NOTE 3 – COST OF GOODS SOLD

Our cost of goods sold 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 goods sold commission 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 our selling, general and administrative (“SG&A”) costs. As a component of the cost of goods sold, commission costs incurred in the three month period ended July 31, 2025 and 2024 were $146,921 and $100,290, respectively. Commission costs in the nine month period ended July 31, 2025 and 2024 were $782,814 and $525,696, respectively.