)

Summary of Significant Account Policies

Statement Presentation

The foregoing condensed consolidated financial statements of the Company are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form

-K for the fiscal year ended

November 30, 2017.

The results of operations for the

three

and

six

months ended

May 31, 2018

are

not

necessarily indicative of the results for the fiscal year ending

November 30, 2018.

The financial books of the Company’s Canadian operations are kept in the functional currency of Canadian dollars and the financial statements are converted to U.S. Dollars for consolidation. When consolidating the financial results of the Company into U.S. Dollars for reporting purposes, the Company uses the All-Current translation method. The All-Current method requires the balance sheet assets and liabilities to be translated to U.S. Dollars at the exchange rate as of quarter end. Stockholders’ equity is translated at historical exchange rates and retained earnings are translated at an average exchange rate for the period. Additionally, revenue and expenses are translated at average exchange rates for the periods presented. The resulting cumulative translation adjustment is carried on the balance sheet and is recorded in stockholders’ equity. Since

income tax benefit will be received from the foreign equity sale, the cumulative translation adjustment has

not

been tax adjusted. During the

second

quarter of fiscal

2018,

the Company liquidated its investment in the Canadian subsidiary by selling off remaining inventory and filing dissolution paperwork. The cumulative translation adjustment carried on the balance sheet was released into net income in the

second

quarter

2018

and will

longer need translation each period. Since

income tax benefit will be received from the foreign equity sale, the cumulative translation adjustment has

not

been tax adjusted.

Sales-Type Leases

The Company leases modular buildings to certain customers and accounts for these transactions as sales-type leases. These leases have terms of up to

months and are collateralized by a security interest in the related modular building. The lessee has a bargain purchase option available at the end of the lease term. A minimum lease receivable is recorded net of unearned interest income and profit on sale at the time the Company’s obligation to the lessee is complete. Profit related to the sale of the building is recorded upon fulfillment of the Company’s obligation to the lessee.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the

three

and

six

months ended

May 31, 2018.

Actual results could differ from those estimates.