NOTE 7 – FINANCE LEASE OBLIGATIONS

During April 2025, the Company entered into a lease agreement for certain lab equipment in the amount of $125,000 (“Lease Agreement”). The Lease Agreement was accounted for as a finance lease obligation. Under the terms of the lease agreement, the Company is required to make 60 equal monthly payments of $1,600 plus applicable sales taxes. Under the lease agreement, the Company has the option to acquire all of the leased equipment for a nominal amount upon termination of the lease. The annual interest rate charged in connection with the lease is 2.7%. Lease payments and depreciation of the leased equipment began during June 2025, the date that the lease equipment was installed and became operational. The leased equipment is included in Property and equipment and is being depreciated over their estimated useful lives of 15 years beginning from the date it became operational.

During June 2025, the Company entered into a lease agreement for certain lab equipment in the amount of $15,000 (“Lease Agreement”). The Lease Agreement was accounted for as a finance lease obligation. Under the terms of the lease agreement, the Company is required to make 36 equal monthly payments of $500 plus applicable sales taxes. Under the lease agreement, the Company has the option to acquire all of the leased equipment for a nominal amount upon termination of the lease. The annual interest rate charged in connection with the lease is 8.0%. Lease payments and depreciation of the leased equipment began during June 2025, the date that the lease equipment was installed and became operational. The leased equipment is included in Property and Equipment and is being depreciated over it estimated useful life of 3 years beginning from the date it became operational.

As of July 31, 2025, $119,000 was due under finance lease obligations lease through 2030, of which $28,000 is current.