Note 3 – Inventory

Inventory as of August 31, 2026 and May 31, 2026 consisted of the following:

Carbon credit inventory represents carbon credits currently held for sale and is stated at the lower of cost or net realizable value. Carbon credit inventory is accounted for by analogy to ASC 330 in the absence of then-effective authoritative guidance specific to environmental credits, as described in Note 1 to the 2026 Form 10-K. No project work in process is carried within inventory. The carbon credit inventory held by Karbon-X Project Inc., which agrees to a physical count of registry holdings at August 31, 2026, is subject to the general security interest granted under the receivables financing arrangements described in Note 13.