Note 18 - Financial Instruments

The Company’s senior secured convertible notes are accounted for as liabilities and are subsequently measured at amortized cost. The Company evaluated the embedded conversion features of the convertible notes in accordance with ASC 815, Derivatives and Hedging, and determined that the conversion features require bifurcation and separate accounting as derivative liabilities.

The Company also determined that the common stock purchase warrant issued in connection with the August 2026 senior secured convertible note constitute a freestanding financial instrument and that the warrant requires separate accounting as a derivative liability.

The derivative liabilities are measured at fair value at each reporting date, with changes in fair value recognized in the unaudited condensed consolidated statements of operations and comprehensive loss. Debt discounts are amortized to interest expense over the contractual terms of the convertible notes using the effective interest method.

As of August 31, 2026, the carrying amounts of the convertible notes and related derivative liabilities were as follows:

Schedule of Carrying Amounts of the Convertible Debt