NOTE 3 – COST OF REVENUES

Our Cost of Revenues includes the cost of materials and related direct costs. With respect to sales made through the Company’s sales agents distribution network, we include in our Costs of Revenues commissions paid to agents for the specific sales they make. Without using agents, we would not be eligible to participate in the Request for Proposals (“RFP”) for these sales on which we incur commission costs. All other sales-related expenses, including those related to unsuccessful bids, are included in selling, general and administrative costs. As a component of Cost of Revenues, commissions in the 3-month period ended April 30, 2023, were $102,452 compared to $262,632 for the 3-month period ended April 30, 2022. Commissions in the 6-month period ended April 30, 2023, was $607,828 compared to $401,004 for the 6-month period ended April 30, 2022. The commissions incurred in these periods relate to the Marine Technology Business.