petitions for relief filed under Chapter 11 of the Bankruptcy Code on March 15, 2020. The acquisition was conducted through a bankruptcy court-supervised process subject to bidding procedures and certain closing conditions. The terms of the agreement provided that the Company acquired select assets and liabilities of the Ample Hills Entities for a base purchase price of $ 1,000,000 713,404 125,167 The Company's operating strategy includes utilizing its capital for value opportunities. Accordingly, the primary purpose of the Ample Hills acquisition was to capitalize on this strategy by purchasing a business with a good brand name, which, in light of the price paid in bankruptcy, could have a significant upside. In accordance with ASC 805 , Under ASC 805, any excess of the fair value of the purchase consideration over the identified net assets is to be recorded as goodwill; conversely, any excess of the fair value of the net assets acquired over the purchase consideration is recorded as a bargain purchase gain. The excess of the aggregate fair value of the identifiable net assets acquired over the total purchase price was $ 1,138,808 The following table summarizes the Company’s purchase price allocation for the acquisition of Ample Hills: Ample Hills Business Acquisition - Schedule of Purchase Price Allocation Purchase Price Cash paid to sellers $ 1,000,000 Cure payments 713,404 Total purchase price $ 1,713,404 Purchase Price Allocation Assets Acquired Right-of-use operating lease assets $ 10,645,098 Website 25,445 Tradename and trademarks 903,422 Proprietary recipes 146,739 Security deposits 225,180 Machinery and equipment 564,553 Leasehold improvements 815,798 Inventory 632,100 Total assets acquired $ 13,958,335 Liabilities Assumed Lease liabilities $ 10,645,098 Deferred tax liability 405,688 Customer deposits 20,204 Gift card liabilities 35,133 Total liabilities assumed 11,106,123 Net assets acquired 2,852,212 Gain on bargain purchase $ 1,138,808 |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
May 31, 2022 | |
Credit Loss [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 6 – ACCOUNTS RECEIVABLE, NET Accounts receivable, net consisted of the following: Accounts Receivable, Net - Schedule of Accounts Receivable, Net Fiscal Year Ended May 31, 2022 2021 Receivables $ 838,825 $ 775,431 Less: allowance for doubtful accounts (87,274 ) (46,564 ) Accounts receivable, net $ 751,551 $ 728,867 |
INVENTORIES, NET
INVENTORIES, NET | 12 Months Ended |
May 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | NOTE 7 – INVENTORIES, NET Inventories, net consisted of the following: Inventories, Net - Schedule of Inventories, Current Fiscal Year Ended May 31, 2022 2021 Raw materials $ 905,376 $ 607,825 Work-in-process 64,390 35,160 Finished goods 574,645 687,488 Total inventory 1,544,411 1,330,473 Inventory reserves (100,882 ) (79,051 ) Inventory, net $ 1,443,529 $ 1,251,422 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
May 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 8 – PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following: Property and Equipment, Net - Schedule of Property, Plant and Equipment, Net Fiscal Year Ended May 31, 2022 2021 Land $ — $ 159,000 Buildings and improvements 2,072,231 2,989,140 Furniture, fixtures and equipment 2,051,722 1,787,264 Total plant and equipment 4,123,953 4,935,404 Less accumulated depreciation (1,176,325 ) (2,112,038 ) Property and equipment, net $ 2,947,628 $ 2,823,366 Depreciation expense for the fiscal years ended May 31, 2022 and 2021 was $ 414,250 421,864 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
May 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9 - INCOME TAXES Effective Tax Rate The effective tax rate for Fiscal 2022 and Fiscal 2021 was (0.59 4.7 The provision for income taxes for the fiscal years ended May 31, 2022 and 2021 was as follows: Income Taxes - Schedule of Components of Income Tax Expense Benefit Fiscal Year Ended May 31, 2022 2021 Current provision for continued operations $ 19,197 $ (403,666 ) Current provision for discontinued operations — — Deferred provision 5,167,143 2,203,268 Change in valuation allowance (5,167,143 ) (2,203,268 ) Total provision for income taxes $ 19,197 $ (403,666 ) Deferred tax assets are comprised of the following components as of May 31, 2022 and 2021: Income Taxes - Schedule of Deferred Tax Assets and Liabilities Fiscal Year Ended May 31, 2022 2021 Basis difference for assets $ (55,507 ) $ (541,015 ) Inventory related items 38,912 30,910 Lease right-of-use assets 321,405 197,573 Other reserves and liabilities 260,068 163,348 Net operating loss carryforward 4,228,721 3,333,873 General business and other credit carry forward 373,544 450,252 Gross deferred tax assets 5,167,143 3,634,941 Deferred tax asset valuation allowance (5,167,143 ) (3,634,941 ) Net deferred tax assets $ — $ — 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. The Company has recorded a substantial deferred tax asset related to temporary differences between book and tax basis of assets and liabilities and net operating loss carryforwards. During the fiscal year ended May 31, 2022, the Company increased its valuation allowance by $ 1,532,202 2,203,268 The Company has federal net operating loss carryforwards of $ 14,532,066 19,984,566 Federal State The provision for income taxes differs from the amount of income taxes determined by applying the U.S. statutory federal tax rate to pre-tax loss due to the following: Income Taxes - Schedule of Effective Income Tax Rate Reconciliation Fiscal Year Ended May 31, 2022 2021 Statutory federal rate 21.00 % 21.0 % State Taxes, net of federal benefit 12.37 % 5.8 % Change in deferred tax valuation allowance (47.06 )% (25.8 )% Bargain Gain — % 4.8 % R&D tax credits — % — % Effect of foreign income tax rates — % — % State minimum taxes — % (0.1 )% Permanent and other differences 13.10 % (1.0 )% Effective Tax Rate (0.59 )% 4.7 % Interest and penalties associated with uncertain tax positions are recognized as components of the Provision for income taxes. There was no liability for payment of interest and penalties as of May 31, 2022 and May 31, 2021. Several tax years are subject to examination by major tax jurisdictions. In the United States, federal tax years for the years ended May 31, 2019 and after are subject to examination. |
STOCK OPTIONS AND STOCK-BASED C
STOCK OPTIONS AND STOCK-BASED COMPENSATION | 12 Months Ended |
May 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS AND STOCK-BASED COMPENSATION | NOTE 10 – STOCK OPTIONS AND 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. Stock-based compensation recognized during the period is based on the portion of the grant date fair value 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. There were no options granted during the fiscal years ended May 31, 2022 and 2021 and the Company had outstanding stock options to purchase 22,500 1.70 Options granted, exercised, canceled and expired under the Company's stock-based comp ensation plans during the fiscal years ended May 31, 2022 and 2021 are summarized as follows: Stock Options and Stock-Based Compensation - Schedule of Stock Option Activity Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Options outstanding and exercisable - May 31, 2020 22,500 $ 1.70 6.9 $ 38,250 Options granted — — Options exercised — $ — Options forfeited/canceled — $ — Options outstanding and exercisable - May 31, 2021 22,500 $ 1.70 5.8 $ 38,250 Options granted — — Options exercised — $ — Options forfeited/canceled — $ — Options outstanding and exercisable - May 31, 2022 22,500 $ 1.70 4.8 $ 38,250 Restricted Stock Units Service-based 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. During the fiscal year ended May 31, 2021, there were 76,315 372,717 97,225 During the fiscal year ended May 31, 2022, there were 19,286 86,463 35,330 7,860 Number of Units Weighted- Average Price at Grant Date Aggregate Intrinsic Value Non-vested restricted stock units – May 31, 2020 55,147 $ 3.28 $ 180,882 Restricted stock units granted 76,315 4.88 372,717 Restricted stock units vested (97,225 ) 4.03 (392,199 ) Non-vested restricted stock units – May 31, 2021 34,237 $ 4.71 $ 161,400 Restricted stock units granted 19,286 4.48 86,463 Restricted stock units forfeited (7,860 ) 5.60 (44,018 ) Restricted stock units vested (35,330 ) 4.33 (153,018 ) Non-vested restricted stock units – May 31, 2022 10,333 $ 4.92 $ 50,827 During fiscal years ended May 31, 2022 and 2021, total restricted stock unit compensation expense recognized was $ 119,398 266,545 40,436 81,385 |
WEIGHTED-AVERAGE SHARES AND REC
WEIGHTED-AVERAGE SHARES AND RECONCILIATION | 12 Months Ended |
May 31, 2022 | |
Net loss per common share: | |
WEIGHTED-AVERAGE SHARES AND RECONCILIATION | NOTE 11 – WEIGHTED-AVERAGE SHARES AND RECONCILIATION For the fiscal years ended May 31, 2022 and May 31, 2021, potentially dilutive securities consisted of options of 22,500 1.70 Common Stock Options The following table is a reconciliation of the numerators and denominators of the basic and diluted per share computations for loss from continuing operations for fiscal years ended May 31, 2022 and 2021, respectively: Weighted-Average Shares and Reconciliation - Schedule of Earnings Per Share, Basic and Diluted Net Weighted-Avg Per Share (Loss) Income Shares Amount Fiscal year ended May 31, 2022 Basic earnings per share from continuing operations $ (0.97 ) Loss available to stockholders $ (3,708,844 ) 3,808,446 — Loss available to common stockholders $ (3,708,844 ) 3,808,446 $ (0.97 ) Basic earnings per share from discontinued operations $ 0.11 Income available to stockholders $ 425,108 3,808,446 — Income available to common stockholders $ 425,108 3,808,446 $ 0.11 Fiscal year ended May 31, 2021 Basic earnings per share from continuing operations $ (2.29 ) Loss available to stockholders $ (8,635,163 ) 3,765,783 Loss available to common stockholders $ (8,635,163 ) 3,765,783 $ (2.29 ) Basic earnings per share from discontinued operations $ 0.15 Income available to stockholders $ 545,491 3,765,783 — Income available to common stockholders $ 545,491 3,765,783 $ 0.15 |
LEASES
LEASES | 12 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 12 - LEASES As a Lessor On November 22, 2019, the Company entered into a commercial lease agreement in which Tosei America, Inc. leased the Company's building located at 2451 NW 28 th 23,282 120 On October 1, 2020, the Company entered into a commercial lease agreement in which Humboldt Street Collective, LLC will lease the Company's building located at 2765 NW Nicolai Street, Portland, OR 97210 for a monthly fee of $ 3,185 62 Subsequent Events On December 1, 2020, the Company entered into a commercial lease agreement in which Humboldt Street Collective, LLC, leased a portion of the Company’s building located at 2451 NW 28th Avenue, Portland, OR 97210 for a monthly fee of $ 4,596 59 As of May 31, 2022, minimum future lease payments receivable are as follows: Leases - Schedule of Future Minimum Lease Payments Receivable Years Ending May 31, 2023 97,807 2024 100,742 2025 103,764 2026 47,585 Total undiscounted cash flows $ 349,898 As a Lessee In connection with the acquisition of Ample Hills, the Company assumed multiple real estate leases for retail store locations and a manufacturing facility, all of which are classified as operating leases under ASC 842. The Company has since entered into three additional retail lease agreements which commenced during the fiscal year ended May 31, 2022, all of which are classified as operating leases under ASC 842. The Company’s operating leases contain varying terms and expire at various dates through 2042. Lease expenses under fixed term leases were $ 1,843,932 1,438,502 Certain of the Company’s operating leases contain variable lease payments related to certain performance targets by the Company at the respective store locations. These variable leases costs are recognized as incurred in accordance with ASC 842. The Company’s future minimum lease payments required under operating leases that have commenced as of May 31, 2022 were as follows: Leases - Schedule of Future Minimum Lease Payments for Operating Leases Years Ending May 31, 2023 $ 2,047,329 2024 2,030,688 2025 1,993,618 2026 1,782,111 2027 1,412,915 Thereafter 11,184,613 Total lease payments 20,451,274 Less: imputed interest (5,067,423 ) Present value of future lease payments 15,383,851 Less: current portion of long-term lease liabilities (1,474,463 ) Long-term lease liabilities, net of current portion $ 13,909,388 The weighted-average remaining lease term and weighted-average discount rate for operating leases that have commenced as of May 31, 2022 are as follows: Leases - Schedule of Lease Terms and Discount Rates as of May 31, 2022 Weighted-average remaining lease term (years) 11.28 Weighted-average discount rate 4.56 % |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
May 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 13 – LONG-TERM DEBT Paycheck Protection Program Loan On March 21, 2020, the Coronavirus Aid Relief and Economic Security Ace (“CARES ACT”) was enacted. The CARES ACT established the Paycheck Protection Program (“PPP”) which provides funding to eligible businesses through federally-guaranteed loans. Under the PPP, companies are eligible for forgiveness of principal and accrued interest if the proceeds are used for eligible costs, which include, but are not limited to, payroll, benefits, mortgage, lease, and utility expenses. The Company received three PPP loans during Fiscal 2021, two of which were forgiven during the year ended May 31, 2022. The remaining outstanding PPP loan is as follows: Long-Term Debt - Schedule of Long-Term Debt Loan Amount Issuance Date Maturity Period Interest Rate Second Draw PPP Loan (Ample Hills) $ 2,000,000 April 6, 2021 5 1.0 % Total PPP Loan Balance $ 2,000,000 The first two loans (both of which were forgiven during Fiscal 2022 and therefore excluded from the table) were granted on July 30, 2020 (collectively the “First Draw PPP Loans”) under two notes payable. Both notes were issued July 30, 2020 and funds were disbursed on August 3, 2020. The third loan was granted and issued on April 6, 2021 (the “Second Draw PPP Loan”) to Ample Hills under a note payable which matures five years from the date of issuance and bears interest annually of 1.0%. Interest is accrued monthly, commencing on the date of issuance. Principal and interest is paid monthly through the maturity date, commencing on April 6, 2021 for the Second Draw PPP Loan, unless forgiven as described below. The note may be prepaid at any time prior to maturity with no prepayment penalties. As noted above, Loan proceeds may be used only for eligible expense. Ample Hills has used and intends to use the remaining funds for eligible purposes, including the re-hiring of its workforce. Ample Hills is currently seeking forgiveness of the balance of the Second Draw PPP Loan. Forgiveness of the Second Draw PPP Loan is available for principal that is used for the limited purposes that qualify for forgiveness under the requirements of the Small Business Administration (“SBA”), in addition to accrued interest. To obtain forgiveness, the Company must request it, provide documentation in accordance with SBA requirements and certify that the amounts requested to be forgiven qualify under those requirements. There is no guarantee that the remaining Second Draw Loan will be forgiven by the SBA and therefore, the Company has recorded a $ 2,000,000 503,219 On August 2, 2021, the Company requested forgiveness of the First Draw PPP Loan and provided documentation in accordance with SBA requirements and certified the amounts requested to be forgiven qualified under the requirements. On August 28, 2021, the Company received correspondence from Bank of America, which included a Notice of Paycheck Protection Program Forgiveness Payment from SBA for a portion of the First Draw PPP Loan in the amount of $ 588,534 264,476 On December 15, 2021 and December 22, 2021, respectively, for the remaining portion of the First Draw PPP Loan and the Second Draw PPP Loan, the Company provided documentation in accordance with SBA requirements and certified the amounts requested to be forgiven qualified under the requirements. During the twelve months ended May 31, 2022, the Company received notification that the remaining First Draw PPP Loan had been forgiven by the SBA and subsequently recognized a $ 2,059,556 Although the Company has applied for forgiveness of the entire Second Draw PPP Loan, there is no guarantee that the loan will be forgiven by the SBA. Interest expense on the PPP loans during the years ended May 31, 2022 and 2021 was $ 42,713 19,038 2,000,000 3,795,080 Related Party Promissory Note On August 7, 2021, the Company received The Commitment Letter to Schmitt Industries (“Commitment”) from an entity affiliated with our CEO. The Commitment states that Sententia Capital Management LLC or its affiliated entities will provide additional capital as required to Schmitt up to $ 1,300,000 October 28, 2023 Drawdown terms include: 1.0% origination fee, 18-month term after drawdown, and an 8.0% payment-in-kind interest rate. 4,115 0 1,000,000 0 Investor As of May 31, 2022 and 2021, respectively, the Company had the following current and long-term liabilities recorded for their debt obligations: Long-Term Debt - Schedule of Debt Fiscal Year Ended May 31, 2022 2021 Current portion $ 503,219 $ 541,691 Long-term portion 2,496,781 3,253,389 Total $ 3,000,000 $ 3,795,080 Principal payments of outstanding long-term debt as of May 31, 2022 are as follows: Long-Term Debt - Schedule of Maturities of Long-Term Debt Year ending May 31: 2023 $ 503,219 2024 1,512,389 2025 513,380 2026 471,012 Total principal payments $ 3,000,000 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
May 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 14 – INTANGIBLE ASSETS Intangible assets include the Company’s website and proprietary recipes for its Ice Cream Segment. These assets are amortized over their estimated useful lives ranging from three ten Minimum Maximum As of May 31, 2022 and May 31, 2021, for the Ice Cream Segment, the gross carrying value of amortizable intangible assets was $ 172,184 44,995 22,062 22,933 22,062 7.59 The following table presents the major components of finite-intangible assets which are subject to amortization as of May 31, 2022 and May 31, 2021: Intangible Assets - Intangible Assets - Schedule of Finite-Lived Intangible Assets As of May 31, 2022 Useful Life (Years) Gross Carrying Value Accumulated Amortization Net Carrying Value Finite-lived intangible assets subject to amortization: Ice Cream Segment Proprietary recipes 10 $ 146,739 $ 28,555 $ 118,184 Company website 3 25,445 16,440 9,005 Ice Cream Segment finite-lived intangible assets $ 172,184 $ 44,995 $ 127,189 As of May 31, 2021 Useful Life (Years) Gross Carrying Value Accumulated Amortization Net Carrying Value Finite-lived intangible assets subject to amortization: Ice Cream Segment Proprietary recipes 10 $ 146,739 $ 13,934 $ 132,805 Company website 3 25,445 8,128 17,317 Ice Cream Segment finite-lived intangible assets $ 172,184 $ 22,062 $ 150,122 Estimated amortization expense for each of the following years is as follows: Intangible Assets - Schedule of Finite-Lived Intangible Assets Future Amortization Expense Year Ending May 31, 2023 $ 22,933 2024 15,313 2025 14,621 2026 14,621 2027 14,621 Thereafter 45,080 Total expected amortization expense $ 127,189 During the fourth quarter of fiscal 2021, the Company made an evaluation based on factors such as changes in the Ice Cream segment’s growth rate and recent trends in the Ice Cream segment’s forecasted financial information, and concluded that a triggering event for an interim impairment analysis had occurred. As part of qualitative assessment, it was determined that the carrying value of the Ample Hills Tradename exceeded its estimated fair value. The Tradename was valued using the relief-from-royalty method – a variation of the income approach – which was used for the initial valuation of the Tradename in connection with the Company’s acquisition of Ample Hills. Due to a reduction in estimated total enterprise value as a result of the change in financial projections, there is no incremental fair value to allocate to the tradename. Therefore, the Company recognized an impairment loss in the amount of $ 903,422 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
May 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 15 – SEGMENT INFORMATION Presented below is certain information by reportable segment. The Company uses the same accounting policies for each reportable segment as it uses for the Company as a whole. Segment Information Fiscal Year Ended, May 31, 2022 2021 Ice Cream Measurement Ice Cream* Measurement Net revenue $ 8,315,486 $ 1,577,724 $ 4,043,436 $ 1,557,023 Gross margin $ 4,426,579 $ 641,992 $ 1,591,207 $ 473,474 Gross margin % 53.2 % 40.7 % 39.4 % 30.4 % Operating Expenses $ 12,019,919 $ 3,664,538 $ 9,411,447 $ 3,084,856 Operating loss $ (7,593,342 ) $ (3,022,544 ) $ (7,820,240 ) $ (2,611,382 ) Depreciation expense $ 395,071 $ 19,179 $ 377,641 $ 44,223 Amortization expense $ 22,933 $ — $ 22,062 $ — Capital expenditures $ 967,757 $ 29,148 $ 1,382,959 $ 21,871 (*) Ice Cream Segment activity for Fiscal 2021 includes activities from the date of acquisition (July 9, 2020) through May 31, 2021. Segment Assets Fiscal Year Ended May 31, 2022 2021 Segment assets to total assets Ice Cream Segment $ 10,463,502 $ 10,713,832 Measurement Segment 2,245,663 2,565,701 Corporate assets 10,130,131 7,894,397 Total assets $ 22,839,296 $ 21,173,930 All of the Company’s operations for both the Ice Cream Segment and the Measurement Segment are conducted within North America. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
May 31, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 16 - EMPLOYEE BENEFIT PLANS The Company adopted the Schmitt Industries, Inc. 401(k) Profit Sharing Plan & Trust effective June 1, 1996. Employees must meet certain age and service requirements to be eligible. Participants may contribute up to 15% of their eligible compensation which may be partially matched by the Company. The Company may make further contributions in the form of a profit-sharing contribution or a discretionary contribution. The Company made matching contributions in conjunction with employee contributions to the plan totaling $ 43,761 55,005 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
May 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 17 - COMMITMENTS AND CONTINGENCIES In a transaction related to the acquisition of Schmitt Measurement Systems, Inc., formerly TMA Technologies, Inc. ("TMA"), the Company established a royalty pool and vested in each shareholder and debt holder of the acquired company an interest in the royalty pool equal to the amount invested or loaned including interest payable through March 1995. The royalty pool is funded at 5% of net revenues (defined as gross sales less returns, allowances and sales commissions) of the Company's surface measurement products and future derivative products developed by Schmitt Industries, Inc., which utilize these technologies. As part of the royalty pool agreement, each former shareholder and debt holder released TMA from any claims with regard to the acquisition except their rights to future royalties. Royalty expense applicable to the fiscal years ended May 31, 2022 and 2021 amounted to $ 19,429 32,106 In Fiscal 2020, the Company determined that it was more likely than not that the Company had a pre-existing tax liability related to prior periods. The Company has analyzed the liability and estimated it to be $ 265,349 |
CUSTOMER CONCENTRATION
CUSTOMER CONCENTRATION | 12 Months Ended |
May 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CUSTOMER CONCENTRATION | NOTE 18 – CUSTOMER CONCENTRATION With respect to the Company’s consolidated net revenues from continuing operations, the Company is not dependent on any one or a few major customers. The Company had one customer that accounted for 17.8 2.9 With respect to discontinued operations, the Company had one customer that accounted for 11.2 15.4 43.3 25.0 Customer Revenues Accounts Receivable |
OUT-OF-PERIOD ADJUSTMENTS
OUT-OF-PERIOD ADJUSTMENTS | 12 Months Ended |
May 31, 2022 | |
Out-of-period Adjustments | |
OUT-OF-PERIOD ADJUSTMENTS | NOTE 19 – OUT-OF-PERIOD ADJUSTMENTS Out-Of-Period Adjustments During Fiscal 2022, the Company recorded an out-of-period adjustment of $ 72,000 72,000 72,000 During Fiscal 2021, the Company recorded an out-of-period adjustment related to the manner in which the Company calculated and recorded market-based stock-based compensation expense. The impact of this adjustment resulted in a decrease to stock-based compensation expense of $ 243,187 243,187 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
May 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20 – SUBSEQUENT EVENTS Subsequent Events On June 2, 2022, the Company announced that it entered into an agreement for the sale of its Nicolai Street real estate for $ 3,268,533 On June 16, 2022, the Company announced a new Ample Hills retail lease in Manhattan's historic Greenwich Village. On June 16, 2022, the Company announced that the Board of the Company did not approve the proposed transaction involving the sale of the Xact business line, and that the letter of intent for the proposed transaction had been formally terminated. On July 20, 2022, the Company announced that it entered into a non-binding term sheet which contemplates the potential reverse merger with Proton Green, LLC and the spin-off of Schmitt’s Ample Hills business to pre-merger shareholders of Schmitt’s common stock. It is contemplated that Proton Green would become a wholly owned subsidiary of Schmitt, the Company would be renamed “Proton Green Corporation”, and the common stock would continue to trade on the Nasdaq under a new symbol. If consummated, Ample Hills would become a standalone entity and the newly merged company would retain any remaining components of the SMS business. On September 17, 2022, the Company received notice of termination of the previously announced non-binding term sheet with Proton Green, LLC (“Proton Green”) regarding the reverse merger with Proton Green and spin-off of Schmitt’s Ample Hills business. On September 20, 2022, the Company determined that the Company’s previously-issued condensed consolidated interim financial statements included in the associated Form 10-Qs for the periods ended August 31, 2021, November 30, 2021 and February 28, 2022, including the comparative periods, should no longer be relied upon due to certain errors in the ineffective application of cut-off procedures resulting primarily in the exclusion of certain general and administrative expenses from the statement of operations in the Company’s interim financial statements during the fiscal year ended May 31, 2022. On October 12, 2022, the Company filed Form 10-Q/A’s for each respective interim period with restated interim financial statements reflecting adjustments recorded to correct the errors. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 | 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 | 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 | 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 | 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 | Business Combinations The Company accounts for business combinations in accordance with Accounting Standard Codification (“ASC”) 805 - Business Combinations Ample Hills Business Acquisition |
Revenue Recognition | 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 | 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, 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, 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, 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, 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 | 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 | 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 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 Research and development costs, predominately internal labor costs and costs of materials, are charged to expense when incurred. |
Shipping and Handling | 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 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 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 | 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 | 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 | 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 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 | 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 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies - Schedule of Customer Deposits and Prepayments | 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 |
Summary of Significant Accounting Policies - Schedule of Assets Held for Sale | 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 |
ASSETS HELD FOR SALE AND OPER_2
ASSETS HELD FOR SALE AND OPERATIONS CLASSFIED AS DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
May 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | Fiscal Year Ended May 31, 2022 2021 ASSETS Current assets Accounts receivable, net $ 382,361 $ 425,778 Inventories 282,845 301,888 Total current assets 665,206 727,666 Property and equipment, net 452 651 Leasehold, utilities, and ERP deposits 394,676 110,253 Intangible assets, net 87,152 187,603 TOTAL ASSETS $ 1,147,486 $ 1,026,173 LIABILITIES Current liabilities Accounts payable $ 180,613 $ 1,783 Accrued payroll liabilities 4,545 12,948 Total current liabilities 185,158 14,731 TOTAL LIABILITIES $ 185,158 $ 14,731 The following table presents the Company’s net income from discontinued operations for the years ended May 31, 2022 and 2021: Fiscal Year Ended May 31, 2022 2021 Net sales $ 2,069,496 $ 2,263,891 Cost of revenue 1,130,050 1,057,810 Gross profit 939,446 1,206,081 Operating expenses General, administrative and sales 514,338 647,061 Research & development — 13,529 Total operating expenses 514,338 660,590 Operating income 425,108 545,491 Income before income taxes 425,108 545,491 Income tax provision (benefit) from discontinued operations — — Income from discontinued operations, net of tax $ 425,108 $ 545,491 On May 17, 2022, the Company announced that it had entered into a letter of intent to sell all assets related to its Xact business line. As noted in Note 20 – Subsequent Events |
AMPLE HILLS BUSINESS ACQUISIT_2
AMPLE HILLS BUSINESS ACQUISITION (Tables) | 12 Months Ended |
May 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Ample Hills Business Acquisition - Schedule of Purchase Price Allocation | The following table summarizes the Company’s purchase price allocation for the acquisition of Ample Hills: Ample Hills Business Acquisition - Schedule of Purchase Price Allocation Purchase Price Cash paid to sellers $ 1,000,000 Cure payments 713,404 Total purchase price $ 1,713,404 Purchase Price Allocation Assets Acquired Right-of-use operating lease assets $ 10,645,098 Website 25,445 Tradename and trademarks 903,422 Proprietary recipes 146,739 Security deposits 225,180 Machinery and equipment 564,553 Leasehold improvements 815,798 Inventory 632,100 Total assets acquired $ 13,958,335 Liabilities Assumed Lease liabilities $ 10,645,098 Deferred tax liability 405,688 Customer deposits 20,204 Gift card liabilities 35,133 Total liabilities assumed 11,106,123 Net assets acquired 2,852,212 Gain on bargain purchase $ 1,138,808 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
May 31, 2022 | |
Credit Loss [Abstract] | |
Accounts Receivable, Net - Schedule of Accounts Receivable, Net | Accounts receivable, net consisted of the following: Accounts Receivable, Net - Schedule of Accounts Receivable, Net Fiscal Year Ended May 31, 2022 2021 Receivables $ 838,825 $ 775,431 Less: allowance for doubtful accounts (87,274 ) (46,564 ) Accounts receivable, net $ 751,551 $ 728,867 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 12 Months Ended |
May 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories, Net - Schedule of Inventories, Current | Inventories, net consisted of the following: Inventories, Net - Schedule of Inventories, Current Fiscal Year Ended May 31, 2022 2021 Raw materials $ 905,376 $ 607,825 Work-in-process 64,390 35,160 Finished goods 574,645 687,488 Total inventory 1,544,411 1,330,473 Inventory reserves (100,882 ) (79,051 ) Inventory, net $ 1,443,529 $ 1,251,422 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
May 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net - Schedule of Property, Plant and Equipment, Net | Property and equipment, net consisted of the following: Property and Equipment, Net - Schedule of Property, Plant and Equipment, Net Fiscal Year Ended May 31, 2022 2021 Land $ — $ 159,000 Buildings and improvements 2,072,231 2,989,140 Furniture, fixtures and equipment 2,051,722 1,787,264 Total plant and equipment 4,123,953 4,935,404 Less accumulated depreciation (1,176,325 ) (2,112,038 ) Property and equipment, net $ 2,947,628 $ 2,823,366 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
May 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes - Schedule of Components of Income Tax Expense Benefit | The provision for income taxes for the fiscal years ended May 31, 2022 and 2021 was as follows: Income Taxes - Schedule of Components of Income Tax Expense Benefit Fiscal Year Ended May 31, 2022 2021 Current provision for continued operations $ 19,197 $ (403,666 ) Current provision for discontinued operations — — Deferred provision 5,167,143 2,203,268 Change in valuation allowance (5,167,143 ) (2,203,268 ) Total provision for income taxes $ 19,197 $ (403,666 ) |
Income Taxes - Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets are comprised of the following components as of May 31, 2022 and 2021: Income Taxes - Schedule of Deferred Tax Assets and Liabilities Fiscal Year Ended May 31, 2022 2021 Basis difference for assets $ (55,507 ) $ (541,015 ) Inventory related items 38,912 30,910 Lease right-of-use assets 321,405 197,573 Other reserves and liabilities 260,068 163,348 Net operating loss carryforward 4,228,721 3,333,873 General business and other credit carry forward 373,544 450,252 Gross deferred tax assets 5,167,143 3,634,941 Deferred tax asset valuation allowance (5,167,143 ) (3,634,941 ) Net deferred tax assets $ — $ — |
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes differs from the amount of income taxes determined by applying the U.S. statutory federal tax rate to pre-tax loss due to the following: Income Taxes - Schedule of Effective Income Tax Rate Reconciliation Fiscal Year Ended May 31, 2022 2021 Statutory federal rate 21.00 % 21.0 % State Taxes, net of federal benefit 12.37 % 5.8 % Change in deferred tax valuation allowance (47.06 )% (25.8 )% Bargain Gain — % 4.8 % R&D tax credits — % — % Effect of foreign income tax rates — % — % State minimum taxes — % (0.1 )% Permanent and other differences 13.10 % (1.0 )% Effective Tax Rate (0.59 )% 4.7 % |
STOCK OPTIONS AND STOCK-BASED_2
STOCK OPTIONS AND STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
May 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Options and Stock-Based Compensation - Schedule of Stock Option Activity | Options granted, exercised, canceled and expired under the Company's stock-based comp ensation plans during the fiscal years ended May 31, 2022 and 2021 are summarized as follows: Stock Options and Stock-Based Compensation - Schedule of Stock Option Activity Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Options outstanding and exercisable - May 31, 2020 22,500 $ 1.70 6.9 $ 38,250 Options granted — — Options exercised — $ — Options forfeited/canceled — $ — Options outstanding and exercisable - May 31, 2021 22,500 $ 1.70 5.8 $ 38,250 Options granted — — Options exercised — $ — Options forfeited/canceled — $ — Options outstanding and exercisable - May 31, 2022 22,500 $ 1.70 4.8 $ 38,250 |
Stock Option and Stock-Based Compensation - Schedule of Restricted Stock Unit Activity | Number of Units Weighted- Average Price at Grant Date Aggregate Intrinsic Value Non-vested restricted stock units – May 31, 2020 55,147 $ 3.28 $ 180,882 Restricted stock units granted 76,315 4.88 372,717 Restricted stock units vested (97,225 ) 4.03 (392,199 ) Non-vested restricted stock units – May 31, 2021 34,237 $ 4.71 $ 161,400 Restricted stock units granted 19,286 4.48 86,463 Restricted stock units forfeited (7,860 ) 5.60 (44,018 ) Restricted stock units vested (35,330 ) 4.33 (153,018 ) Non-vested restricted stock units – May 31, 2022 10,333 $ 4.92 $ 50,827 |
WEIGHTED-AVERAGE SHARES AND R_2
WEIGHTED-AVERAGE SHARES AND RECONCILIATION (Tables) | 12 Months Ended |
May 31, 2022 | |
Net loss per common share: | |
Weighted-Average Shares and Reconciliation - Schedule of Earnings Per Share, Basic and Diluted | The following table is a reconciliation of the numerators and denominators of the basic and diluted per share computations for loss from continuing operations for fiscal years ended May 31, 2022 and 2021, respectively: Weighted-Average Shares and Reconciliation - Schedule of Earnings Per Share, Basic and Diluted Net Weighted-Avg Per Share (Loss) Income Shares Amount Fiscal year ended May 31, 2022 Basic earnings per share from continuing operations $ (0.97 ) Loss available to stockholders $ (3,708,844 ) 3,808,446 — Loss available to common stockholders $ (3,708,844 ) 3,808,446 $ (0.97 ) Basic earnings per share from discontinued operations $ 0.11 Income available to stockholders $ 425,108 3,808,446 — Income available to common stockholders $ 425,108 3,808,446 $ 0.11 Fiscal year ended May 31, 2021 Basic earnings per share from continuing operations $ (2.29 ) Loss available to stockholders $ (8,635,163 ) 3,765,783 Loss available to common stockholders $ (8,635,163 ) 3,765,783 $ (2.29 ) Basic earnings per share from discontinued operations $ 0.15 Income available to stockholders $ 545,491 3,765,783 — Income available to common stockholders $ 545,491 3,765,783 $ 0.15 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
Leases - Schedule of Future Minimum Lease Payments Receivable | As of May 31, 2022, minimum future lease payments receivable are as follows: Leases - Schedule of Future Minimum Lease Payments Receivable Years Ending May 31, 2023 97,807 2024 100,742 2025 103,764 2026 47,585 Total undiscounted cash flows $ 349,898 |
Leases - Schedule of Future Minimum Lease Payments for Operating Leases | The Company’s future minimum lease payments required under operating leases that have commenced as of May 31, 2022 were as follows: Leases - Schedule of Future Minimum Lease Payments for Operating Leases Years Ending May 31, 2023 $ 2,047,329 2024 2,030,688 2025 1,993,618 2026 1,782,111 2027 1,412,915 Thereafter 11,184,613 Total lease payments 20,451,274 Less: imputed interest (5,067,423 ) Present value of future lease payments 15,383,851 Less: current portion of long-term lease liabilities (1,474,463 ) Long-term lease liabilities, net of current portion $ 13,909,388 |
Leases - Schedule of Lease Terms and Discount Rates | The weighted-average remaining lease term and weighted-average discount rate for operating leases that have commenced as of May 31, 2022 are as follows: Leases - Schedule of Lease Terms and Discount Rates as of May 31, 2022 Weighted-average remaining lease term (years) 11.28 Weighted-average discount rate 4.56 % |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
May 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt - Schedule of Long-Term Debt | The Company received three PPP loans during Fiscal 2021, two of which were forgiven during the year ended May 31, 2022. The remaining outstanding PPP loan is as follows: Long-Term Debt - Schedule of Long-Term Debt Loan Amount Issuance Date Maturity Period Interest Rate Second Draw PPP Loan (Ample Hills) $ 2,000,000 April 6, 2021 5 1.0 % Total PPP Loan Balance $ 2,000,000 |
Long-Term Debt - Schedule of Debt | As of May 31, 2022 and 2021, respectively, the Company had the following current and long-term liabilities recorded for their debt obligations: Long-Term Debt - Schedule of Debt Fiscal Year Ended May 31, 2022 2021 Current portion $ 503,219 $ 541,691 Long-term portion 2,496,781 3,253,389 Total $ 3,000,000 $ 3,795,080 |
Long-Term Debt - Schedule of Maturities of Long-Term Debt | Principal payments of outstanding long-term debt as of May 31, 2022 are as follows: Long-Term Debt - Schedule of Maturities of Long-Term Debt Year ending May 31: 2023 $ 503,219 2024 1,512,389 2025 513,380 2026 471,012 Total principal payments $ 3,000,000 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
May 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets - Intangible Assets - Schedule of Finite-Lived Intangible Assets | The following table presents the major components of finite-intangible assets which are subject to amortization as of May 31, 2022 and May 31, 2021: Intangible Assets - Intangible Assets - Schedule of Finite-Lived Intangible Assets As of May 31, 2022 Useful Life (Years) Gross Carrying Value Accumulated Amortization Net Carrying Value Finite-lived intangible assets subject to amortization: Ice Cream Segment Proprietary recipes 10 $ 146,739 $ 28,555 $ 118,184 Company website 3 25,445 16,440 9,005 Ice Cream Segment finite-lived intangible assets $ 172,184 $ 44,995 $ 127,189 As of May 31, 2021 Useful Life (Years) Gross Carrying Value Accumulated Amortization Net Carrying Value Finite-lived intangible assets subject to amortization: Ice Cream Segment Proprietary recipes 10 $ 146,739 $ 13,934 $ 132,805 Company website 3 25,445 8,128 17,317 Ice Cream Segment finite-lived intangible assets $ 172,184 $ 22,062 $ 150,122 |
Intangible Assets - Schedule of Finite-Lived Intangible Assets Future Amortization Expense | Estimated amortization expense for each of the following years is as follows: Intangible Assets - Schedule of Finite-Lived Intangible Assets Future Amortization Expense Year Ending May 31, 2023 $ 22,933 2024 15,313 2025 14,621 2026 14,621 2027 14,621 Thereafter 45,080 Total expected amortization expense $ 127,189 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
May 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information - Schedule of Segment Reporting Information by Segment | Fiscal Year Ended, May 31, 2022 2021 Ice Cream Measurement Ice Cream* Measurement Net revenue $ 8,315,486 $ 1,577,724 $ 4,043,436 $ 1,557,023 Gross margin $ 4,426,579 $ 641,992 $ 1,591,207 $ 473,474 Gross margin % 53.2 % 40.7 % 39.4 % 30.4 % Operating Expenses $ 12,019,919 $ 3,664,538 $ 9,411,447 $ 3,084,856 Operating loss $ (7,593,342 ) $ (3,022,544 ) $ (7,820,240 ) $ (2,611,382 ) Depreciation expense $ 395,071 $ 19,179 $ 377,641 $ 44,223 Amortization expense $ 22,933 $ — $ 22,062 $ — Capital expenditures $ 967,757 $ 29,148 $ 1,382,959 $ 21,871 |
Segment Information - Schedule of Segment Reporting by Segment Assets | Fiscal Year Ended May 31, 2022 2021 Segment assets to total assets Ice Cream Segment $ 10,463,502 $ 10,713,832 Measurement Segment 2,245,663 2,565,701 Corporate assets 10,130,131 7,894,397 Total assets $ 22,839,296 $ 21,173,930 |
LIQUIDITY AND GOING CONCERN (De
LIQUIDITY AND GOING CONCERN (Details Narrative) - USD ($) | 2 Months Ended | ||
Jul. 18, 2022 | May 31, 2022 | May 31, 2021 | |
Subsequent Event [Line Items] | |||
Cash and cash equivalents | $ 1,050,910 | $ 4,032,690 | |
Working capital deficit, net | $ 1,822,078 | ||
Subsequent Events | |||
Subsequent Event [Line Items] | |||
Proceeds from sale of real estate | $ 3,268,533 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Customer Deposits and Prepayments (Details) - USD ($) | May 31, 2022 | May 31, 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 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Assets Held for Sale (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Long-Lived Assets Held-for-sale [Line Items] | ||
Total assets hold for sale | $ 4,123,953 | $ 4,935,404 |
Less accumulated depreciation | (1,176,325) | (2,112,038) |
Property and equipment, net | 2,947,628 | 2,823,366 |
Assets Held for Sale | ||
Long-Lived Assets Held-for-sale [Line Items] | ||
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 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | ||
May 31, 2022 USD ($) ft² | May 31, 2021 USD ($) | Nov. 10, 2021 USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Cash and cash equivalents | $ 1,050,910 | $ 4,032,690 | |
Property, Plant, and Equipment, Fair Value Disclosure | $ 5,100,000 | ||
Proceeds from Sale of Buildings | 4,753,724 | ||
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | 4,598,095 | 24,208 | |
Advertising expense | $ 38,628 | $ 63,635 | |
Assets Held for Sale | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 25 years | ||
Industrial buildings | ft² | 35,050 | ||
Furniture and Fixtures [Member] | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
Furniture and Fixtures [Member] | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 7 years | ||
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
2765 NW Nicolai Street, Portland, Oregon | Assets Held for Sale | |||
Property, Plant and Equipment [Line Items] | |||
Industrial buildings | ft² | 11,667 |
Assets Held for Sale and Oper_3
Assets Held for Sale and Operations Classified as Discontinued Operations - Schedule of Assets and Liabilities Held for Sale as Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Current liabilities | ||
Income from discontinued operations, net of tax | $ 425,108 | $ 545,491 |
Xact | ||
Current assets | ||
Accounts receivable, net | 382,361 | 425,778 |
Inventories | 282,845 | 301,888 |
Total current assets | 665,206 | 727,666 |
Property and equipment, net | 452 | 651 |
Leasehold, utilities, and ERP deposits | 394,676 | 110,253 |
Intangible assets, net | 87,152 | 187,603 |
TOTAL ASSETS | 1,147,486 | 1,026,173 |
Current liabilities | ||
Accounts payable | 180,613 | 1,783 |
Accrued payroll liabilities | 4,545 | 12,948 |
Total current liabilities | 185,158 | 14,731 |
TOTAL LIABILITIES | 185,158 | 14,731 |
Net sales | 2,069,496 | 2,263,891 |
Cost of revenue | 1,130,050 | 1,057,810 |
Gross profit | 939,446 | 1,206,081 |
General, administrative and sales | 514,338 | 647,061 |
Research & development | 13,529 | |
Total operating expenses | 514,338 | 660,590 |
Operating income | 425,108 | 545,491 |
Income before income taxes | 425,108 | 545,491 |
Income tax provision (benefit) from discontinued operations | ||
Income from discontinued operations, net of tax | $ 425,108 | $ 545,491 |
Ample Hills Business Acquisit_3
Ample Hills Business Acquisition - Schedule of Purchase Price Allocation (Details) - USD ($) | 12 Months Ended | ||
Jul. 09, 2020 | May 31, 2022 | May 31, 2021 | |
Purchase Price | |||
Cash paid to sellers | $ 1,000,000 | ||
Cure payments | 713,404 | ||
Total purchase price | 1,713,404 | ||
Assets Acquired | |||
Right-of-use operating lease assets | 10,645,098 | ||
Website | 25,445 | ||
Tradename and trademarks | 903,422 | ||
Proprietary recipes | 146,739 | ||
Security deposits | 225,180 | ||
Machinery and equipment | 564,553 | ||
Leasehold improvements | 815,798 | ||
Inventory | 632,100 | ||
Total assets acquired | 13,958,335 | ||
Liabilities Assumed | |||
Lease liabilities | 10,645,098 | ||
Deferred tax liability | 405,688 | ||
Customer deposits | 20,204 | ||
Gift card liabilities | 35,133 | ||
Total liabilities assumed | 11,106,123 | ||
Net assets acquired | 2,852,212 | ||
Gain on bargain purchase | $ 1,138,808 | $ 1,138,808 |
AMPLE HILLS BUSINESS ACQUISIT_4
AMPLE HILLS BUSINESS ACQUISITION (Details Narrative) - USD ($) | 12 Months Ended | ||
Jul. 09, 2020 | May 31, 2022 | May 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |||
Cash paid to sellers | $ 1,000,000 | ||
Cure payments | $ 713,404 | ||
Transaction costs | 125,167 | ||
Gain on bargain purchase | $ 1,138,808 | $ 1,138,808 |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Credit Loss [Abstract] | ||
Receivables | $ 838,825 | $ 775,431 |
Less: allowance for doubtful accounts | (87,274) | (46,564) |
Accounts receivable, net | $ 751,551 | $ 728,867 |
Inventories, Net - Schedule of
Inventories, Net - Schedule of Inventories, Current (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 905,376 | $ 607,825 |
Work-in-process | 64,390 | 35,160 |
Finished goods | 574,645 | 687,488 |
Total inventory | 1,544,411 | 1,330,473 |
Inventory reserves | (100,882) | (79,051) |
Inventory, net | $ 1,443,529 | $ 1,251,422 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property, Plant and Equipment, Net (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total plant and equipment | $ 4,123,953 | $ 4,935,404 |
Less accumulated depreciation | (1,176,325) | (2,112,038) |
Property and equipment, net | 2,947,628 | 2,823,366 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total plant and equipment | 0 | 159,000 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total plant and equipment | 2,072,231 | 2,989,140 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total plant and equipment | $ 2,051,722 | $ 1,787,264 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 414,250 | $ 421,864 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense Benefit (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Current provision for continued operations | $ 19,197 | $ (403,666) |
Current provision for discontinued operations | 0 | 0 |
Deferred provision | 5,167,143 | 2,203,268 |
Change in valuation allowance | (5,167,143) | (2,203,268) |
Total provision for income taxes | $ 19,197 | $ (403,666) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Basis difference for assets | $ (55,507) | $ (541,015) |
Inventory related items | 38,912 | 30,910 |
Lease right-of-use assets | 321,405 | 197,573 |
Other reserves and liabilities | 260,068 | 163,348 |
Net operating loss carryforward | 4,228,721 | 3,333,873 |
General business and other credit carry forward | 373,544 | 450,252 |
Gross deferred tax assets | 5,167,143 | 3,634,941 |
Deferred tax asset valuation allowance | (5,167,143) | (3,634,941) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal rate | 21% | 21% |
State Taxes, net of federal benefits | 12.37% | 5.80% |
Change in deferred tax valuation allowance | (47.06%) | (25.80%) |
Bargain gain | 0% | 4.80% |
R&E tax credits | 0% | 0% |
Effect of foreign income tax rates | 0% | 0% |
State minimum taxes | 0% | (0.10%) |
Permanent and other differences | 13.10% | (1.00%) |
Effective tax rate | (0.59%) | 4.70% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Effective tax rate | (0.59%) | 4.70% |
Change in valuation allowance | $ 1,532,202 | |
Change in valuation allowance | 5,167,143 | $ 2,203,268 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward | 14,532,066 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward | $ 19,984,566 |
Stock Options and Stock-Based_3
Stock Options and Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | |||
Options outstanding and exercisable | 22,500 | 22,500 | |
Weighted average exercise price | $ 1.70 | $ 1.70 | |
Weighted average remaining contractual term, years | 4 years 9 months 18 days | 5 years 9 months 18 days | 6 years 10 months 24 days |
Aggregate intrinsic value | $ 38,250 | $ 38,250 | |
Options granted | 0 | 0 | |
Weighted average exercise price, options granted | $ 0 | $ 0 | |
Options exercised | 0 | 0 | |
Weighted average exercise price, options exercised | $ 0 | $ 0 | |
Options forfeited/canceled | 0 | 0 | |
Weighted average exercise price, options forfeited/canceled | $ 0 | $ 0 | |
Options outstanding and exercisable | 22,500 | 22,500 | 22,500 |
Weighted average exercise price | $ 1.70 | $ 1.70 | $ 1.70 |
Aggregate intrinsic value | $ 38,250 | $ 38,250 | $ 38,250 |
Stock Option and Stock-Based Co
Stock Option and Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Non-vested restricted stock units | 34,237 | 55,147 |
Non-vested restricted stock units, weighted average price at grant date | $ 4.71 | $ 3.28 |
Non-vested restricted stock units, aggregate intrinsic value | $ 161,400 | $ 180,882 |
Restricted stock units granted | 19,286 | 76,315 |
Restricted stock units granted, weighted average price at grant date | $ 4.48 | $ 4.88 |
Restricted stock units granted, aggregate intrinsic value | $ 86,463 | $ 372,717 |
Restricted stock units vested | (35,330) | (97,225) |
Restricted stock units vested, weighted average price at grant date | $ 4.33 | $ 4.03 |
Restricted stock units vested, aggregate intrinsic value | $ (153,018) | $ (392,199) |
Restricted stock units forfeited | (7,860) | |
Restricted stock units forfeited, weighted average price at grant date | $ 5.60 | |
Restricted stock units forfeited, aggregate intrinsic value | $ (44,018) | |
Non-vested restricted stock units | 10,333 | 34,237 |
Non-vested restricted stock units, weighted average price at grant date | $ 4.92 | $ 4.71 |
Non-vested restricted stock units, aggregate intrinsic value | $ 50,827 | $ 161,400 |
STOCK OPTIONS AND STOCK-BASED_4
STOCK OPTIONS AND STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding stock options | 22,500 | 22,500 | 22,500 |
Weighted-average exercise price | $ 1.70 | $ 1.70 | $ 1.70 |
Number of restricted stock units granted | 19,286 | 76,315 | |
Restricted stock units, vested | 35,330 | 97,225 | |
Restricted stock units, canceled | 7,860 | ||
Restricted stock unit compensation expense | $ 119,398 | $ 266,545 | |
Compensation expense with a time vesting condition | $ 40,436 | $ 81,385 | |
Restricted Stock Units - Service-Based | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of restricted stock units granted | 19,286 | 76,315 | |
Restricted stock units granted, grant date fair value | $ 86,463 | $ 372,717 | |
Restricted stock units, vested | 35,330 | 97,225 | |
Restricted stock units, canceled | 7,860 |
Weighted-Average Shares and R_3
Weighted-Average Shares and Reconciliation - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Net loss per common share: | ||
Per share amount, basic | $ (0.97) | $ (2.29) |
Loss available to stockholders, basic | $ (3,708,844) | $ (8,635,163) |
Weighted average shares, basic | 3,808,446 | 3,765,783 |
Loss available to common stockholders | $ (3,708,844) | $ (8,635,163) |
Weighted average shares, diluted | 3,808,446 | 3,765,783 |
Per share amount, diluted | $ (0.97) | $ (2.29) |
Per share amount, discontinued operations, basic | $ 0.11 | $ 0.15 |
Income available to stockholders, discontinued operations, basic | $ 425,108 | $ 545,491 |
Weighted average shares, discontinued operations, basic | 3,808,446 | 3,765,783 |
Income available to common stockholders, discontinued operations, diluted | $ 425,108 | $ 545,491 |
Weighted average shares, discontinued operations, diluted | 3,808,446 | 3,765,783 |
Per share amount, discontinued operations, diluted | $ 0.11 | $ 0.15 |
WEIGHTED-AVERAGE SHARES AND R_4
WEIGHTED-AVERAGE SHARES AND RECONCILIATION (Details Narrative) - $ / shares | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Exercise price | $ 1.70 | $ 1.70 | $ 1.70 |
Common Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities | 22,500 | 22,500 | |
Exercise price | $ 1.70 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments Receivable (Details) - Humboldt Lease [Member] | May 31, 2022 USD ($) |
Lessee, Lease, Description [Line Items] | |
2023 | $ 97,807 |
2024 | 100,742 |
2025 | 103,764 |
2026 | 47,585 |
Total undiscounted cash flows | $ 349,898 |
Leases - Schedule of Future M_2
Leases - Schedule of Future Minimum Lease Payments for Operating Leases (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Less: current portion of long-term lease liabilities | $ (1,474,463) | $ (1,042,331) |
Other Liabilities [Member] | ||
2023 | 2,047,329 | |
2024 | 2,030,688 | |
2025 | 1,993,618 | |
2026 | 1,782,111 | |
2027 | 1,412,915 | |
Thereafter | 11,184,613 | |
Total lease payments | 20,451,274 | |
Less: imputed interest | (5,067,423) | |
Present value of future lease payments | 15,383,851 | |
Less: current portion of long-term lease liabilities | (1,474,463) | |
Long-term lease liabilities, net of current portion | $ 13,909,388 |
Leases - Schedule of Lease Term
Leases - Schedule of Lease Terms and Discount Rates (Details) | May 31, 2022 |
Leases [Abstract] | |
Weighted-average remaining lease term | 11 years 3 months 10 days |
Weighted-average discount rate | 4.56% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Lease expense | $ 1,843,932 | $ 1,438,502 |
Triple-Net Lease Agreement, Tosei America, Inc. | ||
Lessee, Lease, Description [Line Items] | ||
Lease payments | $ 23,282 | |
Term of contract | 120 months | |
Triple-Net Lease Agreement, Humboldt Lease | ||
Lessee, Lease, Description [Line Items] | ||
Lease payments | $ 3,185 | |
Term of contract | 62 months | |
Triple-Net Lease Agreement, The Second Humboldt Lease | ||
Lessee, Lease, Description [Line Items] | ||
Lease payments | $ 4,596 | |
Term of contract | 59 months |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) | 12 Months Ended | |
May 31, 2021 | May 31, 2022 | |
Debt Instrument [Line Items] | ||
Loan amount | $ 3,000,000 | |
First Draw PPP Loan | ||
Debt Instrument [Line Items] | ||
Loan amount | $ 2,000,000 | 2,000,000 |
Issuance date | Apr. 06, 2021 | |
Maturity period | 5 years | |
Interest rate | 1% | |
Paycheck Protection Program | ||
Debt Instrument [Line Items] | ||
Loan amount | $ 3,795,080 | $ 2,000,000 |
Loan amount | $ 2,000,000 |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Debt Instrument [Line Items] | ||
Current portion | $ 503,219 | $ 541,691 |
Long-term portion | 2,496,781 | 3,253,389 |
Paycheck Protection Program | ||
Debt Instrument [Line Items] | ||
Current portion | 503,219 | 541,691 |
Long-term portion | 2,496,781 | 3,253,389 |
Total | $ 3,000,000 | $ 3,795,080 |
Long-Term Debt - Schedule of Ma
Long-Term Debt - Schedule of Maturities of Long-Term Debt (Details) | May 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 503,219 |
2024 | 1,512,389 |
2025 | 513,380 |
2026 | 471,012 |
Total principal payments | $ 3,000,000 |
LONG-TERM DEBT (Details Narrati
LONG-TERM DEBT (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Apr. 13, 2022 | Aug. 28, 2021 | May 31, 2022 | May 31, 2021 | Aug. 07, 2021 | |
Debt Instrument [Line Items] | |||||
Long-term debt, outstanding | $ 3,000,000 | ||||
Repayment of debt | $ 264,476 | ||||
Interest expense | 46,828 | 19,038 | |||
Investor | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, outstanding | 1,000,000 | 0 | |||
Interest expense | 4,115 | 0 | |||
Commitment for additional capital | $ 1,300,000 | ||||
Maturity date | Oct. 28, 2023 | ||||
Interest rate terms | Drawdown terms include: 1.0% origination fee, 18-month term after drawdown, and an 8.0% payment-in-kind interest rate. | ||||
First Draw PPP Loan | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, outstanding | 2,000,000 | 2,000,000 | |||
Current liability | 503,219 | ||||
Second Draw PPP Loan | |||||
Debt Instrument [Line Items] | |||||
Forgiveness of debt | $ 588,534 | ||||
Gain on forgiveness of debt | 2,059,556 | ||||
Paycheck Protection Program | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, outstanding | 2,000,000 | 3,795,080 | |||
Interest expense | $ 42,713 | $ 19,038 |
Intangible Assets - Intangible
Intangible Assets - Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - Ice Cream - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 172,184 | $ 172,184 |
Accumulated amortization | 44,995 | 22,062 |
Net carrying value | $ 127,189 | $ 150,122 |
Proprietary Recipes | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Useful life | 10 years | 10 years |
Gross carrying value | $ 146,739 | $ 146,739 |
Accumulated amortization | 28,555 | 13,934 |
Net carrying value | $ 118,184 | $ 132,805 |
Company Website | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | 3 years |
Gross carrying value | $ 25,445 | $ 25,445 |
Accumulated amortization | 16,440 | 8,128 |
Net carrying value | $ 9,005 | $ 17,317 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets Future Amortization Expense (Details) | May 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 22,933 |
2024 | 15,313 |
2025 | 14,621 |
2026 | 14,621 |
2027 | 14,621 |
Thereafter | 45,080 |
Total expected amortization expense | $ 127,189 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment loss | $ 903,422 | |
Ice Cream | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets | 172,184 | $ 172,184 |
Accumulated amortization | 44,995 | 22,062 |
Amortization expense | $ 22,933 | $ 22,062 |
Remaining amortization period | 7 years 7 months 2 days | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives | 3 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives | 10 years |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information by Segment (Details) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Gross margin | $ 5,068,571 | $ 2,064,681 |
Operating expenses | 15,684,457 | 12,496,303 |
Operating loss | (10,615,886) | (10,431,622) |
Ice Cream | ||
Segment Reporting Information [Line Items] | ||
Revenues | 8,315,486 | 4,043,436 |
Gross margin | $ 4,426,579 | $ 1,591,207 |
Gross margin % | 53.20% | 39.40% |
Operating expenses | $ 12,019,919 | $ 9,411,447 |
Operating loss | (7,593,342) | (7,820,240) |
Depreciation expense | 395,071 | 377,641 |
Amortization expense | 22,933 | 22,062 |
Capital expenditures | 967,757 | 1,382,959 |
Measurement | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,577,724 | 1,557,023 |
Gross margin | $ 641,992 | $ 473,474 |
Gross margin % | 40.70% | 30.40% |
Operating expenses | $ 3,664,538 | $ 3,084,856 |
Operating loss | (3,022,544) | (2,611,382) |
Depreciation expense | 19,179 | 44,223 |
Amortization expense | 0 | 0 |
Capital expenditures | $ 29,148 | $ 21,871 |
Segment Information - Schedul_2
Segment Information - Schedule of Segment Reporting by Segment Assets (Details) - USD ($) | May 31, 2022 | May 31, 2021 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 22,839,296 | $ 21,173,930 |
Ice Cream | ||
Segment Reporting Information [Line Items] | ||
Total assets | 10,463,502 | 10,713,832 |
Measurement | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,245,663 | 2,565,701 |
Corporate Assets | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 10,130,131 | $ 7,894,397 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Retirement Benefits [Abstract] | ||
Matching contributions in conjunction with employee contributions to plan | $ 43,761 | $ 55,005 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Royalty expense | $ 19,429 | $ 32,106 |
Tax liability | $ 265,349 |
CUSTOMER CONCENTRATION (Details
CUSTOMER CONCENTRATION (Details Narrative) - Customer | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk | 17.80% | 2.90% |
Accounts Receivable | Discontinued Operations | ||
Concentration Risk [Line Items] | ||
Concentration risk | 43.30% | 25% |
Revenues | Discontinued Operations | ||
Concentration Risk [Line Items] | ||
Concentration risk | 11.20% | 15.40% |
OUT-OF-PERIOD ADJUSTMENTS (Deta
OUT-OF-PERIOD ADJUSTMENTS (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Increase in leasehold security deposits | $ 560,660 | $ 321,555 |
Out-Of-Period Adjustments | ||
Out-of-period adjustment | 72,000 | |
Increase in leasehold security deposits | 72,000 | |
Increase to other income | $ 72,000 | |
Decrease in stock-based compensation | 243,187 | |
Decrease in common stock | $ 243,187 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 2 Months Ended |
Jul. 18, 2022 USD ($) | |
Subsequent Events | |
Subsequent Event [Line Items] | |
Proceeds from sale of real estate | $ 3,268,533 |