Note 8 – Loan Receivable

On February 9, 2026, the Company advanced CAD $2,300,000 to a borrower pursuant to a Loan Agreement dated February 6, 2026. The loan bears interest at 12.00% per annum and is secured by 2,666,666 common shares of a British Columbia company whose shares are listed on the TSX Venture Exchange, over which the Company holds a first-priority security interest. The loan is measured at amortized cost under ASC 310-10, is classified as a current asset and, being denominated in Canadian dollars, is remeasured at the period-end spot rate in accordance with ASC 830-20 with the resulting gain or loss recognized in other income (expense).

The stated maturity of the loan, as extended, was May 10, 2026. The loan had not been repaid at August 31, 2026 and remains past due; no payments of principal or interest have been received. At August 31, 2026 the gross carrying amount of the loan, comprising principal and accrued interest translated at the closing rate, was $1,769,437 (May 31, 2026: $1,765,616). Interest income of $50,419 was recognized for the three months ended August 31, 2026 and a foreign exchange loss of $46,597 was recognized in other income (expense) on remeasurement of the Canadian-dollar balance.

The Company applies the current expected credit loss model in ASC 326-20 to the loan receivable and evaluates it individually using a probability-weighted analysis of three recovery scenarios: repayment in full, a part payment followed by enforcement against the pledged shares, and recovery limited to the pledged shares. The analysis considers the quoted market value of the pledged shares (CAD $0.16 per share at August 31, 2026, approximately $307,707 in aggregate), the absence of any payments of principal or interest to date, the formal demand for repayment made on or before June 30, 2026, the borrower’s failure to provide information on the transaction he had identified as his source of repayment, and the demand letter issued by the Company’s counsel on October 6, 2026 (Note 24). On the basis of this evidence the Company reduced the weight assigned to repayment in full and increased the weight assigned to recovery limited to the pledged shares. The allowance for credit losses was increased by $489,274 during the quarter to $1,117,470 at August 31, 2026 (May 31, 2026: $628,196), and the loan is presented net of the allowance at $651,967. If recovery were ultimately limited to the value of the pledged shares, the allowance would increase by approximately $344,260; repayment in full would result in reversal of the allowance in the period received.

The convertible note receivable from a related party of $81,314 and the related accrued interest of $2,192 (Note 21) are presented separately on the condensed consolidated balance sheet as convertible note receivable – related party, $83,506.

In connection with the loan, the issuer of the pledged shares agreed on February 6, 2026 to issue share purchase warrants to the Company; the number of warrants and their exercise price have not been determined or agreed between the parties, no warrants had been issued at August 31, 2026 and no amount has been recognized in respect of them.