NOTE 8. Stock-based Compensation

In August 2022, the Company established a Stock Option Plan, superseded by the 2023 Equity Incentive Plan (the “Incentive Plan”), under which the Company’s Board of Directors may, from time-to-time, in its discretion, grant stock options, Performance Share Units (“PSU’s”), or other equity awards to its directors, officers, consultants and employees of the Company.

Stock Options

Stock options outstanding vest in equal tranches over a period of three years. During the year-ended May 31, 2026, the Company granted 413,000 stock options (May 31, 2025 – 1,520,000). The Company estimated the fair value of the stock options on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

A summary of stock option activity for the Company is as follows:

During the year-ended May 31, 2026, the Company recorded stock-based compensation expenses of $710 (2025 - $253), of which $355 is recorded in general and administrative and $355 in research and development expenses, in the consolidated statements of operations, respectively (2025 - $253 and nil). The weighted average grant date fair value of the stock options issued was $USD 2.19 (May 31, 2025 - $USD 0.61).

Performance Share Units

On February 3, 2025, the Company issued 335,000 Performance Share Units (“PSU’s”) that vested upon achievement of 100% Total Shareholder Return. The Company recorded $562 of compensation expenses related to these PSU’s based on a simulation model. These PSU’s vested on June 16, 2025, and were recorded in general and administrative expenses in the consolidated statement of operations during the year-ended May 31, 2025. All of the Class A ordinary shares corresponding to these vested PSU’s were issued during the year-ended May 31, 2026.

On August 27, 2025, the Company issued 1,160,001 PSU’s that vested upon achievement of the Company achieving a market capitalization of $USD 100 million. The Company recorded $3,651 of compensation expenses related to these PSU’s based on a Monte Carlo simulation model. These PSU’s vested on September 26, 2025. Included in general and administrative expenses and research and development expenses in the consolidated statement of operations during the year-ended May 31, 2026, was $1,826 and $1,825, respectively. All of the Class A ordinary shares corresponding to these vested PSU’s were issued during the year-ended May 31, 2026.

The following assumptions were used to estimate the fair value of these PSU’s:

On February 10, 2026, the Company issued 1,625,000 PSU’s that vest in two separate and equal tranches; i) upon achievement of the Company achieving a market capitalization of $USD 250 million; and ii) upon outperforming the Russell Microcap index over a two-year period. The Company recorded $3,789 of compensation expenses related to these PSU’s based on a Monte Carlo simulation model. Included in general and administrative expenses and research and development expenses in the consolidated statement of operation during the year-ended May 31, 2026, was $1,894 and $1,895, respectively.

The following assumptions were used to estimate the fair value of these PSU’s:

In May 2026, 674,272 of these PSU’s vested. The corresponding Class A ordinary shares for these vested PSU’s had not been issued as of May 31, 2026.

Shares for Services

The Company periodically issues Class A ordinary shares for services provided by third parties. During the year ended May 31, 2026, the Company recorded $1,276 of operating expenses relating to 1,495,123 shares issued for services (2025 – $677). Included in general and administrative expenses and research and development expenses in the consolidated statements of operations during the year-ended May 31, 2026, was $1,103 and $47, respectively (2025 - $677 and nil).

During the year-ended May 31, 2026, the Company incurred $32 (May 31, 2025 - $528) in general and administrative costs in the consolidated statements of operations relating to 19,401 (May 31, 2025 - 689,371) of Class A ordinary shares to be issued at a future date for services rendered. This has been recorded as a component of Shareholders’ Equity.