10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended: November 30, 2021
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the transition period from: _____________ to _____________ Commission File Number:  000-56250

MJ Harvest, Inc.

 (Exact name of registrant as specified in its charter)

nevada	82-3400471
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation)	Identification No.)

9205 W. Russell Road, Suite 240, Las Vegas, Nevada 89139

(Address of Principal Executive Office) (Zip Code)

(954) 519-3115

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

———————

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered.
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No 

The number of shares of the issuer's Common Stock outstanding as of December 30, 2021 is 33,068,952.

1

PART I—FINANCIAL INFORMATION

Item 1.  Financial Statements. Attached after signature page.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.

Certain statements in this Report constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a differences include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development, market acceptance or installation of our products and services; changes in government regulations; availability of management and other key personnel; availability, terms and deployment of capital; relationships with third-party equipment suppliers; and worldwide political stability and economic growth. The words “believe,” “expect,” “anticipate,” “intend” and “plan” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Results of Operations

Three Months Ended November 30, 2021 compared with the Three Months Ended November 30, 2020

The narrative comparison of results of operations for the three-month periods ended November 30, 2021 and 2020, is based on the following table.

	Three Months Ended
	A			B			A-B			%
	November 30, 2021			November 30, 2020			Change			Change
REVENUE	$	48,367		$	42,307		$	6,060			14	%
COST OF REVENUE		16,240			16,953			(713	)		-4	%
Cost of revenue as a % of total revenue		34	%		40	%		-6	%
Gross Profit		32,127			25,354			6,773			27	%
Gross profit as a % of revenue		66	%		60	%		6	%
OPERATING EXPENSES
Officer and director compensation		203,785			135,000			68,785			51	%
General and administrative		38,519			17,564			20,955			119	%
Professional fees and contract services		79,372			144,171			(64,799	)		-45	%
Advertising and promotion		67,516			—			67,516			n.a.
Total operating expenses		389,192			296,735			92,457			31	%
OPERATING LOSS - CONTINUING OPERATIONS		(357,065	)		(271,381	)		(85,684	)		32	%

Revenues increased 14% in the quarter ended November 30, 2021 compared with the same period in 2020. The increase in the current quarter was largely due to direct sales efforts by our sales team. Management refocused sales efforts on the debudder products after discontinuing operations of the soils business acquired from Elevated Ag Solutions, Inc. (“Elevated”) in early October 2020. In the prior period, management had expended considerable time and effort on the soils division. The soils division was discontinued in the quarter ended November 30, 2020 and is not reflected in operating results for the periods presented above (see “Discontinued Operations”). We anticipate that the marketing focus on the debudder products will continue now that the soils division has been discontinued.

2

Total operating expenses increased in the current period primarily due to increased expenditures for advertising and promotion. In the three months ended November 30, 2021, we participated in the MJBIZCON trade show in Las Vegas and the increase in advertising for the period is attributable to trade show expenses. Officer and director compensation increased and professional fees and contract services decreased in 2021 compared with 2020, primarily due to the appointment of one of our contractors as a director in the current period and the associated reclassification of his contract fees to “Officer and director compensation.” General and administrative expenses increased in the current period compared to a year earlier, primarily driven by travel expenses associated with the Company’s investment in PPK Investment Group, Inc., and other merger and acquisition work performed during the current period.

Net loss from continuing operations increased in 2021 compared with 2020 primarily due to the increase in advertising and promotion expenses.

Six Months Ended November 30, 2021 compared with the Six Months Ended November 30, 2020

The narrative comparison of results of operations for the six-month periods ended November 30, 2021 and 2020, is based on the following table.

	Six Months Ended
	A			B			A-B			%
	November 30, 2021			November 30, 2020			Change			Change
REVENUE	$	123,052		$	73,136		$	49,916			68	%
COST OF REVENUE		36,369			30,134			6,235			21	%
Cost of revenue as a % of total revenue		30	%		41	%		-11	%
Gross Profit		86,683			43,002			43,681			102	%
Gross profit as a % of revenue		70	%		59	%		-11	%
OPERATING EXPENSES
Officer and director compensation		347,359			265,000			82,359			31	%
General and administrative		64,873			36,383			28,490			78	%
Professional fees and contract services		145,691			239,853			(94,162	)		-39	%
Advertising and promotion		347,373			—			347,373			n.a.
Total operating expenses		905,296			541,236			364,060			67	%
OPERATING LOSS - CONTINUING OPERATIONS		(818,613	)		(498,234	)		(320,379	)		64	%

Revenues increased 68% in the six-month period ended November 30, 2021 compared with the same period in 2020. Management refocused sales efforts on the debudder products after discontinuing operations of the soils business acquired from Elevated Ag Solutions, Inc. (“Elevated”) in early October 2020. In the prior period, management had expended considerable time and effort on the soils division The soils division was discontinued in the quarter ended November 30, 2020 and is not reflected in operating results for the periods presented above (see “Discontinued Operations”). We anticipate that the marketing focus on the debudder products will continue now that the soils division has been discontinued.

Total operating expenses increased in the current period, primarily due to increased expenditures for advertising and promotion. In the six-month period ended November 30, 2021, we retained a consultant to communicate with prospective funding sources, coordinate press releases, and in general assist with market awareness of the company. The cost of this program was paid partially in cash and partially in stock with an aggregate cost of $250,250. Additional advertising expenses were incurred for trade show expenses in connection with our attendance at the MJBIZCON trade show in Las Vegas. Officer and director compensation increased and professional fees and contract services decreased in 2021 compared with 2020, primarily due to the appointment of one of our contractors as a director in the current period and the associated reclassification of his contract fees to “Officer and director compensation.” General and administrative expenses increased in the current period compared to a year earlier, primarily driven by travel expenses associated with the Company’s investment in PPK Investment Group, Inc. Professional fees and contract services decreased in 2021 compared with 2020 due to efforts by the Company to move more of the marketing efforts and target acquisition due diligence costs in-house.

3

Net loss from continuing operations increased in 2021 compared with 2020 primarily due to the increase in advertising and promotion expenses.

Non-Operating Expenses.

In the three and six-month periods ended Novmeber 30, 2021, the Company incurred $132,812 and $611,458, respectively, in interest and finance expense relating to notes payable from a funding transaction on March 22, 2021. The six month amount included $550,000 in discount on notes payable. The Company had no comparable outstanding debt in the three and six-month periods ended November 30, 2020.

Discontinued Operations.

In the prior year, after operating the soils division for first four months of the year ended May 31, 2021, management undertook an in-depth assessment of Elevated Ag Solutions, Inc. (“Elevated”) and concluded that the soils division was not as represented at the time of the acquisition in January 2020, was not likely to ever operate profitably without significant revisions to operating methods and changes in personnel and was likely to create significant business questions and concerns should it be continued. Accordingly, management elected to discontinue the business acquired from Elevated. Upon discontinuation of the Elevated business, the Company entered into a settlement and unwinding agreement with Elevated and returned all assets acquired in the transaction to Elevated. During the six months ended November 30, 2020, the common stock issued in the acquisition, aggregating 1,300,000 shares out of 1,400,000 shares originally issued, were cancelled, and the Company paid a $10,000 walk-away fee. In the aggregate, the Company recognized a loss from discontinued operations of $10,000.

Operating results for the three and six-month periods ended November 30, 2020 from the discontinued operations are reflected in the following table.

	Three Month Period Ended November 30, 2020			Three and Six-Month Periods Ended November 30, 2020
Revenue	$	—		$	75,217
Cost of revenue		—			66,243
Amortization		—			13,125
Gross profit		—			(4,151	)
Loss on discontinued operations		(10,000	)		(10,000	)
	$	(10,000	)	$	(14,151	)

Liquidity and Capital Resources

Cash flow used in operating activities for the six-month period ended November 30, 2021 was $252,786 compared to $153,329 in the comparable period 2020. During the period, our total cash decreased by $99,286. Cash to fund the negative cash flow from operations was derived primarily from proceeds of advances from related parties totaling $153,500.

The Company continues to make progress in growing sales of its existing product line, but the business is not yet sufficient to support our current operating structure. Our current working capital is negative $1,159,061, based on current assets of $68,226 and current liabilities of $1,227,287. We continue to seek out potential acquisition candidates and distributorships and hope to see continuing growth in sales in the coming periods. The Company is currently reliant on funding through advances from related parties, but we have no binding agreements or commitments for such funding and no assurances can be given that such funding will continue to be available in future periods.

4

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  We incurred net losses from continuing operations of $489,877 and $1,430,071 for the three and six-month periods ended November 30, 2021, respectively, and had an accumulated deficit of $10,528,328 as of November 30, 2021. In addition, we have notes payable aggregating $900,000 that will be due on March 22, 2022.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The Company may seek to raise money for working capital purposes through a public offering of its equity capital or through a private placement of equity capital or convertible debt.  It will be important for the Company to succeed in its efforts to raise capital in this manner to further its business plan in an aggressive manner.  Raising additional capital may cause dilution to current shareholders.

COVID-19

In March 2020, COVID-19 was declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention. Its rapid spread around the world and throughout the United States prompted many countries, including the United States, to institute restrictions on travel, public gatherings and certain business operations. These restrictions significantly disrupted economic activity in the United States and Worldwide. To date, the disruption did not materially impact the Company’s financial statements. However, if the severity of the economic disruptions increase as the duration of the COVID-19 pandemic continues, the negative financial impact due to reduced demand could be significantly greater in future periods than in the first quarter.

The effects of the continued outbreak of COVID-19 and related government responses could also include extended disruptions to supply chains and capital markets, reduced labor availability and a prolonged reduction in economic activity. These effects could have a variety of adverse impacts to the Company, including our ability to operate our facilities. To date, there have been no material adverse impacts to the Company’s operations due to COVID-19.

In addition, the economic disruptions caused by COVID-19 could also adversely impact the impairment risks for certain long-lived assets, equity method investments and goodwill. Management evaluated these impairment considerations and determined that no such impairments occurred through the date of this report.

Off Balance Sheet Arrangements

None

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not required.

Item 4. Controls and Procedures.

Conclusions of Management Regarding Effectiveness of Disclosure Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operations of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) under the Exchange Act). Based on that evaluation, the CEO and the CFO have concluded that as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective as it was determined that there were material weaknesses affecting our disclosure controls and procedures.

Management of the Company believes that these material weaknesses are due primarily to the small size of the company’s accounting staff. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As the Company grows, management expects to increase the number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

5

Changes in Internal Control over Financial Reporting

There have been no changes during the quarter ended November 30, 2021 in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

PART II – OTHER INFORMATION

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended November 30, 2021, the Company issued 1,338,102 shares of common stock without registration under the Securities Act. Of these, 200,000 shares valued at $90,000 were issued to a contractor for investor relations services. An additional 566,037 shares valued at $300,000 were issued to acquire an 10% interests in WDSY LLC and Blip Holdings LLC, which own and market the Weedsy and BLVK Brands, respectively. An additional 69,245 shares ($23,571) were issued to two contractors and 102,800 shares ($35,000) were issued to three officers and directors for services. The Company also issued 400,000 shares against stock compensation payable for patent obligations incurred in 2019. All of the above shares were issued in exempt transactions under Section 4(a)(2) of the Securities Act since the recipients of the shares were persons closely associated with the Company and the issuance of the shares did not involve any public offering.

6

Item 6.  Exhibits. 

The following documents are included as exhibits to this report:

(a) Exhibits

Exhibit Number	SEC Reference Number	Title of Document
31.1	31	Section 302 Certification of Principal Executive Officer
31.2	31	Section 302 Certification of Principal Financial Officer
32.1	32	Section 1350 Certification of Principal Executive Officer
32.2	32	Section 1350 Certification of Principal Financial Officer
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase
XBRL information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement, prospectus or other document to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MJ Harvest, Inc.
Date:  January 14, 2022	By: /s/ Patrick Bilton
	Patrick Bilton, CEO
Date:  January 14, 2022	By:  /s/ Brad E. Herr
	Brad E. Herr, Chief Financial Officer

7

MJ Harvest, Inc.

Contents

	Page
FINANCIAL STATEMENTS –(Unaudited):
Consolidated balance sheets	2
Consolidated statements of operations	3
Consolidated statements of changes in stockholders’ equity (deficit)	4
Consolidated statements of cash flows	5
Notes to the consolidated financial statements	6 - 17

MJ HARVEST, INC.

Consolidated Balance Sheets

(unaudited)

	November 30, 2021			May 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	24,033		$	123,319
Accounts receivable		15,700			—
Inventory		28,493			28,159
Total current assets		68,226			151,478
NON-CURRENT ASSETS:
Investments		3,091,666			1,000,000
Fixed assets, net		8,319			10,839
Finite-lived intangible assets, net		118,334			125,834
Indefinite-lived intangible assets, net		6,000			6,000
Total non-current assets		3,224,319			1,142,673
Total Assets	$	3,292,545		$	1,294,151
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and other current liabilities	$	177,694		$	103,815
Accounts payable to related party		149,593			77,779
Notes payable, net of discount		900,000			350,000
Total Current Liabilities		1,227,287			531,594
LONG-TERM LIABILITIES:
Common stock payable		118,785			100,000
Advances from related parties		1,611,482			1,317,982
Total long-term liabilities		1,730,267			1,417,982
Total Liabilities		2,957,554			1,949,576
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock, par value $0.0001, 5,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $0.0001 par value per share, 100,000,000 shares authorized, 32,787,446 and 25,302,122 issued and outstanding, respectively		3,279			2,530
Additional paid-in capital		10,860,040			8,440,302
Accumulated deficit		(10,528,328	)		(9,098,257	)
Total stockholders’ equity (deficit)		334,991			(655,425	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	3,292,545		$	1,294,151

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

FS-2 

MJ HARVEST, INC

Consolidated Statements of Operations

(unaudited)

	Three months ended						Six months ended
	November 30, 2021			November 30, 2020			November 30, 2021			November 30, 2020
REVENUE	$	48,367		$	42,307			123,052		$	73,136
COST OF REVENUE		16,240			16,953			36,369			30,134
Gross profit		32,127			25,354			86,683			43,002
OPERATING EXPENSES:
Officer and director compensation		203,785			135,000			347,359			265,000
General and administrative		38,519			17,564			64,873			36,383
Professional fees and contract services		79,372			144,171			145,691			239,853
Advertising and promotion		67,516			—			347,373			—
Total operating expenses		389,192			296,735			905,296			541,236
NON-OPERATING EXPENSES
Interest and financing expense		132,812			—			611,458			—
NET LOSS FROM CONTINUING OPERATIONS		(489,877	)		(271,381	)		(1,430,071	)		(498,234	)
LOSS FROM DISCONTINUED OPERATIONS
Operating loss on discontinued operations		—			—			—			(4,151	)
Loss on discontinued operations		—			(10,000	)		—			(10,000	)
NET LOSS FROM DISCONTINUED OPERATIONS		—			(10,000	)		—			(14,151	)
NET LOSS	$	(489,877	)	$	(281,381	)	$	(1,430,071	)	$	(512,385	)
NET LOSS PER COMMON SHARE - Basic and diluted
From continuing operations	$	(0.02	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
From discontinued operations		—			—			—			—
Total	$	(0.02	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
WEIGHTED AVERAGE NUMBER OF COMMON  SHARES OUTSTANDING - Basic and diluted		31,955,781			22,997,841			29,163,613			22,945,071

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

FS-3 

MJ HARVEST, INC 

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) 

(unaudited)

FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2021 AND 2020

					Additional
	Common Stock				Paid-In		Accumulated
Three Month	Shares		Amount		Capital		Deficit			Total
BALANCES, August 31, 2020		22,892,874	$	2,289	$	3,763,374	$	(4,413,398	)	$	(647,735	)
Shares issued for services		158,000		16		62,944		—			62,960
Shares issued for common stock payable		296,857		30		59,541		—			59,571
Net loss		—		—		—		(281,381	)		(281,381	)
BALANCES, November 30, 2020		23,347,731		2,335		3,885,859		(4,694,779	)		(806,585	)
BALANCES, August 31, 2021		31,449,344	$	3,145	$	10,311,603	$	(10,038,451	)	$	276,297
Shares issued for common stock payable		772,065		77		248,494		—			248,571
Shares issued for investments		566,037		57		299,943					300,000
Net loss		—		—		—		(489,877	)		(489,877	)
BALANCES, November 30, 2021		32,787,446	$	3,279	$	10,860,040	$	(10,528,328	)	$	334,991
Six Month
BALANCES, May 31, 2020		22,892,874	$	2,289	$	3,763,374	$	(4,182,394	)	$	(416,731	)
Shares issued for services		454,857		46		122,485		—			122,531
Net loss		—		—		—		(512,385	)		(512,385	)
BALANCES, November 30, 2020		23,347,731		2,335		3,885,859		(4,694,779	)		(806,585	)
BALANCES May 31, 2021		25,302,122		2,530		8,440,302		(9,098,257	)		(655,425	)
Shares issued for common stock payable		400,000		40		99,960		—			100,000
Shares issued for services		547,065		55		228,766		—			228,821
Shares issued for investments		6,538,259		654		2,091,012		—			2,091,666
Net loss		—		—		—		(1,430,071	)		(1,430,071	)
BALANCES, November 30, 2021		32,787,446	$	3,279	$	10,860,040	$	(10,528,328	)	$	334,991

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

FS-4 

MJ HARVEST, INC.

Consolidated Statements of Cash Flows

(unaudited)

	Six months ended
	November 30, 2021			November 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,430,071	)	$	(512,385	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		10,020			23,145
Share based compensation		347,606			181,102
Advances to related party for services		140,000			140,000
Amortization of note payable discount		550,000			—
Changes in operating assets and liabilities:
Accounts receivable		(15,700	)		5,981
Vendor deposits		—			20,000
Inventory		(334	)		763
Payable for discontinued operations		—			8,000
Accounts payable and other current liabilities		73,879			(54,935	)
Accounts payable to related party		71,814			35,000
NET CASH (USED IN) OPERATING ACTIVITIES		(252,786	)		(153,329	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from advances by related parties		153,500			126,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		153,500			126,000
NET CHANGE IN CASH AND CASH EQUIVALENTS		(99,286	)		(27,329	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		123,319			32,343
CASH AND CASH EQUIVALENTS END OF PERIOD	$	24,033		$	5,014
Non-cash financing and investing activities:
Shares issued for common stock payable	$	100,000		$	59,571
Shares issued for investments	$	2,091,666		$	—
Shares to be cancelled on discontinued operations (Note 10)	$	—		$	336,875

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

FS-5 

MJ HARVEST, INC. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

(unaudited)

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

MJ Harvest, Inc. (the “Company”), develops, acquires, and distributes agricultural and horticultural tools and implements for sale primarily to growers and operators in the hemp and cannabis retail industry. The Company owns 100% of G4 Products LLC, (“G4”) which owns intellectual property for a patented manual debudder product line marketed under the Original 420 Brand as the Debudder Bucket Lid and Edge. The Company also owns 100% of AgroExports LLC (“Agro”) which serves as the domestic and international distribution arm for sales of agricultural and horticultural tools and implements. The Company operates its sales portal website, www.procannagro.com, for online sales of its products.

In 2019, the Company formed AgroExports.CA ULC (“Agro Canada”), a wholly owned Canadian subsidiary in order to facilitate online payments from sales in Canada. Sales in Canada are currently serviced through a fulfillment center in Toronto.

In the year ending May 31, 2021, the Company expanded its focus to include a minority investment interest in PPK Investment Group, Inc. (“PPK”), a vertically integrated cannabis company in Oklahoma that operates as a grower, harvester, processor, manufacturer and distributor of the Country Cannabis Brand of cannabis products. The investment in PPK represents a shift in focus from an agricultural implements-based business to a broader cannabis industry focus. The Company has continued to expand its cannabis focus in the current year with new investments in WDSY LLC and BLIP Holdings LLC, owners of the Weedsy and BLVK brands, respectively.

Basis of Presentation and Consolidation

The Company’s fiscal year-end is May 31. The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three and six-month periods ended November 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2022.

For further information refer to the financial statements and footnotes thereto in the Company’s audited financial statements for the year ended May 31, 2021 in the Form 10-K as filed with the Securities and Exchange Commission.

The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries Agro, G4, and Agro Canada. All subsidiaries were wholly owned in the periods presented. All intercompany transactions have been eliminated.

Going Concern

The Company has an accumulated deficit as of November 30, 2021 of $10,528,328 and negative working capital of $1,159,061. In addition, we have notes payable aggregating $900,000 that will be due on March 22, 2022.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.   The ability of the Company to continue as a going concern is dependent upon the Company’s ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

FS-6 

MJ HARVEST, INC. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

(unaudited)

Additional acquisitions and business opportunities are under consideration, but the Company has not reached agreement with any other acquisition candidates or business opportunities. Management intends to finance operating costs over the next twelve months with cash flows from operations, private placement or public offering of common stock or debt instruments, and when necessary, advances from directors and officers. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Share based compensation, impairment of long-lived assets, amortization of intangible assets, and income taxes are subject to estimates. Actual results could differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation.

New Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06 Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. The update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years and with early adoption permitted. Management is evaluating the impact of this update on the Company’s consolidated financial statements.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Revenue Recognition

The Company generates revenue based on sales of products and revenue is recognized when the Company satisfies its performance obligation by shipping products to our customers. Our products consist of agricultural tools and implements, soils, and soil additives used primarily in growing and harvesting hemp and marijuana. Shipments terms are FOB origination, and revenue is recognized when the product is delivered to the shipper by our fulfillment centers or, in the case of drop shipments of distributed products, when the products are shipped from the manufacturer. At the time the products are delivered to the shipper, no other performance obligations remain. Revenue is recognized in an amount that reflects the consideration that is received in exchange for the products shipped.

The Company accounts for shipping and handling activities as a fulfillment cost and include fees received for shipping and handling as part of the transaction price. Provision for sales incentives, discounts, and returns and allowances, if applicable, are accounted for as reductions of revenue in the period the related sales are recorded. Sales incentives, discounts and returns and allowances were not material in the periods presented in the accompanying consolidated financial statements. The Company had no warranty costs associated with the sales of its products in the periods presented in the accompanying consolidated statements of operations and no provision for warranty expenses has been included.

FS-7 

MJ HARVEST, INC. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

(unaudited)

Inventory

Inventory consists of purchased products and is stated at the lower of cost or market, with cost being determined using the average cost method. Allowances for obsolete inventory are recognized when the inventory is determined to be unsalable through the normal course of business.

Investments

Equity securities are generally measured at fair value. Unrealized gains and losses for equity securities are included in earnings. If an equity security does not have a readily determinable fair value, the Company may elect to measure the security at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. At the end of each reporting period, the Company reassesses whether an equity security without a readily determinable fair value qualifies to be measured at cost minus impairment, considers whether impairment indicators exist to evaluate whether the investment is impaired and, if so, records an impairment loss. Upon sale of an equity security, the realized gain or loss is recognized in earnings.

Intangible Assets

Intangible asset amounts are initially recognized at the acquisition date fair values of intangible assets acquired.

Finite-lived intangible assets are amortized over their useful lives. The carrying amounts of finite-lived intangible assets are evaluated for recoverability whenever events or changes in circumstances indicate that the Company may be unable to recover the asset’s carrying amount.

When there is no foreseeable limit on the period of time over which an intangible asset is expected to contribute to the cash flows of the Company, an intangible asset is determined to have an indefinite life. Indefinite life intangible assets are not amortized but tested for impairment annually or more frequently when indicators of impairment exist.

Determination of acquisition date fair values and intangible asset impairment tests require judgment. Significant judgments required to estimate the fair value of intangible assets include determining the appropriate valuation method, identifying market prices for similar type items, estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates.

Net Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses, common stock equivalents, if any, are not considered, as their effect would be anti-dilutive. During the three months ended August 31, 2021, the Company had 3,000,000 warrants outstanding which were anti-dilutive due to the net loss recognized in the period. In the three and six-month periods ended November 30, 2021, the Company had no common stock equivalents outstanding.

FS-8 

MJ HARVEST, INC. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

(unaudited)

Share-Based Payments

All transactions in which goods or services are received for the issuance of shares of the Company’s common stock are accounted for based on the fair value of the common stock issued and recognized when the board of directors authorizes the issuance.

NOTE 2 – FIXED ASSETS

Fixed assets consisted of the following at November 30, 2021 and May 31, 2021:

	November 30,			May 31,
Property & Equipment	2021			2021
Equipment - production molds	$	25,109		$	25,109
Less: Accumulated amortization		(16,790	)		(14,270	)
Net Equipment	$	8,319		$	10,839

Depreciation expense for the three and six-month periods ended November 30, 2021 were $1,260 and $2,520, respectively, and for the three and six months ended November 30, 2020 were $1,260 and $2,520, respectively.

NOTE 3 - INTANGIBLE ASSETS

The Company’s intangible assets consist of both finite and indefinite lived assets. At November 30, 2021 and May 31, 2021, intangibles assets are:

FS-9 

MJ HARVEST, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

	November 30,			May 31,
Intangibles	2021			2021
Finite lived intangibles
Patents	$	250,000		$	250,000
Less: impairment of patents		(100,000	)		(100,000	)
		150,000			150,000
Less: accumulated amortization		(31,666	)		(24,166	)
Patents, net		118,334			125,834
Non-compete agreement		—			157,000
Less: impairment of non-compete		—			(107,000	)
		—			50,000
Less: accumulated amortization		—			(6,900	)
Less: adjustment for discontinued operations		—			(43,100	)
Non-compete agreement, net		—			—
Customer relationships		—			826,000
Less: impairment of relationships		—			(551,000	)
		—			275,000
Less: accumulated amortization		—			(6,225	)
Less: adjustment for discontinued operations		—			(268,775	)
Customer relationships, net		—			—
Total finite lived intangibles		118,334			125,834
Indefinite lived intangibles
Domain names		6,000			31,000
Less: adjustment for discontinued operations		—			(25,000	)
Total domain names		6,000			6,000
Total intangibles	$	124,334		$	131,834

Amortization expense for the three and six-month periods ended November 30, 2021 were $3,750 and $7,500, respectively and for the three and six month periods ended November 30, 2020, were $3,750 and $20,625, respectively. The patents are amortized over their useful lives of ten years. Amortization of intangibles is expected to be $15,000 for each of the next five years.

On May 28, 2021, the Company acquired the domain name, MJHI.com for $6,000. The new domain name matches the Company’s stock symbol and is likely to be easier for customers and other stakeholders to remember. The domain name is an indefinite lived intangible asset and will not be amortized.

FS-10 

MJ HARVEST, INC. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

(unaudited)

NOTE 4 – INVESTMENTS

At November 30, 2021 and May 31, 2021, investments are:

	November 30,		May 31,
Investments	2021		2021
PPK Investment Group, Inc.	$	2,791,666	$	1,000,000
WDSY, LLC		200,000		—
BLIP Holdings, LLC		100,000		—
Total investments	$	3,091,666	$	1,000,000

PPK

On March 24, 2021, the Company, as lender, closed a loan to PPK Investment Group, Inc. (“PPK”) in the form of a convertible note (“Note”) in the amount of $620,000. The convertible note bore interest at 6% per annum and was due on September 1, 2021. In accordance with its terms, the Company converted the Note on May 19, 2021 into a 6.2% interest in PPK. Upon conversion, the interest accrued of $5,707 through the date of conversion was forgiven.

Upon conversion, a Securities Purchase Agreement dated March 24, 2021 (the “PPK Agreement”) became effective and the Company acquired an additional 3.8% interest in PPK (10% in total) for payment of $380,000 by issuance of 1,520,000 shares of restricted common stock of the Company. The fair value of shares was $972,800 based on the closing price of the Company’s shares of $0.64. The Company determined that the fair value of the 3.8% interest on the conversion date was $380,000 which was the negotiated price between the two parties. Thus, the Company recorded an impairment expense of $592,800 on the conversion date.

The PPK Agreement includes a put option allowing PPK to put shares of the Company’s common stock received as part of the Company’s investment in PPK, back to the Company at $0.25 per share. The put option protects PPK against a drop in the market price of the Company’s common stock below $0.25 per share. The put option may be exercised after six months from the date of the investment on May 19, 2021. Not more than 5% of the total shares held by PPK can be put back to the Company in any calendar quarter. The put option had no value at November 30, 2021 and May 31, 2021 as the Company’s common stock was trading above $0.25 on both dates.

The PPK Agreement gives the Company the right to increase its investment up to a 100% ownership interest in PPK, provided such increased ownership is in compliance with Oklahoma State cannabis licensing requirements. Terms of purchase for increased ownership of PPK will be similar to those as the initial acquisition with a combination of cash and shares of the Company’s common stock.

On August 26, 2021, the Company acquired an additional 15% interest in PPK (25% ownership in total) pursuant to a Securities Purchase Agreement with an effective date of May 19, 2021 through issuance of 5,972,222 shares of restricted common stock valued at $1,791,666 based on the closing price of the Company’s common stock on the of $0.30 per share as of August 16, 2021, the date fixed by agreement for pricing the issuance of the shares. The additional 15% acquisition under the Securities Purchase Agreement called for payment of $930,000 in cash and $570,000 in stock, but by supplemental agreement, PPK agreed to accept payment for 15% in the form of all common stock of the Company.

The Company, pursuant to the PPK Agreement, is also obligated to pay an earnout to PPK as follows:

● The Company is required to pay additional consideration to PPK for an earnout in the event the PPK business valuation at the end of a pre-determined look back period is greater than $10,000,000. For purposes of the earnout, the valuation will be based on three times earnings before interest, taxes, depreciation, and amortization (EBITDA). If EBITDA exceeds $3,333,333 in the twelve months immediately preceding the look back date of March 31, 2023, additional consideration will be owed to PPK under the earnout in an amount sufficient to equal the earnout valuation less $10,000,000 times the percentage of PPK then owned by the Company. Such additional consideration will be paid 62% in cash and 38% in shares of the Company’s common stock.

FS-11 

MJ HARVEST, INC. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

(unaudited)

● The Company also agreed to employ Ralph Clinton Pyatt III (“Clinton Pyatt”), President of PPK, to continue his role as Chief Executive Officer and President of PPK business for a period of at least three years effective May 22, 2022.

The Company also has an option to acquire the real estate that PPK utilizes in its operations. The real estate is currently under lease to PPK by an affiliated company owned by Clinton Pyatt, the President of PPK.

WDSY and BLIP

On October 8, 2021, the Company entered into two brand development agreements with WDSY, LLC (“WDSY”) and Blip Holdings, LLC (“BLIP”) for expansion of the “WEEDSY” and “BLVK” brands, respectively, into Oklahoma and South Dakota. Under the agreements, PPK will manufacture and distribute these brands in Oklahoma and South Dakota and will pay the respective companies 10% royalties on all net sales of the branded products in those territories.

On October 8, 2021, the Company acquired a 10% interest in WDSY in exchange for 377,358 shares of the Company’s common stock and a 10% interest in BLIP in exchange for 188,679 shares of the Company’s common stock. The shares to be issued were valued at the closing price of the common stock, $0.53 per share, on October 8, 2021. Additional shares may be due to WDSY and BLIP based on lookback valuations of both companies. The lookback valuations will be based on trailing twelve months sales for WDSY and trailing three-month sales for BLIP on the second anniversary of each agreement, or sooner if the agreements are terminated before the second anniversaries. At November 30, 2021, management has assessed the probability of a potential liability due under the lookback valuation provisions of WDSY and BLIP to be low and no stock payable was due.

NOTE 5 – NOTES PAYABLE

On March 22, 2021, the Company entered into agreements with AJB Capital Investments LLC (“AJB”) and SDT Holdings LLC (“SDT”) for the purchase of an aggregate of $900,000 in Promissory Notes (the “Notes”), $300,000 from AJB and $600,000 for SDT. The terms of the Notes are the same except for the dollar amounts and fees which are double for SDT compared to AJB. The terms of the Notes are described below in the aggregate.

The Notes provided for an original issue discount of 10% or $90,000, payment of legal fees of $22,500, and payment of $10,500 for due diligence fees, resulting in net proceeds to the Company of $777,000. The Notes bore interest at the rate of 12% for the period from March 22 through September 22, 2021 and bear interest at the rate of 15% from September 23, 2021 through March 22, 2022. On September 20, 2021, the Company extended the Notes for an additional six months. The Notes are now due March 21, 2022. The Notes are secured by all assets of the Company.

FS-12 

MJ HARVEST, INC. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

(unaudited)

Interest on the notes is payable in monthly installments of $11,250 ($9,000 for the first six months of the term) on the first of each month with the first payment due on April 1, 2021. An aggregate of $32,100 and $59,100 in interest was recognized as an expense on the notes in the three and six-month periods ended November 30, 2021. At November 30, 2021, $11,250 of the accrued interest was outstanding and was paid in December 2021.

In March 2021, the Company also paid a financing fee of $3,683,000 by issuance of 1,200,000 shares of its restricted common stock and 3,000,000 warrants to purchase shares that are exercisable at $0.38 per share with a three-year term expiring on March 21, 2024. The financing fee shares were valued at $1,800,000 based on the closing price of the Company’s common stock on the date of the borrowing. The warrants were valued at $1,883,000 using the Black-Scholes method based on a current stock price of $1.50 per share on the warrant issuance date, exercise price of $0.38, an expected term of three years, stock volatility of 334.5% and a discount rate of .32%. One half of the warrants were redeemable for an aggregate payment of $1.00 if the notes payable were paid in full by September 21, 2021. The Company extended the notes on September 20, 2021 for six months and the redemption provision has now expired.

In the aggregate, financing fees and original issue discount totaled $3,806,000 which is greater than the note payable balance of $900,000. As a result, the Company recorded a full discount of $900,000 against the balance of the note payable and is amortizing the discount over the term of the note. During the three and six-month periods ended November 30, 2021, the Company recognized $450,000 and $550,000 respectively, of amortization expense as interest and finance expense. The remaining amount of the financing fees of $2,906,000 was recognized as expense for the year ended May 31, 2021.

In an event of default, the remaining principal amount of the notes plus all accrued interest and any other fees then due may be converted at the sole election of the note holders into shares of the Company’s common stock.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Agreement with Borders Consulting LLC. On June 9, 2021, the Company entered into an agreement with Borders Consulting LLC (“Borders”), an unrelated third-party vendor, to provide consulting services in connection with corporate finance relations, introductions to funding sources, and to enhance the Company’s visibility in the financial markets. The agreement was for a three-month term at compensation of $50,000 per month payable in cash plus common stock aggregating 250,000 shares. The Company paid the first two months of the contract through cash payments of $70,000 and issuance of 175,000 shares of stock valued at $80,250.

On November 29, 2021, the Company reached a settlement agreement with Borders providing for a final payment of $10,000 in cash and 200,000 shares of common stock. As a result of the settlement agreement, an aggregate of $90,000 ($0.45 per share on the settlement date) was paid in during the six month period ended November 30, 2021. At November 30, 2021, the Company owed $10,000 to Borders which is included in accounts payable. The settlement agreement provides for this amount to be paid in four monthly installments commencing on December 1, 2021. Total of all payments under the initial agreement of $250,250 have been recognized as advertising and promotion on the consolidated statements of operations for the six months ended November 30, 2021.

NOTE 7 – RELATED PARTY TRANSACTIONS

At November 30, 2021 and May 31 2021, the Company had advances from and costs of services provided by related parties totaling $1,6111,482 and $1,317,982, respectively. These amounts are classified as long-term liabilities as it is anticipated they will be settled with shares of the Company’s common stock. These amounts consisted of the following:

FS-13 

MJ HARVEST, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

	Related Party Advances at		Additions During the Three Months Ended August 31, 2021				Additions During the Three Months Ended November 30, 2021				Related Party Advances at
	May 31, 2021		Advances		Services		Advances		Services		November 30, 2021
Related Parties
Patrick Bilton, CEO and Director
Cash Advances	$	928,414	$	64,000	$	—	$	87,500	$	—	$	1,079,914
Payable for services		280,000				70,000		—		70,000		420,000.0
David Tobias, Director		80,553		—		—		2,000		—		82,553.0
Jerry Cornwell, Director		29,015		—		—		—		—		29,015
Total for related parties	$	1,317,982	$	64,000	$	70,000	$	89,500	$	70,000	$	1,611,482

	Related Party Advances at		Additions During the Three Months Ended August 31, 2020				Additions During the Three Months Ended November 30, 2020				Related Party Advances at
	May 31, 2020		Advances		Services		Advances		Services		November 30, 2020
Related Parties
Patrick Bilton, CEO and Director
Cash Advances	$	726,414	$	65,000	$	—	$	55,000	$	—	$	846,414
Payable for services		—		—		—		—		140,000	$	140,000
David Tobias, Director		80,553		—		—		—		—		80,553
Jerry Cornwell, Director		23,015		1,000		—		5,000		—		29,015
Total for related parties	$	829,982	$	66,000	$	—	$	60,000	$	140,000	$	1,095,982

Nexit, Inc., a company solely owned by Brad Herr, the Company’s Chief Financial Officer, was owed $149,593 and $77,779 at November 30, 2021 and May 31, 2021, respectively, for services. These amounts are included in accounts payable to related party.

FS-14 

MJ HARVEST, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 8 – SHARE CAPITAL

In the three and six-month periods ended November 30, 2021 and November 30, 2020, shares were issued for stock payable, services and investments in the amounts set forth in the following table.

Three Months
			Value of Shares Issued for:
Three Months Ended November 30, 2021	Total Shares Issued		Stock Payable		Services		Investment and Other		Total Value		Stock Payable
Related Parties
David Tobias, Director		29,377	$	10,000	$	—	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		29,377		10,000		—		—		10,000		10,000
Brad Herr, CFO		44,066		15,000		—		—		15,000		15,000
Randy Lanier, Director		25,179		8,571						8,571		68,785
Total for related parties		127,999		43,571		—		—		43,571		103,785
Unrelated Parties		1,210,103		146,979		57,921		300,000		504,900		15,000
Aggregate Totals November 30, 2021		1,338,102	$	190,550	$	57,921	$	300,000	$	548,471	$	118,785
Three Months Ended November 30, 2020
Related Parties
David Tobias, Director		50,000	$	10,000	$	—	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		50,000		10,000		—		—		10,000		10,000
Brad Herr, CFO		75,000		15,000		—		—		15,000		15,000
Randy Lanier, Director		—		—		—		—		—		—
Total for related parties		175,000		35,000		—		—		35,000		35,000
Unrelated Parties		279,857		24,571		62,960		—		87,531		123,571
Aggregate Totals November 30, 2020		454,857	$	59,571	$	62,960	$	—	$	122,531	$	158,571

Six Months
			Value of Shares Issued for:
Six Months Ended November 30, 2021	Total Shares Issued		Stock Payable		Services		Investment and Other		Total Value		Stock Payable
Related Parties
David Tobias, Director		29,377	$	—	$	10,000	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		29,377		—		10,000		—		10,000		10,000
Brad Herr, CFO		44,066		—		15,000		—		15,000		15,000
Randy Lanier, Director		25,179		—		8,571		—		8,571		68,785
Total for related parties		127,999		—		43,571		—		43,571		103,785
Unrelated Parties		7,357,325		100,000		185,250		2,091,666		2,376,916		15,000
Aggregate Totals November 30, 2021		7,485,324	$	100,000	$	228,821	$	2,091,666	$	2,420,487	$	118,785
Six Months Ended November 30, 2020
Related Parties
David Tobias, Director		50,000	$	—	$	10,000	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		50,000		—		10,000		—		10,000		10,000
Brad Herr, CFO		75,000		—		15,000		—		15,000		15,000
Randy Lanier, Director		—		—		—		—		—		—
Total for related parties		175,000		—		35,000		—		35,000		35,000
Unrelated Parties		279,857		—		87,531		—		87,531		123,571
Aggregate Totals November 30, 2020		454,857	$	—	$	122,531	$	—	$	122,531	$	158,571

FS-15 

MJ HARVEST, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 9 – REVENUE FROM CONTINUING OPERATIONS

The Company product revenue is generated though sales of its debudder products produced by third parties and distributed by the Company. The Company’s customers, to which trade credit terms are extended, consist almost exclusively of domestic companies. The following table sets out product sales for the three and six-month periods ended November 30, 2021 and 2020, along with customer concentration information for each period.

	Three months ended November 30,
	2021			2020
Debudder product revenues	$	48,367		$	42,307
Customer concentrations
Debudder sales
Customer A	$	23,500		$	—
Customer B		23,760			—
Customer C		—			19,885
Customer D		—			12,100
Totals	$	47,260		$	31,985
% of total revenues		98	%		76	%

	Six months ended November 30,
	2021			2020
Debudder product revenues	$	123,052		$	73,136
Customer concentrations
Debudder sales
Customer A	$	37,900		$	—
Customer B		23,760			—
Customer C		14,680			34,285
Customer D		43,320			26,130
Totals	$	119,660		$	60,415
% of total revenues		97	%		83	%

All sales were domestic except international sales of $23,760 and $23,852 in the three and six-month periods ended November 30, 2021, respectively. All sales were domestic except international sales of $3,471 and $4,021 in the three and six-month periods ended November 30, 2020, respectively.

As of November 30, 2021 and May 31, 2021, there were $15,700 and nil, respectively, of accounts receivable from the Company’s primary customers.

NOTE 10 – DISCONTINUED OPERATIONS

In the year ended May 31, 2021, the Company unwound its acquisition of assets from Elevated Ag Solutions, Inc. As a result of the unwinding, the net income (loss) from the Elevated business segment is included in Discontinued Operations in the statements of operations for all periods presented. As a result of the unwinding in the year ended May 31, 2021, the Company reversed the acquisition of intangible assets, cancelled 1,300,000 out of the 1,400,000 shares of common stock that were issued in the acquisition, and paid a $10,000 walk-away fee to the prior owners.

FS-16 

MJ HARVEST, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Discontinued operations operating results for the three and six month periods ended November 30, 2021 and 2020 are reflected in the following tables.

	Three and Six-Month Periods Ended November 30, 2021		Three and Six-Month Periods Ended November 30, 2020
Revenue	$	—	$	75,217
Cost of revenue		—		66,243
Amortization		—		13,125
Gross profit		—		(4,151	)
Loss on discontinued operations		—		10,000
	$	—	$	(14,151	)

NOTE 11 – IMPACT OF COVID-19

In March 2020, COVID-19 was declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention. Its rapid spread around the world and throughout the United States prompted many countries, including the United States, to institute restrictions on travel, public gatherings and certain business operations. These restrictions significantly disrupted economic activity in the United States and Worldwide. As of November 30, 2021 and through the date of filing of this Form 10-Q, the disruption did not materially impact the Company’s financial statements.

The effects of the continued outbreak of COVID-19 and related government responses could include extended disruptions to supply chains and capital markets, reduced labor availability and a prolonged reduction in economic activity. These effects could have a variety of adverse impacts to the Company, including our ability to operate. As of November 30, 2021 there were no material adverse impacts to the Company’s operations due to COVID-19.

The economic disruptions caused by COVID-19 could also adversely impact the impairment risks for certain long-lived assets. Management evaluated these impairment considerations and determined that no such impairments occurred as of May 31, 2021 or through the date of filing this Form 10-Q.

NOTE 12 – SUBSEQUENT EVENTS

On December 1, 2021, the Company issued 167,796 shares of common stock valued at $83,785 to non-related parties and 87,500 shares of common stock valued at $$35,000 to officers and directors for stock payable at November 30, 2021 relating to services rendered in the quarter ended November 30, 2021. The shares were valued based on the closing price of the Company’s common stock on the OTCQB Market on dates the shares were authorized to be issued.

FS-17 

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Patrick Bilton, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of MJ Harvest, Inc., (the “Registrant”) for the quarter ended November 30, 2021;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.   The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) omitted (the Registrant is not yet subject to internal control over financial reporting requirements);

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.   The Registrant’s other certifying officer(s) and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	January 14, 2022	By:	/s/ Patrick Bilton
			CEO (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brad E. Herr, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of MJ Harvest, Inc., (the “Registrant”) for the quarter ended November 30, 2021;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.   The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) omitted (the Registrant is not yet subject to internal control over financial reporting requirements);

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.   The Registrant’s other certifying officer(s) and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	January 14, 2022	By:	/s/ Brad E. Herr
			Brad E. Herr, CFO (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MJ Harvest, Inc. (the "Registrant") on Form 10-Q for the quarter ended November 30, 2021, as filed with the Commission on the date hereof (the "Quarterly Report"), I, Patrick Bilton, Principal Executive Officer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: January 14, 2022

/s/ Patrick Bilton

Patrick Bilton, CEO

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MJ Harvest, Inc. (the "Registrant") on Form 10-Q for the quarter ended November 30, 2021, as filed with the Commission on the date hereof (the "Quarterly Report"), I, Brad E. Herr, Principal Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: January 14, 2022

/s/ Brad E. Herr

Brad E. Herr, CFO

(Principal Financial Officer)

XML

Cover - shares	6 Months Ended
	Nov. 30, 2021	Dec. 30, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Nov. 30, 2021
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Current Fiscal Year End Date	--05-31
Entity File Number	000-56250
Entity Registrant Name	MJ Harvest, Inc.
Entity Central Index Key	0001789330
Entity Tax Identification Number	82-3400471
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	9205 W. Russell Road
Entity Address, Address Line Two	Suite 240
Entity Address, City or Town	Las Vegas
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89139
City Area Code	(954)
Local Phone Number	519-3115
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		33,068,952

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Nov. 30, 2021	May 31, 2021
CURRENT ASSETS:
Cash and cash equivalents	$ 24,033	$ 123,319
Accounts receivable	15,700
Inventory	28,493	28,159
Total current assets	68,226	151,478
Investments	3,091,666	1,000,000
Fixed assets, net	8,319	10,839
Finite-lived intangible assets, net	118,334	125,834
Indefinite-lived intangible assets, net	6,000	6,000
Total non-current assets	3,224,319	1,142,673
Total Assets	3,292,545	1,294,151
CURRENT LIABILITIES:
Accounts payable and other current liabilities	177,694	103,815
Accounts payable to related party	149,593	77,779
Notes payable, net of discount	900,000	350,000
Total Current Liabilities	1,227,287	531,594
LONG-TERM LIABILITIES:
Common stock payable	118,785	100,000
Advances from related parties	1,611,482	1,317,982
Total long-term liabilities	1,730,267	1,417,982
Total Liabilities	2,957,554	1,949,576
Preferred stock, par value $0.0001, 5,000,000 shares authorized, no shares issued and outstanding
Common stock, $0.0001 par value per share, 100,000,000 shares authorized, 32,787,446 and 25,302,122 issued and outstanding, respectively	3,279	2,530
Additional paid-in capital	10,860,040	8,440,302
Accumulated deficit	(10,528,328)	(9,098,257)
Total stockholders’ equity (deficit)	334,991	(655,425)
Total Liabilities and Stockholders’ Equity (Deficit)	$ 3,292,545	$ 1,294,151

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Nov. 30, 2021	May 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred shares authorized	5,000,000	5,000,000
Preferred shares issued	0	0
Preferred shares outstanding	0	0
Common stock par value	$ 0.0001	$ 0.0001
Common stock shares authorized	100,000,000	100,000,000
Common stock shares issued	32,787,446	25,302,122
Common stock shares outstanding	32,787,446	25,302,122

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2021	Nov. 30, 2020	Nov. 30, 2021	Nov. 30, 2020
Income Statement [Abstract]
REVENUE	$ 48,367	$ 42,307	$ 123,052	$ 73,136
COST OF REVENUE	16,240	16,953	36,369	30,134
Gross profit	32,127	25,354	86,683	43,002
OPERATING EXPENSES:
Officer and director compensation	203,785	135,000	347,359	265,000
General and administrative	38,519	17,564	64,873	36,383
Professional fees and contract services	79,372	144,171	145,691	239,853
Advertising and promotion	67,516		347,373
Total operating expenses	389,192	296,735	905,296	541,236
NON-OPERATING EXPENSES
Interest and financing expense	132,812		611,458
NET LOSS FROM CONTINUING OPERATIONS	(489,877)	(271,381)	(1,430,071)	(498,234)
LOSS FROM DISCONTINUED OPERATIONS
Operating loss on discontinued operations				(4,151)
Loss on discontinued operations		(10,000)		(10,000)
NET LOSS FROM DISCONTINUED OPERATIONS		(10,000)		(14,151)
NET LOSS	$ (489,877)	$ (281,381)	$ (1,430,071)	$ (512,385)
From continuing operations	$ (0.02)	$ (0.01)	$ (0.05)	$ (0.02)
From discontinued operations
WEIGHTED AVERAGE NUMBER OF COMMON  SHARES OUTSTANDING - Basic and diluted	31,955,781	22,997,841	29,163,613	22,945,071

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY ( DEFICIT) (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
BALANCES May 31, 2021 at May. 31, 2020	$ 2,289	$ 3,763,374	$ (4,182,394)	$ (416,731)
Beginning Balance, Shares at May. 31, 2020	22,892,874
Net loss			(512,385)	(512,385)
Shares issued for services	46	122,485		122,531
BALANCES, November 30, 2021 at Nov. 30, 2020	$ 2,335	3,885,859	(4,694,779)	(806,585)
Shares issued for services	454,857
Ending Balance, Shares at Nov. 30, 2020	23,347,731
BALANCES May 31, 2021 at Aug. 31, 2020	$ 2,289	3,763,374	(4,413,398)	(647,735)
Beginning Balance, Shares at Aug. 31, 2020	22,892,874
Net loss			(281,381)	(281,381)
Shares issued for services	16	62,944		62,960
BALANCES, November 30, 2021 at Nov. 30, 2020	$ 2,335	3,885,859	(4,694,779)	(806,585)
Shares issued for common stock payable	296,857
Shares issued for services	158,000
Shares issued for common stock payable	$ 30	59,541		59,571
Ending Balance, Shares at Nov. 30, 2020	23,347,731
BALANCES May 31, 2021 at May. 31, 2021	$ 2,530	8,440,302	(9,098,257)	(655,425)
Beginning Balance, Shares at May. 31, 2021	25,302,122
Net loss			(1,430,071)	(1,430,071)
Shares issued for services	55	228,766		228,821
Shares issued for investments	$ 654	2,091,012		2,091,666
Shares issued for investments	6,538,259
BALANCES, November 30, 2021 at Nov. 30, 2021	$ 3,279	10,860,040	(10,528,328)	334,991
Shares issued for common stock payable	400,000
Shares issued for services	547,065
Shares issued for common stock payable	$ 40	99,960		100,000
Ending Balance, Shares at Nov. 30, 2021	32,787,446
BALANCES May 31, 2021 at Aug. 31, 2021	$ 3,145	10,311,603	(10,038,451)	276,297
Beginning Balance, Shares at Aug. 31, 2021	31,449,344
Net loss			(489,877)	(489,877)
Shares issued for investments	$ 57	299,943		300,000
Shares issued for investments	566,037
BALANCES, November 30, 2021 at Nov. 30, 2021	$ 3,279	10,860,040	(10,528,328)	334,991
Shares issued for common stock payable	772,065
Shares issued for common stock payable	$ 77	$ 248,494		$ 248,571
Ending Balance, Shares at Nov. 30, 2021	32,787,446

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (1,430,071)	$ (512,385)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	10,020	23,145
Share based compensation	347,606	181,102
Advances to related party for services	140,000	140,000
Amortization of note payable discount	550,000
Changes in operating assets and liabilities:
Accounts receivable	(15,700)	5,981
Vendor deposits		20,000
Inventory	(334)	763
Payable for discontinued operations		8,000
Accounts payable and other current liabilities	73,879	(54,935)
Accounts payable to related party	71,814	35,000
NET CASH (USED IN) OPERATING ACTIVITIES	(252,786)	(153,329)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from advances by related parties	153,500	126,000
NET CASH PROVIDED BY FINANCING ACTIVITIES	153,500	126,000
NET CHANGE IN CASH AND CASH EQUIVALENTS	(99,286)	(27,329)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	123,319	32,343
CASH AND CASH EQUIVALENTS END OF PERIOD	24,033	5,014
Non-cash financing and investing activities:
Shares issued for common stock payable	100,000	59,571
Shares issued for investments	2,091,666
Shares to be cancelled on discontinued operations (Note 10)		$ 336,875

XML

NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Nov. 30, 2021

Accounting Policies [Abstract]

NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

MJ Harvest, Inc. (the “Company”), develops, acquires, and distributes agricultural and horticultural tools and implements for sale primarily to growers and operators in the hemp and cannabis retail industry. The Company owns 100% of G4 Products LLC, (“G4”) which owns intellectual property for a patented manual debudder product line marketed under the Original 420 Brand as the Debudder Bucket Lid and Edge. The Company also owns 100% of AgroExports LLC (“Agro”) which serves as the domestic and international distribution arm for sales of agricultural and horticultural tools and implements. The Company operates its sales portal website, www.procannagro.com, for online sales of its products.

In 2019, the Company formed AgroExports.CA ULC (“Agro Canada”), a wholly owned Canadian subsidiary in order to facilitate online payments from sales in Canada. Sales in Canada are currently serviced through a fulfillment center in Toronto.

In the year ending May 31, 2021, the Company expanded its focus to include a minority investment interest in PPK Investment Group, Inc. (“PPK”), a vertically integrated cannabis company in Oklahoma that operates as a grower, harvester, processor, manufacturer and distributor of the Country Cannabis Brand of cannabis products. The investment in PPK represents a shift in focus from an agricultural implements-based business to a broader cannabis industry focus. The Company has continued to expand its cannabis focus in the current year with new investments in WDSY LLC and BLIP Holdings LLC, owners of the Weedsy and BLVK brands, respectively.

Basis of Presentation and Consolidation

The Company’s fiscal year-end is May 31. The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three and six-month periods ended November 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2022.

For further information refer to the financial statements and footnotes thereto in the Company’s audited financial statements for the year ended May 31, 2021 in the Form 10-K as filed with the Securities and Exchange Commission.

The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries Agro, G4, and Agro Canada. All subsidiaries were wholly owned in the periods presented. All intercompany transactions have been eliminated.

Going Concern

The Company has an accumulated deficit as of November 30, 2021 of $10,528,328 and negative working capital of $1,159,061. In addition, we have notes payable aggregating $900,000 that will be due on March 22, 2022.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.   The ability of the Company to continue as a going concern is dependent upon the Company’s ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

Additional acquisitions and business opportunities are under consideration, but the Company has not reached agreement with any other acquisition candidates or business opportunities. Management intends to finance operating costs over the next twelve months with cash flows from operations, private placement or public offering of common stock or debt instruments, and when necessary, advances from directors and officers. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Share based compensation, impairment of long-lived assets, amortization of intangible assets, and income taxes are subject to estimates. Actual results could differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation.

New Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06 Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. The update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years and with early adoption permitted. Management is evaluating the impact of this update on the Company’s consolidated financial statements.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Revenue Recognition

The Company generates revenue based on sales of products and revenue is recognized when the Company satisfies its performance obligation by shipping products to our customers. Our products consist of agricultural tools and implements, soils, and soil additives used primarily in growing and harvesting hemp and marijuana. Shipments terms are FOB origination, and revenue is recognized when the product is delivered to the shipper by our fulfillment centers or, in the case of drop shipments of distributed products, when the products are shipped from the manufacturer. At the time the products are delivered to the shipper, no other performance obligations remain. Revenue is recognized in an amount that reflects the consideration that is received in exchange for the products shipped.

The Company accounts for shipping and handling activities as a fulfillment cost and include fees received for shipping and handling as part of the transaction price. Provision for sales incentives, discounts, and returns and allowances, if applicable, are accounted for as reductions of revenue in the period the related sales are recorded. Sales incentives, discounts and returns and allowances were not material in the periods presented in the accompanying consolidated financial statements. The Company had no warranty costs associated with the sales of its products in the periods presented in the accompanying consolidated statements of operations and no provision for warranty expenses has been included.

Inventory

Inventory consists of purchased products and is stated at the lower of cost or market, with cost being determined using the average cost method. Allowances for obsolete inventory are recognized when the inventory is determined to be unsalable through the normal course of business.

Investments

Equity securities are generally measured at fair value. Unrealized gains and losses for equity securities are included in earnings. If an equity security does not have a readily determinable fair value, the Company may elect to measure the security at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. At the end of each reporting period, the Company reassesses whether an equity security without a readily determinable fair value qualifies to be measured at cost minus impairment, considers whether impairment indicators exist to evaluate whether the investment is impaired and, if so, records an impairment loss. Upon sale of an equity security, the realized gain or loss is recognized in earnings.

Intangible Assets

Intangible asset amounts are initially recognized at the acquisition date fair values of intangible assets acquired.

Finite-lived intangible assets are amortized over their useful lives. The carrying amounts of finite-lived intangible assets are evaluated for recoverability whenever events or changes in circumstances indicate that the Company may be unable to recover the asset’s carrying amount.

When there is no foreseeable limit on the period of time over which an intangible asset is expected to contribute to the cash flows of the Company, an intangible asset is determined to have an indefinite life. Indefinite life intangible assets are not amortized but tested for impairment annually or more frequently when indicators of impairment exist.

Determination of acquisition date fair values and intangible asset impairment tests require judgment. Significant judgments required to estimate the fair value of intangible assets include determining the appropriate valuation method, identifying market prices for similar type items, estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates.

Net Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses, common stock equivalents, if any, are not considered, as their effect would be anti-dilutive. During the three months ended August 31, 2021, the Company had 3,000,000 warrants outstanding which were anti-dilutive due to the net loss recognized in the period. In the three and six-month periods ended November 30, 2021, the Company had no common stock equivalents outstanding.

Share-Based Payments

All transactions in which goods or services are received for the issuance of shares of the Company’s common stock are accounted for based on the fair value of the common stock issued and recognized when the board of directors authorizes the issuance.

XML

FIXED ASSETS

6 Months Ended

Nov. 30, 2021

Property, Plant and Equipment [Abstract]

FIXED ASSETS

NOTE 2 – FIXED ASSETS

Fixed assets consisted of the following at November 30, 2021 and May 31, 2021:

	November 30,			May 31,
Property & Equipment	2021			2021
Equipment - production molds	$	25,109		$	25,109
Less: Accumulated amortization		(16,790	)		(14,270	)
Net Equipment	$	8,319		$	10,839

Depreciation expense for the three and six-month periods ended November 30, 2021 were $1,260 and $2,520, respectively, and for the three and six months ended November 30, 2020 were $1,260 and $2,520, respectively.

XML

INTANGIBLE ASSETS

6 Months Ended

Nov. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 3 - INTANGIBLE ASSETS

The Company’s intangible assets consist of both finite and indefinite lived assets. At November 30, 2021 and May 31, 2021, intangibles assets are:

	November 30,			May 31,
Intangibles	2021			2021
Finite lived intangibles
Patents	$	250,000		$	250,000
Less: impairment of patents		(100,000	)		(100,000	)
		150,000			150,000
Less: accumulated amortization		(31,666	)		(24,166	)
Patents, net		118,334			125,834
Non-compete agreement		—			157,000
Less: impairment of non-compete		—			(107,000	)
		—			50,000
Less: accumulated amortization		—			(6,900	)
Less: adjustment for discontinued operations		—			(43,100	)
Non-compete agreement, net		—			—
Customer relationships		—			826,000
Less: impairment of relationships		—			(551,000	)
		—			275,000
Less: accumulated amortization		—			(6,225	)
Less: adjustment for discontinued operations		—			(268,775	)
Customer relationships, net		—			—
Total finite lived intangibles		118,334			125,834
Indefinite lived intangibles
Domain names		6,000			31,000
Less: adjustment for discontinued operations		—			(25,000	)
Total domain names		6,000			6,000
Total intangibles	$	124,334		$	131,834

Amortization expense for the three and six-month periods ended November 30, 2021 were $3,750 and $7,500, respectively and for the three and six month periods ended November 30, 2020, were $3,750 and $20,625, respectively. The patents are amortized over their useful lives of ten years. Amortization of intangibles is expected to be $15,000 for each of the next five years.

On May 28, 2021, the Company acquired the domain name, MJHI.com for $6,000. The new domain name matches the Company’s stock symbol and is likely to be easier for customers and other stakeholders to remember. The domain name is an indefinite lived intangible asset and will not be amortized.

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NVESTMENTS

6 Months Ended

Nov. 30, 2021

Nvestments

NVESTMENTS

NOTE 4 – INVESTMENTS

At November 30, 2021 and May 31, 2021, investments are:

	November 30,		May 31,
Investments	2021		2021
PPK Investment Group, Inc.	$	2,791,666	$	1,000,000
WDSY, LLC		200,000		—
BLIP Holdings, LLC		100,000		—
Total investments	$	3,091,666	$	1,000,000

PPK

On March 24, 2021, the Company, as lender, closed a loan to PPK Investment Group, Inc. (“PPK”) in the form of a convertible note (“Note”) in the amount of $620,000. The convertible note bore interest at 6% per annum and was due on September 1, 2021. In accordance with its terms, the Company converted the Note on May 19, 2021 into a 6.2% interest in PPK. Upon conversion, the interest accrued of $5,707 through the date of conversion was forgiven.

Upon conversion, a Securities Purchase Agreement dated March 24, 2021 (the “PPK Agreement”) became effective and the Company acquired an additional 3.8% interest in PPK (10% in total) for payment of $380,000 by issuance of 1,520,000 shares of restricted common stock of the Company. The fair value of shares was $972,800 based on the closing price of the Company’s shares of $0.64. The Company determined that the fair value of the 3.8% interest on the conversion date was $380,000 which was the negotiated price between the two parties. Thus, the Company recorded an impairment expense of $592,800 on the conversion date.

The PPK Agreement includes a put option allowing PPK to put shares of the Company’s common stock received as part of the Company’s investment in PPK, back to the Company at $0.25 per share. The put option protects PPK against a drop in the market price of the Company’s common stock below $0.25 per share. The put option may be exercised after six months from the date of the investment on May 19, 2021. Not more than 5% of the total shares held by PPK can be put back to the Company in any calendar quarter. The put option had no value at November 30, 2021 and May 31, 2021 as the Company’s common stock was trading above $0.25 on both dates.

The PPK Agreement gives the Company the right to increase its investment up to a 100% ownership interest in PPK, provided such increased ownership is in compliance with Oklahoma State cannabis licensing requirements. Terms of purchase for increased ownership of PPK will be similar to those as the initial acquisition with a combination of cash and shares of the Company’s common stock.

On August 26, 2021, the Company acquired an additional 15% interest in PPK (25% ownership in total) pursuant to a Securities Purchase Agreement with an effective date of May 19, 2021 through issuance of 5,972,222 shares of restricted common stock valued at $1,791,666 based on the closing price of the Company’s common stock on the of $0.30 per share as of August 16, 2021, the date fixed by agreement for pricing the issuance of the shares. The additional 15% acquisition under the Securities Purchase Agreement called for payment of $930,000 in cash and $570,000 in stock, but by supplemental agreement, PPK agreed to accept payment for 15% in the form of all common stock of the Company.

The Company, pursuant to the PPK Agreement, is also obligated to pay an earnout to PPK as follows:

● The Company is required to pay additional consideration to PPK for an earnout in the event the PPK business valuation at the end of a pre-determined look back period is greater than $10,000,000. For purposes of the earnout, the valuation will be based on three times earnings before interest, taxes, depreciation, and amortization (EBITDA). If EBITDA exceeds $3,333,333 in the twelve months immediately preceding the look back date of March 31, 2023, additional consideration will be owed to PPK under the earnout in an amount sufficient to equal the earnout valuation less $10,000,000 times the percentage of PPK then owned by the Company. Such additional consideration will be paid 62% in cash and 38% in shares of the Company’s common stock.

● The Company also agreed to employ Ralph Clinton Pyatt III (“Clinton Pyatt”), President of PPK, to continue his role as Chief Executive Officer and President of PPK business for a period of at least three years effective May 22, 2022.

The Company also has an option to acquire the real estate that PPK utilizes in its operations. The real estate is currently under lease to PPK by an affiliated company owned by Clinton Pyatt, the President of PPK.

WDSY and BLIP

On October 8, 2021, the Company entered into two brand development agreements with WDSY, LLC (“WDSY”) and Blip Holdings, LLC (“BLIP”) for expansion of the “WEEDSY” and “BLVK” brands, respectively, into Oklahoma and South Dakota. Under the agreements, PPK will manufacture and distribute these brands in Oklahoma and South Dakota and will pay the respective companies 10% royalties on all net sales of the branded products in those territories.

On October 8, 2021, the Company acquired a 10% interest in WDSY in exchange for 377,358 shares of the Company’s common stock and a 10% interest in BLIP in exchange for 188,679 shares of the Company’s common stock. The shares to be issued were valued at the closing price of the common stock, $0.53 per share, on October 8, 2021. Additional shares may be due to WDSY and BLIP based on lookback valuations of both companies. The lookback valuations will be based on trailing twelve months sales for WDSY and trailing three-month sales for BLIP on the second anniversary of each agreement, or sooner if the agreements are terminated before the second anniversaries. At November 30, 2021, management has assessed the probability of a potential liability due under the lookback valuation provisions of WDSY and BLIP to be low and no stock payable was due.

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NOTES PAYABLE

6 Months Ended

Nov. 30, 2021

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTE 5 – NOTES PAYABLE

On March 22, 2021, the Company entered into agreements with AJB Capital Investments LLC (“AJB”) and SDT Holdings LLC (“SDT”) for the purchase of an aggregate of $900,000 in Promissory Notes (the “Notes”), $300,000 from AJB and $600,000 for SDT. The terms of the Notes are the same except for the dollar amounts and fees which are double for SDT compared to AJB. The terms of the Notes are described below in the aggregate.

The Notes provided for an original issue discount of 10% or $90,000, payment of legal fees of $22,500, and payment of $10,500 for due diligence fees, resulting in net proceeds to the Company of $777,000. The Notes bore interest at the rate of 12% for the period from March 22 through September 22, 2021 and bear interest at the rate of 15% from September 23, 2021 through March 22, 2022. On September 20, 2021, the Company extended the Notes for an additional six months. The Notes are now due March 21, 2022. The Notes are secured by all assets of the Company.

Interest on the notes is payable in monthly installments of $11,250 ($9,000 for the first six months of the term) on the first of each month with the first payment due on April 1, 2021. An aggregate of $32,100 and $59,100 in interest was recognized as an expense on the notes in the three and six-month periods ended November 30, 2021. At November 30, 2021, $11,250 of the accrued interest was outstanding and was paid in December 2021.

In March 2021, the Company also paid a financing fee of $3,683,000 by issuance of 1,200,000 shares of its restricted common stock and 3,000,000 warrants to purchase shares that are exercisable at $0.38 per share with a three-year term expiring on March 21, 2024. The financing fee shares were valued at $1,800,000 based on the closing price of the Company’s common stock on the date of the borrowing. The warrants were valued at $1,883,000 using the Black-Scholes method based on a current stock price of $1.50 per share on the warrant issuance date, exercise price of $0.38, an expected term of three years, stock volatility of 334.5% and a discount rate of .32%. One half of the warrants were redeemable for an aggregate payment of $1.00 if the notes payable were paid in full by September 21, 2021. The Company extended the notes on September 20, 2021 for six months and the redemption provision has now expired.

In the aggregate, financing fees and original issue discount totaled $3,806,000 which is greater than the note payable balance of $900,000. As a result, the Company recorded a full discount of $900,000 against the balance of the note payable and is amortizing the discount over the term of the note. During the three and six-month periods ended November 30, 2021, the Company recognized $450,000 and $550,000 respectively, of amortization expense as interest and finance expense. The remaining amount of the financing fees of $2,906,000 was recognized as expense for the year ended May 31, 2021.

In an event of default, the remaining principal amount of the notes plus all accrued interest and any other fees then due may be converted at the sole election of the note holders into shares of the Company’s common stock.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Nov. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Agreement with Borders Consulting LLC. On June 9, 2021, the Company entered into an agreement with Borders Consulting LLC (“Borders”), an unrelated third-party vendor, to provide consulting services in connection with corporate finance relations, introductions to funding sources, and to enhance the Company’s visibility in the financial markets. The agreement was for a three-month term at compensation of $50,000 per month payable in cash plus common stock aggregating 250,000 shares. The Company paid the first two months of the contract through cash payments of $70,000 and issuance of 175,000 shares of stock valued at $80,250.

On November 29, 2021, the Company reached a settlement agreement with Borders providing for a final payment of $10,000 in cash and 200,000 shares of common stock. As a result of the settlement agreement, an aggregate of $90,000 ($0.45 per share on the settlement date) was paid in during the six month period ended November 30, 2021. At November 30, 2021, the Company owed $10,000 to Borders which is included in accounts payable. The settlement agreement provides for this amount to be paid in four monthly installments commencing on December 1, 2021. Total of all payments under the initial agreement of $250,250 have been recognized as advertising and promotion on the consolidated statements of operations for the six months ended November 30, 2021.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Nov. 30, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

At November 30, 2021 and May 31 2021, the Company had advances from and costs of services provided by related parties totaling $1,6111,482 and $1,317,982, respectively. These amounts are classified as long-term liabilities as it is anticipated they will be settled with shares of the Company’s common stock. These amounts consisted of the following:

	Related Party Advances at		Additions During the Three Months Ended August 31, 2021				Additions During the Three Months Ended November 30, 2021				Related Party Advances at
	May 31, 2021		Advances		Services		Advances		Services		November 30, 2021
Related Parties
Patrick Bilton, CEO and Director
Cash Advances	$	928,414	$	64,000	$	—	$	87,500	$	—	$	1,079,914
Payable for services		280,000				70,000		—		70,000		420,000.0
David Tobias, Director		80,553		—		—		2,000		—		82,553.0
Jerry Cornwell, Director		29,015		—		—		—		—		29,015
Total for related parties	$	1,317,982	$	64,000	$	70,000	$	89,500	$	70,000	$	1,611,482

	Related Party Advances at		Additions During the Three Months Ended August 31, 2020				Additions During the Three Months Ended November 30, 2020				Related Party Advances at
	May 31, 2020		Advances		Services		Advances		Services		November 30, 2020
Related Parties
Patrick Bilton, CEO and Director
Cash Advances	$	726,414	$	65,000	$	—	$	55,000	$	—	$	846,414
Payable for services		—		—		—		—		140,000	$	140,000
David Tobias, Director		80,553		—		—		—		—		80,553
Jerry Cornwell, Director		23,015		1,000		—		5,000		—		29,015
Total for related parties	$	829,982	$	66,000	$	—	$	60,000	$	140,000	$	1,095,982

Nexit, Inc., a company solely owned by Brad Herr, the Company’s Chief Financial Officer, was owed $149,593 and $77,779 at November 30, 2021 and May 31, 2021, respectively, for services. These amounts are included in accounts payable to related party.

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SHARE CAPITAL

6 Months Ended

Nov. 30, 2021

Equity [Abstract]

SHARE CAPITAL

NOTE 8 – SHARE CAPITAL

In the three and six-month periods ended November 30, 2021 and November 30, 2020, shares were issued for stock payable, services and investments in the amounts set forth in the following table.

Three Months
			Value of Shares Issued for:
Three Months Ended November 30, 2021	Total Shares Issued		Stock Payable		Services		Investment and Other		Total Value		Stock Payable
Related Parties
David Tobias, Director		29,377	$	10,000	$	—	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		29,377		10,000		—		—		10,000		10,000
Brad Herr, CFO		44,066		15,000		—		—		15,000		15,000
Randy Lanier, Director		25,179		8,571						8,571		68,785
Total for related parties		127,999		43,571		—		—		43,571		103,785
Unrelated Parties		1,210,103		146,979		57,921		300,000		504,900		15,000
Aggregate Totals November 30, 2021		1,338,102	$	190,550	$	57,921	$	300,000	$	548,471	$	118,785
Three Months Ended November 30, 2020
Related Parties
David Tobias, Director		50,000	$	10,000	$	—	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		50,000		10,000		—		—		10,000		10,000
Brad Herr, CFO		75,000		15,000		—		—		15,000		15,000
Randy Lanier, Director		—		—		—		—		—		—
Total for related parties		175,000		35,000		—		—		35,000		35,000
Unrelated Parties		279,857		24,571		62,960		—		87,531		123,571
Aggregate Totals November 30, 2020		454,857	$	59,571	$	62,960	$	—	$	122,531	$	158,571

Six Months
			Value of Shares Issued for:
Six Months Ended November 30, 2021	Total Shares Issued		Stock Payable		Services		Investment and Other		Total Value		Stock Payable
Related Parties
David Tobias, Director		29,377	$	—	$	10,000	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		29,377		—		10,000		—		10,000		10,000
Brad Herr, CFO		44,066		—		15,000		—		15,000		15,000
Randy Lanier, Director		25,179		—		8,571		—		8,571		68,785
Total for related parties		127,999		—		43,571		—		43,571		103,785
Unrelated Parties		7,357,325		100,000		185,250		2,091,666		2,376,916		15,000
Aggregate Totals November 30, 2021		7,485,324	$	100,000	$	228,821	$	2,091,666	$	2,420,487	$	118,785
Six Months Ended November 30, 2020
Related Parties
David Tobias, Director		50,000	$	—	$	10,000	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		50,000		—		10,000		—		10,000		10,000
Brad Herr, CFO		75,000		—		15,000		—		15,000		15,000
Randy Lanier, Director		—		—		—		—		—		—
Total for related parties		175,000		—		35,000		—		35,000		35,000
Unrelated Parties		279,857		—		87,531		—		87,531		123,571
Aggregate Totals November 30, 2020		454,857	$	—	$	122,531	$	—	$	122,531	$	158,571

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REVENUE FROM CONTINUING OPERATIONS

6 Months Ended

Nov. 30, 2021

Revenue From Continuing Operations

REVENUE FROM CONTINUING OPERATIONS

NOTE 9 – REVENUE FROM CONTINUING OPERATIONS

The Company product revenue is generated though sales of its debudder products produced by third parties and distributed by the Company. The Company’s customers, to which trade credit terms are extended, consist almost exclusively of domestic companies. The following table sets out product sales for the three and six-month periods ended November 30, 2021 and 2020, along with customer concentration information for each period.

	Three months ended November 30,
	2021			2020
Debudder product revenues	$	48,367		$	42,307
Customer concentrations
Debudder sales
Customer A	$	23,500		$	—
Customer B		23,760			—
Customer C		—			19,885
Customer D		—			12,100
Totals	$	47,260		$	31,985
% of total revenues		98	%		76	%

	Six months ended November 30,
	2021			2020
Debudder product revenues	$	123,052		$	73,136
Customer concentrations
Debudder sales
Customer A	$	37,900		$	—
Customer B		23,760			—
Customer C		14,680			34,285
Customer D		43,320			26,130
Totals	$	119,660		$	60,415
% of total revenues		97	%		83	%

All sales were domestic except international sales of $23,760 and $23,852 in the three and six-month periods ended November 30, 2021, respectively. All sales were domestic except international sales of $3,471 and $4,021 in the three and six-month periods ended November 30, 2020, respectively.

As of November 30, 2021 and May 31, 2021, there were $15,700 and nil, respectively, of accounts receivable from the Company’s primary customers.

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DISCONTINUED OPERATIONS

6 Months Ended

Nov. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

NOTE 10 – DISCONTINUED OPERATIONS

In the year ended May 31, 2021, the Company unwound its acquisition of assets from Elevated Ag Solutions, Inc. As a result of the unwinding, the net income (loss) from the Elevated business segment is included in Discontinued Operations in the statements of operations for all periods presented. As a result of the unwinding in the year ended May 31, 2021, the Company reversed the acquisition of intangible assets, cancelled 1,300,000 out of the 1,400,000 shares of common stock that were issued in the acquisition, and paid a $10,000 walk-away fee to the prior owners.

Discontinued operations operating results for the three and six month periods ended November 30, 2021 and 2020 are reflected in the following tables.

	Three and Six-Month Periods Ended November 30, 2021		Three and Six-Month Periods Ended November 30, 2020
Revenue	$	—	$	75,217
Cost of revenue		—		66,243
Amortization		—		13,125
Gross profit		—		(4,151	)
Loss on discontinued operations		—		10,000
	$	—	$	(14,151	)

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IMPACT OF COVID-19

6 Months Ended

Nov. 30, 2021

Impact Of Covid-19

IMPACT OF COVID-19

NOTE 11 – IMPACT OF COVID-19

In March 2020, COVID-19 was declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention. Its rapid spread around the world and throughout the United States prompted many countries, including the United States, to institute restrictions on travel, public gatherings and certain business operations. These restrictions significantly disrupted economic activity in the United States and Worldwide. As of November 30, 2021 and through the date of filing of this Form 10-Q, the disruption did not materially impact the Company’s financial statements.

The effects of the continued outbreak of COVID-19 and related government responses could include extended disruptions to supply chains and capital markets, reduced labor availability and a prolonged reduction in economic activity. These effects could have a variety of adverse impacts to the Company, including our ability to operate. As of November 30, 2021 there were no material adverse impacts to the Company’s operations due to COVID-19.

The economic disruptions caused by COVID-19 could also adversely impact the impairment risks for certain long-lived assets. Management evaluated these impairment considerations and determined that no such impairments occurred as of May 31, 2021 or through the date of filing this Form 10-Q.

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SUBSEQUENT EVENTS

6 Months Ended

Nov. 30, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12 – SUBSEQUENT EVENTS

On December 1, 2021, the Company issued 167,796 shares of common stock valued at $83,785 to non-related parties and 87,500 shares of common stock valued at $$35,000 to officers and directors for stock payable at November 30, 2021 relating to services rendered in the quarter ended November 30, 2021. The shares were valued based on the closing price of the Company’s common stock on the OTCQB Market on dates the shares were authorized to be issued.

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NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Nov. 30, 2021

Accounting Policies [Abstract]

Nature of Business

Nature of Business

MJ Harvest, Inc. (the “Company”), develops, acquires, and distributes agricultural and horticultural tools and implements for sale primarily to growers and operators in the hemp and cannabis retail industry. The Company owns 100% of G4 Products LLC, (“G4”) which owns intellectual property for a patented manual debudder product line marketed under the Original 420 Brand as the Debudder Bucket Lid and Edge. The Company also owns 100% of AgroExports LLC (“Agro”) which serves as the domestic and international distribution arm for sales of agricultural and horticultural tools and implements. The Company operates its sales portal website, www.procannagro.com, for online sales of its products.

In 2019, the Company formed AgroExports.CA ULC (“Agro Canada”), a wholly owned Canadian subsidiary in order to facilitate online payments from sales in Canada. Sales in Canada are currently serviced through a fulfillment center in Toronto.

In the year ending May 31, 2021, the Company expanded its focus to include a minority investment interest in PPK Investment Group, Inc. (“PPK”), a vertically integrated cannabis company in Oklahoma that operates as a grower, harvester, processor, manufacturer and distributor of the Country Cannabis Brand of cannabis products. The investment in PPK represents a shift in focus from an agricultural implements-based business to a broader cannabis industry focus. The Company has continued to expand its cannabis focus in the current year with new investments in WDSY LLC and BLIP Holdings LLC, owners of the Weedsy and BLVK brands, respectively.

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The Company’s fiscal year-end is May 31. The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three and six-month periods ended November 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2022.

For further information refer to the financial statements and footnotes thereto in the Company’s audited financial statements for the year ended May 31, 2021 in the Form 10-K as filed with the Securities and Exchange Commission.

The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries Agro, G4, and Agro Canada. All subsidiaries were wholly owned in the periods presented. All intercompany transactions have been eliminated.

Going Concern

Going Concern

The Company has an accumulated deficit as of November 30, 2021 of $10,528,328 and negative working capital of $1,159,061. In addition, we have notes payable aggregating $900,000 that will be due on March 22, 2022.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.   The ability of the Company to continue as a going concern is dependent upon the Company’s ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

Additional acquisitions and business opportunities are under consideration, but the Company has not reached agreement with any other acquisition candidates or business opportunities. Management intends to finance operating costs over the next twelve months with cash flows from operations, private placement or public offering of common stock or debt instruments, and when necessary, advances from directors and officers. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Share based compensation, impairment of long-lived assets, amortization of intangible assets, and income taxes are subject to estimates. Actual results could differ from those estimates.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation.

New Accounting Standards

New Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06 Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. The update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years and with early adoption permitted. Management is evaluating the impact of this update on the Company’s consolidated financial statements.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Revenue Recognition

Revenue Recognition

The Company generates revenue based on sales of products and revenue is recognized when the Company satisfies its performance obligation by shipping products to our customers. Our products consist of agricultural tools and implements, soils, and soil additives used primarily in growing and harvesting hemp and marijuana. Shipments terms are FOB origination, and revenue is recognized when the product is delivered to the shipper by our fulfillment centers or, in the case of drop shipments of distributed products, when the products are shipped from the manufacturer. At the time the products are delivered to the shipper, no other performance obligations remain. Revenue is recognized in an amount that reflects the consideration that is received in exchange for the products shipped.

The Company accounts for shipping and handling activities as a fulfillment cost and include fees received for shipping and handling as part of the transaction price. Provision for sales incentives, discounts, and returns and allowances, if applicable, are accounted for as reductions of revenue in the period the related sales are recorded. Sales incentives, discounts and returns and allowances were not material in the periods presented in the accompanying consolidated financial statements. The Company had no warranty costs associated with the sales of its products in the periods presented in the accompanying consolidated statements of operations and no provision for warranty expenses has been included.

nventory

Inventory

Inventory consists of purchased products and is stated at the lower of cost or market, with cost being determined using the average cost method. Allowances for obsolete inventory are recognized when the inventory is determined to be unsalable through the normal course of business.

Investments

Investments

Equity securities are generally measured at fair value. Unrealized gains and losses for equity securities are included in earnings. If an equity security does not have a readily determinable fair value, the Company may elect to measure the security at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. At the end of each reporting period, the Company reassesses whether an equity security without a readily determinable fair value qualifies to be measured at cost minus impairment, considers whether impairment indicators exist to evaluate whether the investment is impaired and, if so, records an impairment loss. Upon sale of an equity security, the realized gain or loss is recognized in earnings.

Intangible Assets

Intangible Assets

Intangible asset amounts are initially recognized at the acquisition date fair values of intangible assets acquired.

Finite-lived intangible assets are amortized over their useful lives. The carrying amounts of finite-lived intangible assets are evaluated for recoverability whenever events or changes in circumstances indicate that the Company may be unable to recover the asset’s carrying amount.

When there is no foreseeable limit on the period of time over which an intangible asset is expected to contribute to the cash flows of the Company, an intangible asset is determined to have an indefinite life. Indefinite life intangible assets are not amortized but tested for impairment annually or more frequently when indicators of impairment exist.

Determination of acquisition date fair values and intangible asset impairment tests require judgment. Significant judgments required to estimate the fair value of intangible assets include determining the appropriate valuation method, identifying market prices for similar type items, estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates.

Net Earnings (Loss) Per Share

Net Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses, common stock equivalents, if any, are not considered, as their effect would be anti-dilutive. During the three months ended August 31, 2021, the Company had 3,000,000 warrants outstanding which were anti-dilutive due to the net loss recognized in the period. In the three and six-month periods ended November 30, 2021, the Company had no common stock equivalents outstanding.

Share-Based Payments

Share-Based Payments

All transactions in which goods or services are received for the issuance of shares of the Company’s common stock are accounted for based on the fair value of the common stock issued and recognized when the board of directors authorizes the issuance.

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FIXED ASSETS (Tables)

6 Months Ended

Nov. 30, 2021

Property, Plant and Equipment [Abstract]

Schedule of fixed assets

	November 30,			May 31,
Property & Equipment	2021			2021
Equipment - production molds	$	25,109		$	25,109
Less: Accumulated amortization		(16,790	)		(14,270	)
Net Equipment	$	8,319		$	10,839

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INTANGIBLE ASSETS (Tables)

6 Months Ended

Nov. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

	November 30,			May 31,
Intangibles	2021			2021
Finite lived intangibles
Patents	$	250,000		$	250,000
Less: impairment of patents		(100,000	)		(100,000	)
		150,000			150,000
Less: accumulated amortization		(31,666	)		(24,166	)
Patents, net		118,334			125,834
Non-compete agreement		—			157,000
Less: impairment of non-compete		—			(107,000	)
		—			50,000
Less: accumulated amortization		—			(6,900	)
Less: adjustment for discontinued operations		—			(43,100	)
Non-compete agreement, net		—			—
Customer relationships		—			826,000
Less: impairment of relationships		—			(551,000	)
		—			275,000
Less: accumulated amortization		—			(6,225	)
Less: adjustment for discontinued operations		—			(268,775	)
Customer relationships, net		—			—
Total finite lived intangibles		118,334			125,834
Indefinite lived intangibles
Domain names		6,000			31,000
Less: adjustment for discontinued operations		—			(25,000	)
Total domain names		6,000			6,000
Total intangibles	$	124,334		$	131,834

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NVESTMENTS (Tables)

6 Months Ended

Nov. 30, 2021

Nvestments

Schedule of investments

	November 30,		May 31,
Investments	2021		2021
PPK Investment Group, Inc.	$	2,791,666	$	1,000,000
WDSY, LLC		200,000		—
BLIP Holdings, LLC		100,000		—
Total investments	$	3,091,666	$	1,000,000

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RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Nov. 30, 2021

Related Party Transactions [Abstract]

Schedule of related party transactions

	Related Party Advances at		Additions During the Three Months Ended August 31, 2021				Additions During the Three Months Ended November 30, 2021				Related Party Advances at
	May 31, 2021		Advances		Services		Advances		Services		November 30, 2021
Related Parties
Patrick Bilton, CEO and Director
Cash Advances	$	928,414	$	64,000	$	—	$	87,500	$	—	$	1,079,914
Payable for services		280,000				70,000		—		70,000		420,000.0
David Tobias, Director		80,553		—		—		2,000		—		82,553.0
Jerry Cornwell, Director		29,015		—		—		—		—		29,015
Total for related parties	$	1,317,982	$	64,000	$	70,000	$	89,500	$	70,000	$	1,611,482

	Related Party Advances at		Additions During the Three Months Ended August 31, 2020				Additions During the Three Months Ended November 30, 2020				Related Party Advances at
	May 31, 2020		Advances		Services		Advances		Services		November 30, 2020
Related Parties
Patrick Bilton, CEO and Director
Cash Advances	$	726,414	$	65,000	$	—	$	55,000	$	—	$	846,414
Payable for services		—		—		—		—		140,000	$	140,000
David Tobias, Director		80,553		—		—		—		—		80,553
Jerry Cornwell, Director		23,015		1,000		—		5,000		—		29,015
Total for related parties	$	829,982	$	66,000	$	—	$	60,000	$	140,000	$	1,095,982

Nexit, Inc., a company solely owned by Brad Herr, the Company’s Chief Financial Officer, was owed $149,593 and $77,779 at November 30, 2021 and May 31, 2021, respectively, for services. These amounts are included in accounts payable to related party.

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SHARE CAPITAL (Tables)

6 Months Ended

Nov. 30, 2021

Equity [Abstract]

Schedule of common stock issued

Three Months
			Value of Shares Issued for:
Three Months Ended November 30, 2021	Total Shares Issued		Stock Payable		Services		Investment and Other		Total Value		Stock Payable
Related Parties
David Tobias, Director		29,377	$	10,000	$	—	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		29,377		10,000		—		—		10,000		10,000
Brad Herr, CFO		44,066		15,000		—		—		15,000		15,000
Randy Lanier, Director		25,179		8,571						8,571		68,785
Total for related parties		127,999		43,571		—		—		43,571		103,785
Unrelated Parties		1,210,103		146,979		57,921		300,000		504,900		15,000
Aggregate Totals November 30, 2021		1,338,102	$	190,550	$	57,921	$	300,000	$	548,471	$	118,785
Three Months Ended November 30, 2020
Related Parties
David Tobias, Director		50,000	$	10,000	$	—	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		50,000		10,000		—		—		10,000		10,000
Brad Herr, CFO		75,000		15,000		—		—		15,000		15,000
Randy Lanier, Director		—		—		—		—		—		—
Total for related parties		175,000		35,000		—		—		35,000		35,000
Unrelated Parties		279,857		24,571		62,960		—		87,531		123,571
Aggregate Totals November 30, 2020		454,857	$	59,571	$	62,960	$	—	$	122,531	$	158,571

Six Months
			Value of Shares Issued for:
Six Months Ended November 30, 2021	Total Shares Issued		Stock Payable		Services		Investment and Other		Total Value		Stock Payable
Related Parties
David Tobias, Director		29,377	$	—	$	10,000	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		29,377		—		10,000		—		10,000		10,000
Brad Herr, CFO		44,066		—		15,000		—		15,000		15,000
Randy Lanier, Director		25,179		—		8,571		—		8,571		68,785
Total for related parties		127,999		—		43,571		—		43,571		103,785
Unrelated Parties		7,357,325		100,000		185,250		2,091,666		2,376,916		15,000
Aggregate Totals November 30, 2021		7,485,324	$	100,000	$	228,821	$	2,091,666	$	2,420,487	$	118,785
Six Months Ended November 30, 2020
Related Parties
David Tobias, Director		50,000	$	—	$	10,000	$	—	$	10,000	$	10,000
Jerry Cornwell, Director		50,000		—		10,000		—		10,000		10,000
Brad Herr, CFO		75,000		—		15,000		—		15,000		15,000
Randy Lanier, Director		—		—		—		—		—		—
Total for related parties		175,000		—		35,000		—		35,000		35,000
Unrelated Parties		279,857		—		87,531		—		87,531		123,571
Aggregate Totals November 30, 2020		454,857	$	—	$	122,531	$	—	$	122,531	$	158,571

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REVENUE FROM CONTINUING OPERATIONS (Tables)

6 Months Ended

Nov. 30, 2021

Revenue From Continuing Operations

Schedule of revenues

	Three months ended November 30,
	2021			2020
Debudder product revenues	$	48,367		$	42,307
Customer concentrations
Debudder sales
Customer A	$	23,500		$	—
Customer B		23,760			—
Customer C		—			19,885
Customer D		—			12,100
Totals	$	47,260		$	31,985
% of total revenues		98	%		76	%

	Six months ended November 30,
	2021			2020
Debudder product revenues	$	123,052		$	73,136
Customer concentrations
Debudder sales
Customer A	$	37,900		$	—
Customer B		23,760			—
Customer C		14,680			34,285
Customer D		43,320			26,130
Totals	$	119,660		$	60,415
% of total revenues		97	%		83	%

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DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Nov. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Schedule of discontinued operations

	Three and Six-Month Periods Ended November 30, 2021		Three and Six-Month Periods Ended November 30, 2020
Revenue	$	—	$	75,217
Cost of revenue		—		66,243
Amortization		—		13,125
Gross profit		—		(4,151	)
Loss on discontinued operations		—		10,000
	$	—	$	(14,151	)

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NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	Nov. 30, 2021	May 31, 2021
Accounting Policies [Abstract]
Retained Earnings (Accumulated Deficit)	$ 10,528,328	$ 9,098,257

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Schedule of fixed assets (Details) - USD ($)	Nov. 30, 2021	May 31, 2021
Property, Plant and Equipment [Abstract]
Equipment - production molds	$ 25,109	$ 25,109
Less: Accumulated amortization	(16,790)	(14,270)
Net Equipment	$ 8,319	$ 10,839

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FIXED ASSETS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2021	Nov. 30, 2020	Nov. 30, 2021	Nov. 30, 2020
Property, Plant and Equipment [Abstract]
Depreciation	$ 1,260	$ 1,260	$ 2,520	$ 2,520

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Schedule of intangible assets (Details) - USD ($)	6 Months Ended
	Nov. 30, 2021	Nov. 30, 2020	May 31, 2021
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	$ 7,500
Finite-Lived Intangible Assets, Net	118,334		$ 125,834
Indefinite-lived Intangible Assets (Excluding Goodwill)	6,000		6,000
Intangible Assets, Current	124,334		131,834
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	250,000		250,000
Impairment of Intangible Assets, Finite-lived	(100,000)	$ (100,000)
Total customer relationships	150,000		150,000
Finite-Lived Intangible Assets, Accumulated Amortization	(31,666)		(24,166)
Finite-Lived Intangible Assets, Net	118,334		125,834
Non Compete Agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross			157,000
Impairment of Intangible Assets, Finite-lived		(107,000)
Total customer relationships			50,000
Finite-Lived Intangible Assets, Accumulated Amortization			(6,900)
Finite-Lived Intangible Assets, Net
Disposal Group, Including Discontinued Operation, Intangible Assets			(43,100)
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross			826,000
Impairment of Intangible Assets, Finite-lived		$ (551,000)
Total customer relationships			275,000
Finite-Lived Intangible Assets, Accumulated Amortization			(6,225)
Finite-Lived Intangible Assets, Net
Disposal Group, Including Discontinued Operation, Intangible Assets			(268,775)
Domain Names [Member]
Finite-Lived Intangible Assets [Line Items]
Domain names	6,000		31,000
Adjustment for discontinued operations			(25,000)
Indefinite-lived Intangible Assets (Excluding Goodwill)	$ 6,000		$ 6,000

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INTANGIBLE ASSETS (Details Narrative)	Nov. 30, 2021 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Finite-Lived Intangible Assets, Accumulated Amortization	$ 7,500

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Schedule of investments (Details) - USD ($)	Nov. 30, 2021	May 31, 2021
Nvestments
PPK Investment Group, Inc.	$ 2,791,666	$ 1,000,000
WDSY, LLC	200,000
BLIP Holdings, LLC	100,000
Total investments	$ 3,091,666	$ 1,000,000

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Schedule of related party transactions (Details) - USD ($)	3 Months Ended				6 Months Ended		12 Months Ended
	Nov. 30, 2021	Aug. 31, 2021	Nov. 30, 2020	Aug. 31, 2020	Nov. 30, 2021	Nov. 30, 2020	May 31, 2021	May 31, 2020
Related Party Transaction [Line Items]
Due to Related Parties, Current		$ 1,317,982		$ 829,982	$ 1,317,982	$ 829,982	$ 829,982
Total Advances	$ 89,500	64,000	$ 60,000	66,000
Total Services	70,000	70,000	140,000
Due to Related Parties, Current	1,611,482		1,095,982		1,611,482	1,095,982	1,317,982	$ 829,982
Patrick Bilton [Member]
Related Party Transaction [Line Items]
Due to Related Parties, Current		928,414		726,414	928,414	726,414	726,414
Total Advances	87,500	64,000	55,000	65,000
Total Services
Due to Related Parties, Current	1,079,914		846,414		1,079,914	846,414	928,414	726,414
Increase (Decrease) in Accounts Payable, Related Parties					420,000.0	140,000	280,000
Services	70,000	70,000	140,000
David Tobias [Member]
Related Party Transaction [Line Items]
Due to Related Parties, Current		80,553		80,553	80,553	80,553	80,553
Total Advances	2,000
Total Services
Due to Related Parties, Current	82,553.0		80,553		82,553.0	80,553	80,553	80,553
Jerry Cornwell [Member]
Related Party Transaction [Line Items]
Due to Related Parties, Current		29,015		23,015	29,015	23,015	23,015
Total Advances			5,000	1,000
Total Services
Due to Related Parties, Current	$ 29,015		$ 29,015		$ 29,015	$ 29,015	$ 29,015	$ 23,015

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Schedule of common stock issued (Details) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2021	Nov. 30, 2020	Nov. 30, 2021	Nov. 30, 2020
Defined Benefit Plan Disclosure [Line Items]
Total Shares Issued	127,999	175,000	127,999	175,000
Total Value	$ 43,571	$ 35,000
Services			43,571	35,000
Investment and Other
Stock Payable	43,571	35,000	43,571	35,000
Stock Payable	103,785	35,000	103,785	35,000
Services		$ 62,960	228,821	$ 122,531
Investment and Other	$ 300,000		$ 2,091,666
Total Shares Issued	1,338,102	454,857	7,485,324	454,857
Stock Payable	$ 190,550	$ 59,571	$ 100,000
Services	57,921	62,960	228,821	122,531
Investment and Other	300,000		2,091,666
Total Value	548,471	122,531	2,420,487	122,531
Stock Payable	$ 118,785	$ 158,571	$ 118,785	$ 158,571
Related Party [Member] | David Tobias [Member]
Defined Benefit Plan Disclosure [Line Items]
Total Shares Issued	29,377	50,000	29,377	50,000
Total Value	$ 10,000	$ 10,000
Services			10,000	10,000
Investment and Other
Stock Payable	10,000	10,000	10,000	10,000
Stock Payable	$ 10,000	$ 10,000	$ 10,000	$ 10,000
Related Party [Member] | Jerry Cornwell [Member]
Defined Benefit Plan Disclosure [Line Items]
Total Shares Issued	29,377	50,000	29,377	50,000
Total Value	$ 10,000	$ 10,000
Services			10,000	10,000
Investment and Other
Stock Payable	10,000	10,000	10,000	10,000
Stock Payable	$ 10,000	$ 10,000	$ 10,000	$ 10,000
Related Party [Member] | Brad Herr [Member]
Defined Benefit Plan Disclosure [Line Items]
Total Shares Issued	44,066	75,000	44,066	75,000
Total Value	$ 15,000	$ 15,000
Services			15,000	15,000
Investment and Other
Stock Payable	15,000	15,000	15,000	15,000
Stock Payable	$ 15,000	$ 15,000	$ 15,000	$ 15,000
Related Party [Member] | Randy Lanier [Member]
Defined Benefit Plan Disclosure [Line Items]
Total Shares Issued	25,179		25,179
Total Value	$ 8,571
Services			8,571
Stock Payable	8,571		8,571
Stock Payable	$ 68,785		$ 68,785
Un Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Total Shares Issued	1,210,103	279,857	7,357,325	279,857
Stock Payable	$ 146,979	$ 24,571	$ 100,000
Unrelated Parties [Member]
Defined Benefit Plan Disclosure [Line Items]
Total Value	504,900	87,531	2,376,916	87,531
Stock Payable	15,000	123,571	15,000	123,571
Services	57,921	$ 62,960	185,250	87,531
Investment and Other	$ 300,000		$ 2,091,666

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Schedule of revenues (Details) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2021	Nov. 30, 2020	Nov. 30, 2021	Nov. 30, 2020
Revenues	$ 48,367	$ 42,307	$ 123,052	$ 73,136
Totals	$ 47,260	$ 31,985	$ 119,660	$ 60,415
Debudder Sales [Member]
Percent of Total Revenues	98.00%	76.00%	97.00%	83.00%
Customer A [Member] | Debudder Sales [Member]
Totals	$ 23,500		$ 37,900
Customer B [Member] | Debudder Sales [Member]
Totals	23,760		23,760
Customer C [Member] | Debudder Sales [Member]
Totals		19,885	14,680	34,285
Customer D [Member] | Debudder Sales [Member]
Totals		12,100	43,320	26,130
Debudder Product Revenues [Member]
Revenues	$ 48,367	$ 42,307	$ 123,052	$ 73,136

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Schedule of discontinued operations (Details) - USD ($)	6 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]
Revenue		$ 75,217
Cost of revenue		66,243
Amortization		13,125
Gross profit		(4,151)
Loss on discontinued operations		$ (10,000)