3. INVENTORY

The Company regularly monitors its inventory levels to identify inventory that may expire or has a cost basis in excess of its estimated net realizable value, and records write-downs for inventory that has expired, inventory that has a cost basis in excess of its estimated net realizable value, and inventory in excess of expected sales requirements. Any write-downs of inventories are charged to cost of revenues in the consolidated condensed statements of operations and comprehensive loss.

The Company has reduced its reserve for expiring inventory to $0 at June 30, 2026 from $251,677 at December 31, 2025, as the current finished goods have an expiry of July 31, 2029 at June 30, 2026 compared to expiries of either September 30, 2026 or October 31, 2026 at December 31, 2025. The reduction in the reserve was driven by the write-off of expired inventory in the current period, resulting in a higher proportion of recoverable inventory remaining on hand.

During the three and six months ended June 30, 2026, write downs for expired inventory were $27,842 and $24,346, ($0 and $35 for the three and six months ended June 30, 2025). The six-month amount is net of a $9,946 reversal recorded during the three months ended March 31, 2026 of amounts previously accrued for inventory destruction.