NOTE 11 – COMMITMENTS AND CONTINGENCIES

The Company accounts for contingencies in accordance with ASC 450, Contingencies. A liability is recorded when it is probable that a loss has been incurred and the amount can be reasonably estimated. If a loss is reasonable possible but not probable, or if the amount cannot be estimated, the nature of the contingency and an estimate of the possible loss, if determinable, is disclosed. Remote contingencies are generally not disclosed unless related to guarantee.

Lease Obligations

The Company leases property and equipment under operating leases, typically with terms greater than 12 months, and determine if an arrangement contains a lease at inception. In general, an arrangement contains a lease if there is an identified asset and we have the right to direct the use of and obtain substantially all of the economic benefit from the use of the identified asset. We record an operating lease liability at the present value of lease payments over the lease term on the commencement date. The related right of use (‘‘ROU”) operating lease asset reflects rental escalation clauses, as well as renewal options and/or termination options. The exercise of lease renewal and/or termination options is at our discretion and is included in the determination of the lease term and lease payment obligations when it is deemed reasonably certain that the option will be exercised. When available, we use the rate implicit in the lease to discount lease payments to present value; however, certain leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement.

The Company classifies our leases as buildings, vehicles or computer and office equipment and do not separate lease and non-lease components of contracts for any of the aforementioned classifications. In accordance with applicable guidance, we do not record leases with terms that are less than one year on the Consolidated Balance Sheets.

None of our lease agreements contain material restrictive covenants or residual value guarantees.

Buildings

The Company entered into an 84 eighty-four month lease for 3,577 square feet of newly constructed office, laboratory, and warehouse space located in Edina, Minnesota in May 2017, which was renewed for an additional thirty months resulting in the lease expiration in November 2026. The base rent has annual increases of 2% and the Company is responsible for its proportional share of common space expenses, property taxes, and building insurance. This lease is terminable by the landlord if damage causes the property to no longer be utilized as an integrated whole and by the Company if damage causes the facility to be unusable for a period of 45 days. In January 2020, the Company entered into a lease amendment to extend the lease term through November of 2026 in exchange for receipt of a loan of $42,500 recorded to note payable. The monthly base rent as of June 30, 2026, and March 31, 2026, was $2,434.

The Company entered into a 63 sixty-three month lease for 2,400 square feet of office space located in Edina, Minnesota in January 2022. This lease will expire in March 2027. The base rent has annual increases of 2.5% and the Company is responsible for its proportional share of common space expenses, property taxes, and building insurance. The monthly base rent as of June 30, 2026, and March 31, 2026, was $2,950.

On January 10, 2023, the Company entered into a new lease agreement for approximately 14,000 square feet of production and warehouse space with a commencement date of April 1, 2023, which is when the control and right of use for this asset took place. The initial monthly base rent is $8,420 and has annual increases of 2.5%. The Company is also responsible for its proportional share of common space expenses, property taxes, and building insurance. The lease will terminate on June 30, 2033, and the Company has a renewal option for a period of five years. The monthly base rent as of June 30, 2026, and March 31, 2025 was $0.

Lease Termination

Effective June 30, 2025, the Company terminated its ten-year lease for approximately 14,000 square feet of production and warehouse space. In connection with the termination, the Company agreed to reimburse the landlord for certain unamortized leasing costs, rent abatements, tenant improvements, legal and management fees, costs associated with releasing a mechanical lien, and an amount equal to six months of base rent, common area maintenance charges and real estate taxes attributable to approximately 3,794 square feet of unrented office space.

Upon termination of the lease, the Company derecognized the related operating lease right-of-use asset of $843,783 and operating lease liability of $843,783 and recognized a loss on lease termination of $149,125. The Company also incurred lease termination and related costs of $314,768 during the year ended March 31, 2026. No such costs were incurred during the year ended March 31, 2025. No additional lease termination costs were recognized during the three months ended June 30, 2026.

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of June 30, 2026:

 SCHEDULE OF MATURITY OF ANNUAL UNDISCOUNTED OPERATING LEASE LIABILITY

In compliance with ASC 842 Leases, the Company recognized, based on the extended lease terms to November 7, 2026, and March 2027, a weighted average incremental borrowing rate of 3.20%, an operating lease right-of-use assets for approximately $38,654 and corresponding and equal operating lease liabilities for the leases. As of June 30, 2026, the present value of future base rent lease payments based on the remaining lease term of 0.6 years, are as follows:

 SCHEDULE OF BASE RENT LEASE PAYMENTS

As of June 30, 2026 and March 31, 2026, operating lease right-of-use assets and operating lease liabilities were classified as follows:

 SCHEDULE OF LEASE CURRENT AND NON-CURRENT ASSETS AND LIABILITIES

Employment Agreements

The Company has employment agreements with its executive officers. As of June 30, 2026, these agreements contain severance benefits ranging from one month to six months if terminated without cause.

Legal Proceedings

From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. In June 2026, a former employee filed a whistleblower retaliation complaint with the Occupational Safety and Health Administration (OSHA) under Sarbanes-Oxley Act (SOX), 18 U.S.C. § 1514A. The claimant alleges they were wrongfully terminated after reporting alleged governance and honesty in shareholder relations.

The Company is cooperating with OSHA’s ongoing investigation, denies all allegations and intends to vigorously defend against these allegations. At this preliminary stage, the outcome is uncertain. Although the Company cannot predict the ultimate outcome of this matter, based on currently available information, management cannot estimate the possible loss or range of loss because such amount cannot be reasonably estimated. Management does not believe that the ultimate resolution of this matter will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.