Note 9 – Deferred Revenue

The Company receives consideration in advance of delivering carbon credits and, in some cases, advisory services. Amounts received before the related credits or services are transferred to the customer are recorded as deferred revenue (contract liabilities) and recognized in revenue when control transfers to the customer. Deferred revenue consisted of the following:

Included in deferred revenue at August 31, 2026 is EUR 2,660,000 (USD $3,084,536) received from a single customer under an I-REC sales agreement dated August 22, 2025, as described in Note 9 to the 2026 Form 10-K. The certificates had not been transferred at August 31, 2026 and the balance will be recognized as revenue when they are. Development cost prepayments of $1,042,458 relate to the ABC Mangrove Senegal project and include $540,000 invoiced in July 2026 for the twenty percent development-cost advance on planting cycles 3 and 4, which was uncollected at August 31, 2026 and is included in accounts receivable; these amounts will be recognized as the related performance obligations are satisfied, currently expected in late calendar 2027. Also included is $107,112 (EUR 91,650) invoiced and collected in July 2026 as the signing instalment under a technical advisory agreement entered into in June 2026 for the Stage 1 design of a nature-based afforestation project; the Company’s single performance obligation under that agreement is satisfied at a point in time on delivery and acceptance of the final project design document, currently expected in the quarter ending February 28, 2027, and the instalment is carried as a contract liability until then. Of the $3,792,091 deferred at May 31, 2026, $157,596 was recognized as revenue during the three months ended August 31, 2026 on delivery of the related credits.