Inventories consist of the following as of March 31, 2025 and 2024:

The Company had abnormal production capitalization of $112,000 for the fiscal year ended March 31, 2025 and abnormal production expense of $206,000 to cost of sales for the fiscal year ended March 31, 2024. The capitalization in fiscal year 2025 was primarily due to increased demand for bulk spirulina, which drove increased production volumes.

In fiscal year 2024, cultivation of astaxanthin was completed year-round in order to manage staffing constraints, however, in fiscal year 2025, cultivation of astaxanthin was completed in the most productive nine months of the year. The Company calculates total production costs for the year based on normal capacity of production expected to be achieved in a year under normal circumstances. These costs are then allocated into inventory based on the period of production, not including abnormal production costs. Allocating fixed and overhead costs requires management’s judgement to determine when production is outside of the normal range of expected variation in production.

Other non-inventoriable fixed costs of $90,000 and $467,000 were expensed to cost of sales for the fiscal years ended March 31, 2025 and 2024, respectively. In fiscal year 2024, these fixed costs were primarily due to lower overall production volumes with higher than normal excess capacity expense for the full year compared to the prior fiscal year.

Net realizable value adjustments for spirulina products of $22,000 and $256,000 were expensed to cost of sales for the fiscal year ended March 31, 2025 and 2024, respectively. In fiscal year 2024, this adjustment was primarily due to low production volumes with high fixed cost base.