NOTE 7: REVOLVING LINE OF CREDIT

The Company has a $1,500,000 revolving line of credit at prime which was 6.75% at May 31, 2026 and February 28, 2026. The revolving credit line is collateralized by the Company’s accounts receivable and inventory. The revolving credit line is payable on demand and must be retired for a 30-day period, once annually. If the Company fails to perform the 30-day annual pay down or if the bank elects to terminate the credit line, the bank may, at its option, convert the outstanding balance to a 36-month term note with payments including interest in 36 equal installments. At May 31, 2026, there were no outstanding borrowings under the revolving line of credit.

The Company has a $750,000 equipment line of credit at prime plus 0.50%, which was 7.25% at May 31, 2026. At May 31, 2026, there were no outstanding borrowings under the equipment line of credit.