NOTE 4: INVENTORIES

Inventories consist of the following:

Schedule of inventory, current

The Company maintains a valuation allowance for slow moving inventory for raw materials and finished goods. The valuation allowance creates a new cost basis for the inventory, and it is not subsequently marked up through a reduction in the valuation allowance based on any changes in the underlying facts and circumstances. When the valuation allowance is initially recorded, the increase to the allowance is recognized as an increase in cost of sales. The valuation allowance is only reduced if or when the underlying inventory is sold or destroyed, at which time cost of sales recognized would include the previous adjusted cost basis. During the three months ended May 31, 2026 and May 31, 2025, the Company recorded approximately $57,000 and $99,000, respectively in additional allowances for slow moving inventory.