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Note 1 – Basis of Presentation and Significant Accounting Policies Karbon-X Corp. was incorporated in the State of Nevada under the name Cocoluv, Inc. on September 13, 2017 and established a fiscal year end of May 31. On February 21, 2022, pursuant to the terms of a Share Exchange Agreement, the Company acquired all of the issued and outstanding shares of common stock of Karbon-X Project Inc. (“Karbon-X”), and Karbon-X became the wholly owned subsidiary of the Company in a reverse merger (the “Reverse Acquisition”), which was accounted for as a recapitalization effected by a share exchange with Karbon-X as the accounting acquirer. As part of the Reverse Acquisition, on April 14, 2022 the Company changed its name to Karbon-X Corp. Basis of PresentationThe accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended August 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2027. The condensed consolidated balance sheet at May 31, 2026 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by US GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2026, filed with the Securities and Exchange Commission on September 15, 2026 (the “2026 Form 10-K”). The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Karbon-X Project, Inc. (Canada), Karbon-X USA Corp. (Nevada), Karbon-X Trading Limited (Cyprus), Allcot Limited (Ireland), Karbon-X Iberia SL (Spain) and Allcot X Colombia S.A.S. (Colombia). All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements are presented in United States dollars. Going ConcernThe Company has generated significant revenue from its business operations but has incurred an accumulated deficit of $29,535,418 since inception. At August 31, 2026 the Company had negative working capital of $(7,297,897) and cash of $335,445. The Company will require additional funding to meet its ongoing obligations and to fund anticipated operating losses. The ability of the Company to continue as a going concern is dependent on raising capital to fund its business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued. The Company intends to continue to fund its business by way of private placements, note issuances and other financing arrangements as may be required, including the financings completed after the quarter end described in Note 24. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. Use of Estimates and AssumptionsPreparation of the condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant estimates include the inputs used to value embedded derivatives, warrants and options, the expected credit losses on the loan receivable, the variable consideration under the Maintenance Agreement, the useful lives of long-lived assets and the realizability of deferred tax assets. Accordingly, actual results could differ from those estimates.Significant Accounting PoliciesThere have been no material changes to the Company’s significant accounting policies from those described in Note 1 to the consolidated financial statements included in the 2026 Form 10-K, other than the adoption of the accounting standards described under Recently Issued Accounting Standards below. The policies applied to carbon credit inventory (accounted for by analogy to ASC 330 in the absence of then-effective authoritative guidance specific to environmental credits), receivables financing arrangements (secured borrowings under ASC 860, carried at net proceeds and accreted under ASC 835-30), costs to fulfill a contract (ASC 340-40), the acquired project pipeline (ASC 350-30), capitalized application development costs (ASC 350-40), the loan receivable (ASC 310-10 and ASC 326-20), consideration payable to a customer (ASC 606-10-32-25) and compensated absences (ASC 710) are unchanged. Fair Value of Financial InstrumentsThe Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"> </td><td style="width:4%;vertical-align:top;">·</td><td style="vertical-align:top;">Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;</td></tr><tr style="height:15px"><td> </td><td style="vertical-align:top;">·</td><td style="vertical-align:top;">Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and</td></tr><tr style="height:15px"><td> </td><td style="vertical-align:top;">·</td><td style="vertical-align:top;">Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.</td></tr></tbody></table> Other than the derivative liabilities presented below, the carrying amount of the Company’s financial assets and liabilities approximate their fair values. The securities receivable carried at May 31, 2026 was settled in shares of DevvStream Holdings Inc. (“DEVS”) during the quarter (Note 16) and no securities receivable remains at August 31, 2026. The Company measures certain financial instruments at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement. The conversion features embedded in certain of the Company’s convertible promissory notes require bifurcation and measurement at fair value as derivative liabilities under ASC 815-15. The valuation techniques applied at August 31, 2026 are those applied in the audited consolidated financial statements at May 31, 2026, with only the inputs updated to the measurement date: a conversion feature whose conversion price floats and whose 4.99% beneficial ownership limitation binds at the measurement date is measured by a path-dependent Monte Carlo simulation, and every other conversion feature is measured by a Cox-Ross-Rubinstein binomial lattice. At August 31, 2026 the beneficial ownership limitation binds only on the note issued under the Maintenance Agreement (Note 7), which is therefore measured by simulation; the Master Note tranches and the five notes issued during the quarter (Note 11) convert in full within the limitation and are measured on the lattice. The six-month conversion lockout and, for one note, the $0.15 minimum market price in the notes issued during the quarter are instrument terms entered as inputs and do not alter the technique. There was no change in valuation technique during the three months ended August 31, 2026. The models incorporate significant unobservable inputs, including expected stock price volatility, risk-free interest rates, estimated time to maturity, the conversion price at the measurement date and, for the simulation, the assumed rate at which the holder can dispose of conversion shares. Because these inputs are unobservable and require significant management judgment, the Company has classified the derivative liabilities as Level 3 in the fair value hierarchy. The derivative liabilities also include the common stock purchase warrants described in Note 15, measured using the Black-Scholes model with the same volatility and risk-free inputs; because the exercise price is $0.001 per share, their fair value approximates the market value of the underlying shares. The significant inputs at August 31, 2026 were: expected volatility of 59.15% to 65.8%, determined from a basket of guideline companies term-matched to the remaining life of each note because trading in the Company’s common stock is limited and sporadic; risk-free interest rates of 3.94% to 4.16% (United States Treasury constant maturity yields term-matched to the remaining life of each note); conversion prices at the measurement date of $0.07806 to $0.12121 per share, determined from the contractual formula of each note (for the notes whose conversion price is set by reference to the lowest trading price of the common stock, the lowest intraday trading price over the contractual look-back period); shares outstanding of 98,707,757 per the share count used in the valuation models; and, for the simulation, a disposal rate of 27,550 shares per trading day, being the median daily trading volume of the Company’s common stock over the term of the note to the measurement date (May 31, 2026: 15,000 shares per day, measured on the same basis). The simulation measured the derivative embedded in the note issued under the Maintenance Agreement at $224,580 at August 31, 2026; the measurement is sensitive to the disposal rate, which produces a value of approximately $187,340 at 15,000 shares per day and $246,503 at 35,000 shares per day, and approximately $706,628 if the beneficial ownership limitation were treated as a timing constraint only.The following table summarizes the fair value hierarchy of the Company’s financial assets and financial liabilities measured at fair value on a recurring basis as of August 31, 2026 and May 31, 2026: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Level 1</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Level 2</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Level 3</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Total</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px"><td colspan="16" style="vertical-align:bottom;">August 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Investments in equity securities Level 1</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">710,168</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">710,168</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Derivative liabilities – convertible note conversion features</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,072,942</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,072,942</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Derivative liabilities – warrants (Note 15)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">75,025</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">75,025</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td colspan="17" style="vertical-align:top;">May 31, 2026</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Investments in equity securities</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">22,663</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">22,663</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Derivative liabilities – convertible note conversion features</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">731,168</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">731,168</td><td style="width:1%;white-space: nowrap;"> </td></tr></tbody></table> The following table summarizes the changes in Level 3 derivative liabilities measured at fair value on a recurring basis for the three months ended August 31, 2026 and the year ended May 31, 2026. <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months endedAugust 31,2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Year endedMay 31,2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Balance at beginning of period</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">731,168</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">168,358</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Recognized on issuance of convertible notes</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">612,901</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,443,150</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Released to equity on conversion</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(144,708</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(23,951</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Reclassification of warrants from equity (Note 15)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">200,225</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Change in fair value recognized in earnings</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(251,619</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(856,389</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Balance at end of period</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,147,967</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">731,168</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> The gain of $207,733 presented in the condensed consolidated statement of operations for the three months ended August 31, 2026 comprises the $251,619 change in fair value shown above (including the $125,200 decrease in the fair value of the warrants from their issuance-date fair value of $200,225, reclassified from equity during the quarter as described in Note 15), net of $43,886 recognized on the initial measurement of the derivatives embedded in two of the notes issued during the quarter, for which the fair value of the conversion feature at issuance exceeded the proceeds remaining after original issue discount and issuance costs (Note 11). Of the $612,901 recognized on issuance, $569,014 was recorded as a debt discount. On each conversion during the quarter the embedded derivative was remeasured to fair value at the conversion date, with the change recognized in earnings, and the fair value attributable to the principal converted was reclassified to additional paid-in capital. At August 31, 2026 the derivative liabilities comprised $224,580 for the note issued under the Maintenance Agreement, $23,644 and $168,712 for Master Note Tranches 1 and 2, $656,006 in aggregate for the five notes issued during the quarter (Note 11) and $75,025 for the warrants (Note 15). Revenue RecognitionThe Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, as described in Note 1 to the 2026 Form 10-K. Revenue for the three months ended August 31, 2026 consisted substantially of carbon credit sales, subscription revenue from the mobile application and consulting and service revenue; the Company acted as principal for substantially all of its revenue. Consideration payable to a customer under the Maintenance Agreement is recognized as a reduction of the transaction price (Note 7). Technical advisory engagements whose deliverables are accepted by the customer on completion represent a single performance obligation that is satisfied at a point in time on delivery and acceptance of the deliverables; amounts invoiced in advance of delivery are recorded as contract liabilities within deferred revenue (Note 9). The following table disaggregates revenue by the jurisdiction of the contracting subsidiary: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2025</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">United States</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5,313</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td>$</td><td>-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Canada</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">336,294</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>30,006</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Cyprus</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>35,626,424</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Ireland</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Colombia</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2,360</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>2,503</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Spain</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td style="BORDER-BOTTOM: 1px solid;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Total revenue</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">343,967</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">35,658,933</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table>Revenue above is disaggregated by the jurisdiction of the contracting subsidiary, which is not necessarily the location of the customer. Foreign Currency TranslationThe reporting currency of the Company is the United States dollar. The functional currency of each entity is the currency of the primary economic environment in which it operates: the Canadian dollar for Karbon-X Project, Inc.; the United States dollar for Karbon-X Corp., Karbon-X USA Corp. and Allcot Limited; the euro for Karbon-X Trading Limited and Karbon-X Iberia SL; and the Colombian peso for Allcot X Colombia S.A.S. Assets and liabilities are translated at the closing exchange rate at the balance sheet date, income and expenses at the average rate for the period, and the resulting translation adjustments are included in accumulated other comprehensive income (loss). Realized and unrealized gains and losses on monetary balances denominated in currencies other than an entity’s functional currency are recognized in other income (expense). Loss per Common ShareBasic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated using the treasury stock and if-converted methods. For the three months ended August 31, 2026 and 2025 the Company reported a net loss and all potentially dilutive securities were therefore antidilutive and excluded from the calculation of diluted loss per share. As of August 31, 2026, potential dilutive securities of approximately 33,525,680 shares (May 31, 2026: 28,038,971 shares) had an anti-dilutive effect and were not included in the calculation of diluted net loss per share (Note 20). Segment ReportingThe Company’s Chief Executive Officer is the chief operating decision maker. He reviews financial information on a consolidated basis to allocate resources and assess performance, and does not review discrete measures of profit or loss or assets for any subsidiary, jurisdiction, product or activity. The Company therefore operates as a single operating and reportable segment, being the sourcing, development and sale of environmental credits. The chief operating decision maker reviews gross profit, EBITDA and net loss, each on a consolidated basis, together with the consolidated cash forecast. The measure of segment profit or loss reported below is consolidated net loss. Segment revenue, profit or loss and assets equal the corresponding consolidated amounts, so no reconciling items arise. The significant expense categories regularly provided to the chief operating decision maker, and the amount of other segment items, are set out in the table below. <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2025</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Revenue</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">343,967</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">35,658,933</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Cost of revenue</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(233,930</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(35,365,064</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Salaries and wages, excluding stock compensation</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(1,006,617</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (1,506,340</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Stock compensation</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(89,586</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (92,309</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Marketing expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(477,943</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(628,540</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Professional fees</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(338,135</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(107,447</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Travel and entertainment</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(39,557</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (25,218</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Depreciation and amortization</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(53,953</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (43,347</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Rent</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(29,800</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (67,578</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Dues and subscriptions</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(55,123</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (28,210</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Bank and transaction fees</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(9,131</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (17,279</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Provision for credit losses</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(489,274</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Other operating expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(153,272</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td style="BORDER-BOTTOM: 1px solid;"> (142,666</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total significant segment expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(2,976,321</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(38,023,998</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Revenue less significant segment expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(2,632,354</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(2,365,065</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Other segment items</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(1,322,684</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(231,169</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Net loss</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">(3,955,038</td><td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">(2,596,234</td><td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr></tbody></table>Stock compensation is option expense presented within salaries and wages; a further $153,707 of shares issued as compensation for services is recognized in other captions, and total share-based compensation of $243,292 is presented in the condensed consolidated statement of cash flows. Other segment items comprise interest income and expense, the loss on investment, the change in fair value of derivative liabilities and other non-operating items; income tax expense was nil in both periods. Segment assets equal consolidated total assets. ReclassificationsCertain amounts in the comparative condensed consolidated statement of cash flows for the three months ended August 31, 2025 have been reclassified to conform to the presentation adopted in the 2026 Form 10-K: the changes in marketable securities and in the securities receivable previously presented separately are combined in “Unrealized loss on equity securities and the related securities receivable, net”; proceeds from and payments on receivables financing obligations are presented net; and the acquisition of the project pipeline is presented as an investing activity under its current caption. These reclassifications had no effect on the previously reported net loss, comprehensive loss, total assets, shareholders’ equity or the totals of cash flows from operating, investing and financing activities. Recently Issued Accounting StandardsIn July 2025 the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which permits an entity to apply a practical expedient under which current conditions as of the balance sheet date are assumed to remain unchanged for the remaining life of current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The Company adopted the amendments prospectively on June 1, 2026. The adoption did not have a material effect on the condensed consolidated financial statements, as no allowance for credit losses is recognized on trade accounts receivable and those receivables are short-dated. ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, became effective for the Company on June 1, 2026. Conversions of convertible notes during the quarter were made under the original terms of the notes and no induced conversion occurred; adoption had no effect on the condensed consolidated financial statements. In May 2026 the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which establishes recognition, measurement, presentation and disclosure requirements for entities that generate, purchase or receive environmental credits. The standard is effective for public business entities for annual periods beginning after December 15, 2027, including interim periods within those periods, which for the Company is the fiscal year beginning June 1, 2028, with early adoption permitted. Because the Company generates, purchases and holds carbon credits, ASU 2026-02 is expected to be significant to the Company and management is assessing its effect on the consolidated financial statements. ASU 2024-03 and ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), are effective for the Company for the annual period beginning June 1, 2027 and interim periods beginning June 1, 2028. The updates affect disclosure only and are not expected to have a material effect. No other recently issued accounting standards are expected to have a material effect on the Company’s condensed consolidated financial statements.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended August 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2027. The condensed consolidated balance sheet at May 31, 2026 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by US GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2026, filed with the Securities and Exchange Commission on September 15, 2026 (the “2026 Form 10-K”). The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Karbon-X Project, Inc. (Canada), Karbon-X USA Corp. (Nevada), Karbon-X Trading Limited (Cyprus), Allcot Limited (Ireland), Karbon-X Iberia SL (Spain) and Allcot X Colombia S.A.S. (Colombia). All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements are presented in United States dollars.

The Company has generated significant revenue from its business operations but has incurred an accumulated deficit of $29,535,418 since inception. At August 31, 2026 the Company had negative working capital of $(7,297,897) and cash of $335,445. The Company will require additional funding to meet its ongoing obligations and to fund anticipated operating losses. The ability of the Company to continue as a going concern is dependent on raising capital to fund its business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued. The Company intends to continue to fund its business by way of private placements, note issuances and other financing arrangements as may be required, including the financings completed after the quarter end described in Note 24. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

-29535418

-7297897

335445

Preparation of the condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant estimates include the inputs used to value embedded derivatives, warrants and options, the expected credit losses on the loan receivable, the variable consideration under the Maintenance Agreement, the useful lives of long-lived assets and the realizability of deferred tax assets. Accordingly, actual results could differ from those estimates.

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"> </td><td style="width:4%;vertical-align:top;">·</td><td style="vertical-align:top;">Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;</td></tr><tr style="height:15px"><td> </td><td style="vertical-align:top;">·</td><td style="vertical-align:top;">Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and</td></tr><tr style="height:15px"><td> </td><td style="vertical-align:top;">·</td><td style="vertical-align:top;">Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.</td></tr></tbody></table> Other than the derivative liabilities presented below, the carrying amount of the Company’s financial assets and liabilities approximate their fair values. The securities receivable carried at May 31, 2026 was settled in shares of DevvStream Holdings Inc. (“DEVS”) during the quarter (Note 16) and no securities receivable remains at August 31, 2026. The Company measures certain financial instruments at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement. The conversion features embedded in certain of the Company’s convertible promissory notes require bifurcation and measurement at fair value as derivative liabilities under ASC 815-15. The valuation techniques applied at August 31, 2026 are those applied in the audited consolidated financial statements at May 31, 2026, with only the inputs updated to the measurement date: a conversion feature whose conversion price floats and whose 4.99% beneficial ownership limitation binds at the measurement date is measured by a path-dependent Monte Carlo simulation, and every other conversion feature is measured by a Cox-Ross-Rubinstein binomial lattice. At August 31, 2026 the beneficial ownership limitation binds only on the note issued under the Maintenance Agreement (Note 7), which is therefore measured by simulation; the Master Note tranches and the five notes issued during the quarter (Note 11) convert in full within the limitation and are measured on the lattice. The six-month conversion lockout and, for one note, the $0.15 minimum market price in the notes issued during the quarter are instrument terms entered as inputs and do not alter the technique. There was no change in valuation technique during the three months ended August 31, 2026. The models incorporate significant unobservable inputs, including expected stock price volatility, risk-free interest rates, estimated time to maturity, the conversion price at the measurement date and, for the simulation, the assumed rate at which the holder can dispose of conversion shares. Because these inputs are unobservable and require significant management judgment, the Company has classified the derivative liabilities as Level 3 in the fair value hierarchy. The derivative liabilities also include the common stock purchase warrants described in Note 15, measured using the Black-Scholes model with the same volatility and risk-free inputs; because the exercise price is $0.001 per share, their fair value approximates the market value of the underlying shares. The significant inputs at August 31, 2026 were: expected volatility of 59.15% to 65.8%, determined from a basket of guideline companies term-matched to the remaining life of each note because trading in the Company’s common stock is limited and sporadic; risk-free interest rates of 3.94% to 4.16% (United States Treasury constant maturity yields term-matched to the remaining life of each note); conversion prices at the measurement date of $0.07806 to $0.12121 per share, determined from the contractual formula of each note (for the notes whose conversion price is set by reference to the lowest trading price of the common stock, the lowest intraday trading price over the contractual look-back period); shares outstanding of 98,707,757 per the share count used in the valuation models; and, for the simulation, a disposal rate of 27,550 shares per trading day, being the median daily trading volume of the Company’s common stock over the term of the note to the measurement date (May 31, 2026: 15,000 shares per day, measured on the same basis). The simulation measured the derivative embedded in the note issued under the Maintenance Agreement at $224,580 at August 31, 2026; the measurement is sensitive to the disposal rate, which produces a value of approximately $187,340 at 15,000 shares per day and $246,503 at 35,000 shares per day, and approximately $706,628 if the beneficial ownership limitation were treated as a timing constraint only.The following table summarizes the fair value hierarchy of the Company’s financial assets and financial liabilities measured at fair value on a recurring basis as of August 31, 2026 and May 31, 2026: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Level 1</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Level 2</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Level 3</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Total</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px"><td colspan="16" style="vertical-align:bottom;">August 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Investments in equity securities Level 1</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">710,168</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">710,168</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Derivative liabilities – convertible note conversion features</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,072,942</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,072,942</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Derivative liabilities – warrants (Note 15)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">75,025</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">75,025</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td colspan="17" style="vertical-align:top;">May 31, 2026</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Investments in equity securities</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">22,663</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">22,663</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Derivative liabilities – convertible note conversion features</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">731,168</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">731,168</td><td style="width:1%;white-space: nowrap;"> </td></tr></tbody></table> The following table summarizes the changes in Level 3 derivative liabilities measured at fair value on a recurring basis for the three months ended August 31, 2026 and the year ended May 31, 2026. <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months endedAugust 31,2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Year endedMay 31,2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Balance at beginning of period</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">731,168</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">168,358</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Recognized on issuance of convertible notes</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">612,901</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,443,150</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Released to equity on conversion</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(144,708</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(23,951</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Reclassification of warrants from equity (Note 15)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">200,225</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Change in fair value recognized in earnings</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(251,619</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(856,389</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Balance at end of period</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,147,967</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">731,168</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> The gain of $207,733 presented in the condensed consolidated statement of operations for the three months ended August 31, 2026 comprises the $251,619 change in fair value shown above (including the $125,200 decrease in the fair value of the warrants from their issuance-date fair value of $200,225, reclassified from equity during the quarter as described in Note 15), net of $43,886 recognized on the initial measurement of the derivatives embedded in two of the notes issued during the quarter, for which the fair value of the conversion feature at issuance exceeded the proceeds remaining after original issue discount and issuance costs (Note 11). Of the $612,901 recognized on issuance, $569,014 was recorded as a debt discount. On each conversion during the quarter the embedded derivative was remeasured to fair value at the conversion date, with the change recognized in earnings, and the fair value attributable to the principal converted was reclassified to additional paid-in capital. At August 31, 2026 the derivative liabilities comprised $224,580 for the note issued under the Maintenance Agreement, $23,644 and $168,712 for Master Note Tranches 1 and 2, $656,006 in aggregate for the five notes issued during the quarter (Note 11) and $75,025 for the warrants (Note 15).

expected volatility of 59.15% to 65.8%, determined from a basket of guideline companies term-matched to the remaining life of each note because trading in the Company’s common stock is limited and sporadic; risk-free interest rates of 3.94% to 4.16% (United States Treasury constant maturity yields term-matched to the remaining life of each note); conversion prices at the measurement date of $0.07806 to $0.12121 per share, determined from the contractual formula of each note (for the notes whose conversion price is set by reference to the lowest trading price of the common stock, the lowest intraday trading price over the contractual look-back period); shares outstanding of 98,707,757 per the share count used in the valuation models; and, for the simulation, a disposal rate of 27,550 shares per trading day The simulation measured the derivative embedded in the note issued under the Maintenance Agreement at $224,580 at August 31, 2026; the measurement is sensitive to the disposal rate, which produces a value of approximately $187,340 at 15,000 shares per day and $246,503 at 35,000 shares per day, and approximately $706,628 if the beneficial ownership limitation were treated as a timing constraint only

710168

1072942

0 0 75025 75025

22663

731168

168358

612901 1443150 -144708 -23951 200225 0

-251619

-856389

1147967

731168

207733 251619 125200 200225 43886 612901 569014 224580 23644 168712 656006 75025

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, as described in Note 1 to the 2026 Form 10-K. Revenue for the three months ended August 31, 2026 consisted substantially of carbon credit sales, subscription revenue from the mobile application and consulting and service revenue; the Company acted as principal for substantially all of its revenue. Consideration payable to a customer under the Maintenance Agreement is recognized as a reduction of the transaction price (Note 7). Technical advisory engagements whose deliverables are accepted by the customer on completion represent a single performance obligation that is satisfied at a point in time on delivery and acceptance of the deliverables; amounts invoiced in advance of delivery are recorded as contract liabilities within deferred revenue (Note 9). The following table disaggregates revenue by the jurisdiction of the contracting subsidiary: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2025</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">United States</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5,313</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td>$</td><td>-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Canada</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">336,294</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>30,006</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Cyprus</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>35,626,424</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Ireland</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Colombia</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2,360</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>2,503</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Spain</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td style="BORDER-BOTTOM: 1px solid;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Total revenue</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">343,967</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">35,658,933</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table>Revenue above is disaggregated by the jurisdiction of the contracting subsidiary, which is not necessarily the location of the customer.

5313

336294

30006

35626424

2360

2503

343967

35658933

The reporting currency of the Company is the United States dollar. The functional currency of each entity is the currency of the primary economic environment in which it operates: the Canadian dollar for Karbon-X Project, Inc.; the United States dollar for Karbon-X Corp., Karbon-X USA Corp. and Allcot Limited; the euro for Karbon-X Trading Limited and Karbon-X Iberia SL; and the Colombian peso for Allcot X Colombia S.A.S. Assets and liabilities are translated at the closing exchange rate at the balance sheet date, income and expenses at the average rate for the period, and the resulting translation adjustments are included in accumulated other comprehensive income (loss). Realized and unrealized gains and losses on monetary balances denominated in currencies other than an entity’s functional currency are recognized in other income (expense).

Basic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated using the treasury stock and if-converted methods. For the three months ended August 31, 2026 and 2025 the Company reported a net loss and all potentially dilutive securities were therefore antidilutive and excluded from the calculation of diluted loss per share. As of August 31, 2026, potential dilutive securities of approximately 33,525,680 shares (May 31, 2026: 28,038,971 shares) had an anti-dilutive effect and were not included in the calculation of diluted net loss per share (Note 20).

33525680

28038971

The Company’s Chief Executive Officer is the chief operating decision maker. He reviews financial information on a consolidated basis to allocate resources and assess performance, and does not review discrete measures of profit or loss or assets for any subsidiary, jurisdiction, product or activity. The Company therefore operates as a single operating and reportable segment, being the sourcing, development and sale of environmental credits. The chief operating decision maker reviews gross profit, EBITDA and net loss, each on a consolidated basis, together with the consolidated cash forecast. The measure of segment profit or loss reported below is consolidated net loss. Segment revenue, profit or loss and assets equal the corresponding consolidated amounts, so no reconciling items arise. The significant expense categories regularly provided to the chief operating decision maker, and the amount of other segment items, are set out in the table below. <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2025</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Revenue</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">343,967</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">35,658,933</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Cost of revenue</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(233,930</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(35,365,064</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Salaries and wages, excluding stock compensation</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(1,006,617</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (1,506,340</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Stock compensation</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(89,586</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (92,309</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Marketing expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(477,943</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(628,540</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Professional fees</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(338,135</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(107,447</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Travel and entertainment</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(39,557</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (25,218</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Depreciation and amortization</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(53,953</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (43,347</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Rent</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(29,800</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (67,578</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Dues and subscriptions</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(55,123</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (28,210</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Bank and transaction fees</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(9,131</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (17,279</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Provision for credit losses</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(489,274</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Other operating expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(153,272</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td style="BORDER-BOTTOM: 1px solid;"> (142,666</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total significant segment expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(2,976,321</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(38,023,998</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Revenue less significant segment expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(2,632,354</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(2,365,065</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Other segment items</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(1,322,684</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(231,169</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Net loss</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">(3,955,038</td><td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">(2,596,234</td><td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr></tbody></table>Stock compensation is option expense presented within salaries and wages; a further $153,707 of shares issued as compensation for services is recognized in other captions, and total share-based compensation of $243,292 is presented in the condensed consolidated statement of cash flows. Other segment items comprise interest income and expense, the loss on investment, the change in fair value of derivative liabilities and other non-operating items; income tax expense was nil in both periods. Segment assets equal consolidated total assets.

<table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Three months ended August 31, 2025</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Revenue</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">343,967</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">35,658,933</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Cost of revenue</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(233,930</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(35,365,064</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Salaries and wages, excluding stock compensation</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(1,006,617</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (1,506,340</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Stock compensation</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(89,586</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (92,309</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Marketing expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(477,943</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(628,540</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Professional fees</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(338,135</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(107,447</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Travel and entertainment</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(39,557</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (25,218</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Depreciation and amortization</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(53,953</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (43,347</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Rent</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(29,800</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (67,578</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Dues and subscriptions</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(55,123</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (28,210</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Bank and transaction fees</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(9,131</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td> (17,279</td><td style="width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Provision for credit losses</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(489,274</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Other operating expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(153,272</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td></td><td style="BORDER-BOTTOM: 1px solid;"> (142,666</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;">) </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total significant segment expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(2,976,321</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(38,023,998</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Revenue less significant segment expenses</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(2,632,354</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(2,365,065</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Other segment items</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(1,322,684</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(231,169</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Net loss</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">(3,955,038</td><td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">(2,596,234</td><td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr></tbody></table>

343967

35658933

233930

35365064

1006617

1506340

-89586

92309

477943

628540

338135

107447

39557

25218

53953

43347

-29800 67578 -55123 28210 -9131 17279

-489274

153272

142666

-2976321 -38023998 -2632354 -2365065

-1322684

-231169

-3955038

-2596234

153707

243292

Certain amounts in the comparative condensed consolidated statement of cash flows for the three months ended August 31, 2025 have been reclassified to conform to the presentation adopted in the 2026 Form 10-K: the changes in marketable securities and in the securities receivable previously presented separately are combined in “Unrealized loss on equity securities and the related securities receivable, net”; proceeds from and payments on receivables financing obligations are presented net; and the acquisition of the project pipeline is presented as an investing activity under its current caption. These reclassifications had no effect on the previously reported net loss, comprehensive loss, total assets, shareholders’ equity or the totals of cash flows from operating, investing and financing activities.

In July 2025 the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which permits an entity to apply a practical expedient under which current conditions as of the balance sheet date are assumed to remain unchanged for the remaining life of current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The Company adopted the amendments prospectively on June 1, 2026. The adoption did not have a material effect on the condensed consolidated financial statements, as no allowance for credit losses is recognized on trade accounts receivable and those receivables are short-dated. ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, became effective for the Company on June 1, 2026. Conversions of convertible notes during the quarter were made under the original terms of the notes and no induced conversion occurred; adoption had no effect on the condensed consolidated financial statements. In May 2026 the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which establishes recognition, measurement, presentation and disclosure requirements for entities that generate, purchase or receive environmental credits. The standard is effective for public business entities for annual periods beginning after December 15, 2027, including interim periods within those periods, which for the Company is the fiscal year beginning June 1, 2028, with early adoption permitted. Because the Company generates, purchases and holds carbon credits, ASU 2026-02 is expected to be significant to the Company and management is assessing its effect on the consolidated financial statements. ASU 2024-03 and ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), are effective for the Company for the annual period beginning June 1, 2027 and interim periods beginning June 1, 2028. The updates affect disclosure only and are not expected to have a material effect. No other recently issued accounting standards are expected to have a material effect on the Company’s condensed consolidated financial statements.

Note 2 – Prepaid Expenses As of August 31, 2026 and May 31, 2026, prepaid expenses consisted of the following. The prepaid biochar equipment deposit represents the 50% advance paid in February 2026 on equipment to be supplied to a related party project (Note 21); the remaining instalments, which fall due on dispatch and commissioning of the equipment, had not been invoiced as due at August 31, 2026 and are not recorded. <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31,2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Prepaid sponsorship and marketing</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">574,196</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">500,833</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Prepaid biochar equipment deposit</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">294,073</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">591,045</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Other prepaids</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">20,399</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">85,892</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">888,668</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,177,770</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31,2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Prepaid sponsorship and marketing</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">574,196</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">500,833</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Prepaid biochar equipment deposit</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">294,073</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">591,045</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Other prepaids</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">20,399</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">85,892</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">888,668</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,177,770</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> 574196 500833 294073 591045

20399

85892

888668

1177770

Note 3 – Inventory Inventory as of August 31, 2026 and May 31, 2026 consisted of the following: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Carbon credit inventory</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">721,012</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">649,973</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">721,012</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">649,973</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> 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.

721012 649973

721012

649973

Note 4 – Property and Equipment The amount of property and equipment as of August 31, 2026 and May 31, 2026 consisted of the following: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Furniture and fixtures</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">9,006</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">12,704</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Computer and equipment</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">9,222</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">4,356</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Total property cost</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">18,228</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">17,060</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Accumulated depreciation</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(10,546</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(9,056</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Property and equipment, net</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">7,682</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">8,004</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> Depreciation expense for the three months ended August 31, 2026 was $897. Total depreciation and amortization, including amortization of capitalized application development costs and of the acquired project pipeline, was $53,953 (three months ended August 31, 2025: $43,347). The Company purchased equipment of $576 during the quarter. Movements in cost and accumulated depreciation include the effect of translating balances held in Canadian dollars and Colombian pesos at the closing rate.

9006

12704

9222

4356

18228

17060

10546

9056

7682

8004

897

53953

43347

576

Note 5 – Acquired Project Pipeline On June 27, 2025 the Company completed the acquisition of specified assets, including intellectual property, a database, a project pipeline and contract rights, from Allcot AG. The acquisition was accounted for as an asset acquisition under ASC 805-50 and the acquired project pipeline is presented within intangible assets, as described in Note 5 to the 2026 Form 10-K. The acquired project pipeline comprised the following: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Acquired project pipeline, at cost</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">760,711</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">666,990</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Accumulated amortization</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(32,870</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(22,645</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Intangible assets, net</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">727,841</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">644,345</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table>Amortization is recognized on a straight-line basis over a weighted-average useful life of 27 years beginning July 1, 2025. Amortization expense of $6,836, translated at the average rate for the period, was recognized for the three months ended August 31, 2026. There were no additions during the quarter; the increase in the carrying amount reflects the translation of the Colombian-peso-denominated balance at the closing rate, with the translation difference recognized in the cumulative translation adjustment. Estimated annual amortization is approximately $27,300 for each of the next five fiscal years. No indicators of impairment were identified during the quarter.

760711 666990 32870 22645

727841

644345

P27Y

6836 27300 Note 6 – Contract Fulfillment Assets The Company capitalizes costs incurred to fulfill a contract with a customer in accordance with ASC 340-40-25-5 when such costs relate directly to an identified contract, generate or enhance resources that will be used to satisfy performance obligations under the contract, and are expected to be recovered through future contract revenues. Contract fulfillment assets represent costs incurred to fulfill the ABC Mangrove Senegal offtake contract with Woodside. The related performance obligations are expected to be satisfied over a period greater than twelve months from the balance sheet date, currently expected in late calendar 2027, and the asset is therefore presented as non-current. <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">ABC Mangrove Senegal – costs to fulfill the Woodside offtake contract</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">594,580</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">554,579</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">594,580</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">554,579</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> Costs of $40,301 were capitalized during the three months ended August 31, 2026, with the remainder of the movement arising from translation. No amortization was recorded because deliveries under the contract have not commenced; amortization will begin when the first credits are delivered to the customer. The asset is assessed for impairment at each reporting date; no impairment was recognized. Development cost prepayments received from the customer under the same contract are presented within deferred revenue (Note 9). <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">ABC Mangrove Senegal – costs to fulfill the Woodside offtake contract</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">594,580</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">554,579</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">594,580</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">554,579</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table>

594580

554579

594580

554579

Note 7 – Other Assets, Maintenance Agreement and Consideration Payable to a Customer On January 8, 2026, the Company entered into a Maintenance Agreement with an institutional lender that also holds convertible notes of the Company (the “Lender”) to provide property maintenance and related services at a commercial facility in Corsicana, Texas through October 2035. As consideration for the Lender’s execution of the agreement, the Company issued the Lender a convertible promissory note with an original principal amount of $1,682,000 and received no cash proceeds (Note 11). The Company accounts for the $1,682,000 as consideration payable to a customer and a reduction of the transaction price under ASC 606-10-32-25 and 32-27, recognized as the related fees are earned. Monthly fees earned under the agreement are applied against the outstanding balances of the Lender’s Master Note tranches rather than settled in cash. Fees earned during the three months ended August 31, 2026 were $36,859, representing three months of variable fees, and were offset in full by the release of the consideration payable to the customer, so that net revenue recognized under the agreement for the quarter was $nil. At August 31, 2026 the unamortized consideration payable to the customer was $1,583,710 (May 31, 2026: $1,620,569), of which $147,434 is presented within other current assets and $1,436,276 within other assets. Consideration under the agreement is entirely variable and is estimated using the expected value method, constrained to the amount for which a significant revenue reversal is not probable; the recoverability assessment described in Note 7 to the 2026 Form 10-K was updated at August 31, 2026 and no impairment was recognized. Other assets consisted of the following: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Consideration payable to a customer – Maintenance Agreement</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,436,276</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,473,135</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Deferred offering costs</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">47,790</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">34,289</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Long-term security deposits</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">10,599</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">10,651</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Due from related party (Note 21)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">29,292</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">29,253</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,523,957</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,547,328</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> The current portion of the consideration payable to a customer, $147,434, is presented within other current assets, which total $153,168 (May 31, 2026: $155,322).

1682000

36859

1583710

1620569

147434

1436276

1436276 1473135

47790

34289

10599

10651

29292 29253

1523957

1547328

147434

153168

155322

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. 2300000

0.1200

2666666

1769437

1765616

50419

46597

307707 489274

1117470

628196

651967

344260 81314

2192

83506

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: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Revenue deferred – credits not yet delivered</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,084,536</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,097,304</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Development cost prepayments received</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,042,458</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">502,458</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Other customer prepayments</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">36,059</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">192,329</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Contract liability – advisory services advance</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">107,112</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Deferred rent income – related party (Note 21)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">30,669</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">4,300,834</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">3,792,091</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> 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.

3084536

3097304

1042458 502458 36059 192329 107112 0 30669 0

4300834

3792091

3084536

1042458

540000

107112

3792091

157596

Note 10 – Other Current Liabilities Other current liabilities comprised the following: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Loan payable – short-term advance</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">360,594</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">363,777</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Employee and statutory payroll liabilities</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">177,655</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">153,835</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Value added and sales tax balances, net</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(7,518</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(143</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Goods received not invoiced</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">112,567</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">33,303</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Other accruals</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">11,407</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(9,099</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">654,705</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">541,673</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> On May 20, 2026 a British Columbia company listed on the TSX Venture Exchange advanced CAD $500,000 to Karbon-X Corp. The advance is unsecured, non-interest-bearing and repayable on November 20, 2026; it is remeasured at the closing rate and a foreign exchange gain of $3,183 was recognized during the quarter. Employee and statutory payroll liabilities comprise accrued salaries, accrued vacation, severance, service premium and mandatory social contributions, and are stated net of amounts prepaid.

360594

363777

177655

153835

7518

143

112567 33303 -11407 9099

654705

541673

3183 Note 11 – Convertible Notes During the three months ended August 31, 2026 the Company issued five convertible promissory notes to five lenders with an aggregate face amount of $773,500 and aggregate purchase prices of $670,500, reflecting original issue discounts of $84,000 and issuance costs of $19,000 withheld at closing: a $180,000 note issued July 17, 2026 (6% per annum); a $115,500 note issued August 7, 2026 (6%); a $203,000 note issued August 13, 2026 (10%), repayable in twelve monthly instalments of $18,608 beginning September 13, 2026 and issued with 101,500 restricted shares of common stock (Note 14); a $150,000 note issued August 18, 2026 (6%); and a $125,000 note issued August 25, 2026 (12%). Each note matures twelve months from its issuance date and becomes convertible six months after issuance at a conversion price equal to 60% of the lowest trading price of the common stock over the twenty prior trading days (four notes) or 75% of the five-day volume weighted average price subject to a $0.15 per share minimum market price (one note). Each note carries a 4.99% beneficial ownership limitation that may be increased to 9.99% on 60 days’ notice. The notes are unsecured obligations of the Company. A further note with a face amount of $325,000 was dated August 21, 2026 but had not been funded at August 31, 2026 and is not recognized in these condensed consolidated financial statements; see Note 24. The variable-price conversion features of the five notes were bifurcated as derivative liabilities under ASC 815-15 and measured at fair value at issuance in an aggregate amount of $612,901. Where the fair value of the conversion feature exceeded the proceeds remaining after original issue discount and issuance costs, the host note was recorded at nil and the excess of $43,886 was recognized as a loss on initial measurement within the gain (loss) on change in fair value of derivative liabilities; the remaining $569,014 was recorded as a debt discount. For the $203,000 note issued with 101,500 commitment shares, the proceeds remaining after the derivative were allocated between the note and the shares on the basis of their relative fair values, and $4,703 was allocated to the shares. Together with the original issue discounts, issuance costs and the amount allocated to the commitment shares, total debt discounts of $676,717 were recorded on the notes issued during the quarter and are amortized to interest expense on a straight-line basis over the twelve-month terms of the notes.During the three months ended August 31, 2026 the holders of four notes converted principal and accrued interest into 3,231,320 shares of common stock (Note 14): the holder of Master Note Tranche 1 delivered five notices of conversion for 2,220,000 shares at conversion prices of $0.1106 to $0.1528 per share, reducing the principal of that tranche to $74,747 at August 31, 2026; the $250,000 non-current note issued in fiscal 2025 was converted in full on July 31, 2026, together with $133,333 of accrued interest, into 511,111 shares at $0.75 per share; the remaining $40,296 balance of a note issued in fiscal 2026 was converted in full on July 22, 2026 into 268,640 shares at $0.15 per share; and a further fiscal 2026 note was settled in full on August 12, 2026 by the issuance of 231,569 shares at $0.14175 per share, including guaranteed interest. The Company also repaid principal of $169,856 in cash on three fiscal 2026 notes during the quarter, and $36,859 of maintenance fees earned under the Maintenance Agreement (Note 7) were applied against the Master Note balances rather than settled in cash. Debt discount released on the Tranche 1 conversions was recorded within additional paid-in capital, as was the fair value of the embedded derivative attributable to the principal converted, measured at each conversion date (Note 1); a $1,750 fee per conversion notice was recognized in interest expense. Interest expense on the convertible notes for the three months ended August 31, 2026 included $403,410 of debt discount amortization. The discount on Master Note Tranche 1 is amortized on a straight-line basis over the remaining term of the note to maturity, and the unamortized discount attributable to principal settled during the period is written off pro rata on settlement — to additional paid-in capital for principal converted into common stock and to interest expense for principal settled by application of maintenance fees. Accrued interest payable of $111,094 at August 31, 2026 (May 31, 2026: $182,688) comprises $112,045 on the Lender’s notes, $62,500 on a note converted in a prior year, $3,357 on the notes issued during the quarter, net of $66,806 of interest prepaid on the term note described in Note 12. The notes outstanding at August 31, 2026 are convertible at discounts ranging from 60% to 85% of the trading or volume weighted average price over defined measurement periods preceding conversion, subject in certain cases to a floor price and to beneficial ownership limitations of 4.99% or 9.99%. The Company may prepay the principal amount and any unpaid interest at any time, provided that a minimum of six months’ interest is payable regardless of the prepayment date. Convertible notes payable consisted of the following: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Lender – Maintenance Note</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,682,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,682,000</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Lender – Master Note Tranche 1</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">74,747</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">388,450</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Lender – Master Note Tranche 2</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">500,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">500,000</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Note issued fiscal 2025 – one lender (non-current, converted July 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">250,000</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Notes issued fiscal 2026 – other lenders</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">32,281</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">259,486</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Debtfund L.P. – CPN #2 (August 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">203,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">CFI Capital (July 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">180,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">GW Capital (August 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">115,500</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Auctus Fund (August 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">150,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">SilverCrest Hybrid Capital (August 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">125,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Total principal outstanding</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,062,528</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,079,936</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Less: unamortized debt discount</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(1,102,625</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(923,880</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Less: amounts classified as non-current</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(250,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Convertible notes payable, current, net of discounts</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,959,903</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,906,056</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> As of August 31, 2026, the Company had convertible note principal outstanding of $3,062,528, unamortized debt discounts of $1,102,625, accrued interest payable of $111,094 and embedded derivative liabilities of $1,072,942. All convertible notes outstanding at August 31, 2026 mature within twelve months and are classified as current.

773500

670500

reflecting original issue discounts of $84,000 and issuance costs of $19,000 withheld at closing: a $180,000 note issued July 17, 2026 (6% per annum); a $115,500 note issued August 7, 2026 (6%); a $203,000 note issued August 13, 2026 (10%), repayable in twelve monthly instalments of $18,608 beginning September 13, 2026 and issued with 101,500 restricted shares of common stock (Note 14); a $150,000 note issued August 18, 2026 (6%); and a $125,000 note issued August 25, 2026 (12%). Each note matures twelve months from its issuance date and becomes convertible six months after issuance at a conversion price equal to 60% of the lowest trading price of the common stock over the twenty prior trading days (four notes) or 75% of the five-day volume weighted average price subject to a $0.15 per share minimum market price (one note). Each note carries a 4.99% beneficial ownership limitation that may be increased to 9.99% on 60 days’ notice. The notes are unsecured obligations of the Company. A further note with a face amount of $325,000 was dated August 21, 2026 but had not been funded at August 31, 2026 and is not recognized in these condensed consolidated financial statements; see Note 24

612901

43886

569014

$203,000 note issued with 101,500 commitment shares, the proceeds remaining after the derivative were allocated between the note and the shares on the basis of their relative fair values, and $4,703 was allocated to the shares. Together with the original issue discounts, issuance costs and the amount allocated to the commitment shares, total debt discounts of $676,717 were recorded on the notes issued during the quarter and are amortized to interest expense on a straight-line basis over the twelve-month terms of the notes

3,231,320 shares of common stock (Note 14): the holder of Master Note Tranche 1 delivered five notices of conversion for 2,220,000 shares at conversion prices of $0.1106 to $0.1528 per share, reducing the principal of that tranche to $74,747 at August 31, 2026; the $250,000 non-current note issued in fiscal 2025 was converted in full on July 31, 2026, together with $133,333 of accrued interest, into 511,111 shares at $0.75 per share; the remaining $40,296 balance of a note issued in fiscal 2026 was converted in full on July 22, 2026 into 268,640 shares at $0.15 per share; and a further fiscal 2026 note was settled in full on August 12, 2026 by the issuance of 231,569 shares at $0.14175 per share, including guaranteed interest. The Company also repaid principal of $169,856 in cash on three fiscal 2026 notes during the quarter, and $36,859 of maintenance fees earned under the Maintenance Agreement (Note 7) were applied against the Master Note balances rather than settled in cash. Debt discount released on the Tranche 1 conversions was recorded within additional paid-in capital, as was the fair value of the embedded derivative attributable to the principal converted, measured at each conversion date (Note 1); a $1,750 fee per conversion notice was recognized in interest expense

403410

111094

182688

comprises $112,045 on the Lender’s notes, $62,500 on a note converted in a prior year, $3,357 on the notes issued during the quarter, net of $66,806 of interest prepaid on the term note described in Note 12

0.60

0.85

0.0499 0.0999

<table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Lender – Maintenance Note</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,682,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,682,000</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Lender – Master Note Tranche 1</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">74,747</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">388,450</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Lender – Master Note Tranche 2</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">500,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">500,000</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Note issued fiscal 2025 – one lender (non-current, converted July 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">250,000</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Notes issued fiscal 2026 – other lenders</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">32,281</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">259,486</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Debtfund L.P. – CPN #2 (August 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">203,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">CFI Capital (July 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">180,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">GW Capital (August 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">115,500</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Auctus Fund (August 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">150,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">SilverCrest Hybrid Capital (August 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">125,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Total principal outstanding</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,062,528</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,079,936</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Less: unamortized debt discount</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(1,102,625</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(923,880</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Less: amounts classified as non-current</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(250,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Convertible notes payable, current, net of discounts</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,959,903</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,906,056</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table>

1682000

74747

388450

500000

250000

32281

259486

203000

180000

115500

150000

125000

3062528

3079936

1102625

923880

250000

1959903

1906056

3062528

1102625

111094

1072942

Note 12 – Long-Term Debt On November 24, 2025 the Company drew a note from a lender with a face amount of $5,000,000. The note bears interest at 18% per annum, payable monthly in advance, has a five-year term and matures in November 2030. Principal amortizes at $833,333 per month beginning with payment 55; scheduled principal maturities are $nil in each of the fiscal years ending May 31, 2027 through 2030 and $5,000,000 in the fiscal year ending May 31, 2031. Amortization of $6,738 of debt discount and issuance costs was recognized in interest expense for the three months ended August 31, 2026, leaving $112,302 unamortized at that date. Interest of $236,389 was paid in cash during the quarter and $(66,806) of interest prepaid at closing remains netted within convertible notes – interest payable. <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Term note – face amount</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5,000,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5,000,000</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Unamortized debt discount and issuance costs</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(112,302</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(119,040</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Total long-term debt</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">4,887,698</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">4,880,960</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table>The note is secured by a security interest in substantially all of the present and future assets of Karbon-X Corp., including a collection account into which specified receipts are deposited, and is supported by a limited-recourse personal guarantee from the Company’s Chief Executive Officer (Note 21). The loan agreement restricts the Company from granting other liens on its assets, subject to permitted exceptions. See Note 13 for the assets pledged as collateral.

5000000

0.18

833333

5000000

6738

112302 236389 66806 <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Term note – face amount</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5,000,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5,000,000</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Unamortized debt discount and issuance costs</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(112,302</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(119,040</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Total long-term debt</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">4,887,698</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">4,880,960</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table>

5000000

-112302 -119040

4887698

4880960

Note 13 – Receivables Financing Obligations and Term Loan Karbon-X Project Inc. is party to receivables financing arrangements under which providers advance cash in exchange for a specified purchased amount of the Company’s future receivables. Because the Company has not surrendered control over the receivables, the arrangements do not meet the conditions for derecognition under ASC 860 and are accounted for as secured borrowings: the receivables remain on the condensed consolidated balance sheet and the obligations are carried at the net proceeds received, accreted to the purchased amount using the effective interest method under ASC 835-30, with the accretion recorded in interest expense. During the three months ended August 31, 2026 the Company repaid in full the merchant cash advance funded on April 28, 2026, remitting CAD $598,582 on June 10, 2026 after a CAD $50,000 early payoff discount, with the difference between the amount remitted and the carrying value recognized in interest expense; drew a CAD $600,000 term loan on July 2, 2026 from an affiliate of the same provider under a loan agreement dated June 26, 2026, bearing interest at a fixed rate, with CAD $49,000 of underwriting and documentation fees withheld at funding and recorded as a discount, repayable in 36 weekly instalments of CAD $23,316.67 to March 15, 2027 and guaranteed by the Company, two other subsidiaries and the Chief Executive Officer; the term loan is a borrowing rather than a sale of receivables and is presented separately as term loan payable, carried at amortized cost with its discount accreted to interest expense using the effective interest method; received $460,000 on July 22, 2026 under a new merchant cash advance against a purchased amount of $644,000, repayable in 36 weekly pre-authorized debits of $17,888.89 ; and received $60,063, net of underwriting fees, on August 27, 2026 under a purchase and sale of receivables agreement with a purchase price of $70,058 against purchased receivables of $105,018 . The arrangement funded on April 24, 2026 continued to self-liquidate through weekly remittances. Finance charges of $276,770 on the receivables financing arrangements and accretion of $62,579 on the term loan (presented within amortization of debt discount in the statement of cash flows) were recognized in interest expense for the quarter. Receivables financing obligations and the term loan consisted of the following: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Provider A – merchant cash advance funded April 28, 2026 (repaid June 10, 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">332,897</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Provider B – merchant cash advance funded April 24, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">56,877</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">258,183</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Term loan payable – Provider A affiliate, Loan Agreement dated June 26, 2026, funded July 2, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">326,113</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Provider C – merchant cash advance funded July 22, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">265,249</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Provider D – receivables purchase funded August 27, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">50,525</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total receivables financing obligations and term loan</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">698,764</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">591,080</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Less: term loan payable, presented separately</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">(326,113</td><td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Receivables financing obligations</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">372,651</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">591,080</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> The receivables financing obligations and the term loan are secured by a general security interest in the present and after-acquired personal property of Karbon-X Project Inc., including its accounts receivable, inventory and equipment, and one of the arrangements is personally guaranteed by the Company’s Chief Executive Officer (Note 21). The Company entered into further receivables financing arrangements after the quarter end; see Note 24. Assets pledged as collateralThe term note described in Note 12 is secured by a security interest in substantially all of the present and future assets of Karbon-X Corp., the parent company, including its equity interests in and intercompany claims against its subsidiaries. Assets of Karbon-X Corp. recognized in the condensed consolidated balance sheet at August 31, 2026, after elimination of intercompany balances, were $2,466,129, comprising principally cash, the loan receivable and the consideration payable to a customer. The receivables financing obligations are secured by the personal property of Karbon-X Project Inc., whose assets recognized in the condensed consolidated balance sheet at that date, after elimination of intercompany balances, were $2,897,410, of which accounts receivable, inventories of $721,012 and property and equipment are the principal components. The financing providers do not have the right to sell or repledge the collateral. The convertible notes described in Note 11 are unsecured. Company repaid in full the merchant cash advance funded on April 28, 2026, remitting CAD $598,582 on June 10, 2026 after a CAD $50,000 early payoff discount, with the difference between the amount remitted and the carrying value recognized in interest expense; drew a CAD $600,000 term loan on July 2, 2026 from an affiliate of the same provider under a loan agreement dated June 26, 2026, bearing interest at a fixed rate, with CAD $49,000 of underwriting and documentation fees withheld at funding and recorded as a discount, repayable in 36 weekly instalments of CAD $23,316.67 to March 15, 2027 and guaranteed by the Company the term loan is a borrowing rather than a sale of receivables and is presented separately as term loan payable, carried at amortized cost with its discount accreted to interest expense using the effective interest method; received $460,000 on July 22, 2026 under a new merchant cash advance against a purchased amount of $644,000, repayable in 36 weekly pre-authorized debits of $17,888.89 ; and received $60,063, net of underwriting fees, on August 27, 2026 under a purchase and sale of receivables agreement with a purchase price of $70,058 against purchased receivables of $105,018 . The arrangement funded on April 24, 2026 continued to self-liquidate through weekly remittances. Finance charges of $276,770 on the receivables financing arrangements and accretion of $62,579 on the term loan (presented within amortization of debt discount in the statement of cash flows) were recognized in interest expense for the quarter <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Provider A – merchant cash advance funded April 28, 2026 (repaid June 10, 2026)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">332,897</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Provider B – merchant cash advance funded April 24, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">56,877</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">258,183</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Term loan payable – Provider A affiliate, Loan Agreement dated June 26, 2026, funded July 2, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">326,113</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Provider C – merchant cash advance funded July 22, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">265,249</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Provider D – receivables purchase funded August 27, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">50,525</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total receivables financing obligations and term loan</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">698,764</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">591,080</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Less: term loan payable, presented separately</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">(326,113</td><td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Receivables financing obligations</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">372,651</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">591,080</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> 0 332897 56877 258183 326113 0 265249 0 50525 0 698764 591080 -326113 0 372651 591080

2466129

2897410

721012

Note 14 – Shareholders’ Equity During the three months ended August 31, 2026, the Company issued 3,231,320 shares of common stock upon conversion of convertible notes payable and accrued interest with a recorded value of $806,517 (Note 11), comprising Master Note Tranche 1 2,220,000; MRK-X 511,111; Debtfund L.P. 268,640; FirstFire 231,569 shares. During the three months ended August 31, 2026, the Company issued 831,909 shares of common stock as compensation for services with a recorded value of $153,707, comprising 315,244 shares issued to a provider of legal services at $0.159 to $0.16 per share, 416,665 shares issued to a consultant at $0.20 per share and 100,000 shares issued to a broker-dealer at $0.20 per share, and 101,500 commitment shares in connection with the $203,000 convertible note described in Note 11, to which $4,703 of the note proceeds was allocated on a relative fair value basis and recorded in additional paid-in capital and as a debt discount against the note. On August 12, 2026 the Company received $125,000 from an existing investor and issued 250,000 shares of common stock at $0.50 per share, effective August 12, 2026. At August 31, 2026 there were 99,299,757 shares of common stock issued and outstanding per the Company’s records and the transfer agent. During the three months ended August 31, 2026, the Company recorded option compensation expense of $89,586 (Note 18) and reduced additional paid-in capital by $37,125 to correct the recording of a note conversion in fiscal 2026 for which the principal had been repaid in cash and applied against a prepaid balance rather than settled in shares; the correction is not material to the previously issued financial statements or to the current period and has been recorded in the current period as an out-of-period adjustment. The Company also reclassified $200,225 from additional paid-in capital to derivative liabilities on the reclassification of the warrants described in Note 15. At August 31, 2026 there were 99,299,757 shares of common stock issued and outstanding (May 31, 2026: 94,885,028).

3231320 806517

831909

153707

315244 416665

100000

101500 4703 250000 99299757

89586

37125

200225

99299757

94885028

Note 15 – Warrants No warrants were issued, exercised, forfeited or expired during the three months ended August 31, 2026. The 508,064 common stock purchase warrants issued in fiscal 2026 in connection with the Lender’s Master Note facility (250,000 issued January 8, 2026 and 258,064 issued February 18, 2026, each with an exercise price of $0.001 per share, a five-year term, cash or cashless exercise and a 4.99% beneficial ownership limitation) remain outstanding and exercisable. The warrants permit the holder, at its election, to substitute for the exercise price the variable price of any security the Company subsequently issues at a price that varies with the market price of the common stock, and require the Company to purchase the warrants for cash at their Black-Scholes value at the holder’s request following an event of default under the related notes. Because the warrants are therefore not indexed solely to the Company’s own stock and could require net cash settlement in circumstances outside the Company’s control, they do not meet the conditions for equity classification in ASC 815-40 and are accounted for as derivative liabilities measured at fair value, with changes in fair value recognized in earnings. In the 2026 Form 10-K the warrants were classified in permanent equity at their issuance-date fair value of $200,225. During the three months ended August 31, 2026 the Company reclassified the warrants to derivative liabilities, recording a liability of $75,025, being their fair value at August 31, 2026 determined using the Black-Scholes model (closing price $0.1485, exercise price $0.001, remaining terms of 4.4 to 4.5 years, expected volatility 85% and a risk-free rate of 3.94%), and a gain of $125,200 within gain on change in fair value of derivative liabilities, of which $113,768 represents the decrease in fair value between issuance and May 31, 2026 that would have been recognized in fiscal 2026 had the warrants been classified as liabilities at issuance. Management evaluated the misclassification under SEC Staff Accounting Bulletins No. 99 and No. 108 and concluded that it was not material to the previously issued fiscal 2026 financial statements or to the current period, and has corrected it in the current period as an out-of-period adjustment. At August 31, 2026 the warrants had a weighted average remaining contractual life of 4.42 years and an aggregate intrinsic value of approximately $74,939, based on the $0.1485 closing price of the common stock on August 31, 2026 less the exercise price. Warrants issued after the quarter end are described in Note 24.<table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td></td><td style="white-space: nowrap;"></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Number</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"></td><td style="white-space: nowrap;"></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Weighted average exercise price</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"></td><td style="white-space: nowrap;"></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Weighted average remaining contractual life (years)</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Outstanding May 31, 2026</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">508,064</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.001</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">4.60</td><td style="width:1%;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Granted</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Exercised</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Expired</td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Outstanding and exercisable August 31, 2026</td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">508,064</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0.001</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">4.42</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"></td></tr></tbody></table> 508064

250000

258064

0.001

0.0499 200225 a liability of $75,025, being their fair value at August 31, 2026 determined using the Black-Scholes model (closing price $0.1485, exercise price $0.001, remaining terms of 4.4 to 4.5 years, expected volatility 85% and a risk-free rate of 3.94%), and a gain of $125,200 within gain on change in fair value of derivative liabilities, of which $113,768 represents the decrease in fair value between issuance and May 31, 2026

P4Y5M1D

74939 0.148 <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td></td><td style="white-space: nowrap;"></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Number</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"></td><td style="white-space: nowrap;"></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Weighted average exercise price</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"></td><td style="white-space: nowrap;"></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Weighted average remaining contractual life (years)</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Outstanding May 31, 2026</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">508,064</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.001</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">4.60</td><td style="width:1%;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Granted</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Exercised</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Expired</td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Outstanding and exercisable August 31, 2026</td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">508,064</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0.001</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"></td><td style="width:1%;white-space: nowrap;"></td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"></td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">4.42</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"></td></tr></tbody></table>

508064

0.001

P4Y7M6D 0

508064

0.001

P4Y5M1D

Note 16 – Investments and Securities Receivable On October 24, 2024, Karbon-X Corp. entered into a Carbon Credit Purchase Agreement with DEVS with an aggregate value of $1,137,197, under which the Company received DEVS common shares subject to a price floor under which DEVS is required to issue additional shares if gross proceeds from the sale of those shares are below $1,137,197. The Carbon Credit Forward Purchase Agreement with DEVS dated October 28, 2024 was terminated by a Mutual Termination Agreement effective May 29, 2026 and executed on July 7, 2026, and the related securities receivable and deferred revenue were derecognized at May 31, 2026, as described in Note 16 to the 2026 Form 10-K. On June 24, 2026 the Company and DEVS entered into a Share Cancellation Addendum under which the 17,495 shares held by the Company were cancelled and 4,641,621 shares were issued in settlement of the remaining securities receivable of $1,128,863 under the Carbon Credit Purchase Agreement. The exchange settled the securities receivable in shares with no change in the aggregate carrying value of the position at that date and is presented as a non-cash investing activity. Also on June 24, 2026 the common shares of DEVS were delisted from the Nasdaq Stock Market and are now quoted on the OTC market. Following the exchange the Company holds 4,641,621 DEVS shares and no securities receivable remains; the shares are held by a subsidiary whose functional currency is the Canadian dollar and are measured at fair value through net income under ASC 321 at the quoted closing price on the last trading day of the period, translated at the closing exchange rate. At August 31, 2026 the shares were measured at USD $0.1530 per share, or $710,168 in aggregate, and an unrealized loss of $427,029 on the position was recognized in the condensed consolidated statement of operations within gain (loss) on investment, which amounted to $(422,410) for the quarter after translation at the average rate for the period. Because the price floor was settled by the June 24, 2026 share issuance, the Company no longer has a contractual entitlement to additional shares and the full change in the fair value of the shares is recognized in earnings. <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Investments in equity securities</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">710,168</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">22,663</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Securities receivable</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">-</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">1,128,863</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">710,168</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">1,151,526</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table>

1137197

17495

4641621

1128863

measured at USD $0.1530 per share, or $710,168 in aggregate, and an unrealized loss of $427,029 on the position was recognized in the condensed consolidated statement of operations within gain (loss) on investment, which amounted to $(422,410) for the quarter after translation at the average rate for the period

710168

22663

1128863

710168

1151526

Note 17 – Internally Developed Software The Company capitalizes the costs of developing its mobile applications as internal-use software under ASC 350-40, as described in Note 17 to the 2026 Form 10-K. As of August 31, 2026 and May 31, 2026, the Company had capitalized application development costs, net of accumulated amortization, of $333,723 and $382,323, respectively. Gross capitalized cost was $595,921 and $598,858 and accumulated amortization was $262,198 and $216,535, respectively. The Company recorded amortization expense of $46,219 for the three months ended August 31, 2026 (three months ended August 31, 2025: $43,200). There were no additions during the quarter; two applications remained in the application development stage at August 31, 2026 and are carried as in-process software of $35,227 that is not yet amortized. Movements in the gross and accumulated amortization balances include the effect of translating the Canadian-dollar-denominated balances at the closing rate.

333723

382323

595921

598858

262198

216535

46219

43200

35227

Note 18 – Stock Option Plan The Company’s 2024 Employees’, Directors’, Officers’, and Consultants’ Stock Option Plan (the “Plan”), as amended, authorizes the issuance of options to purchase up to 15,000,000 shares of common stock, and is described in Note 18 to the 2026 Form 10-K. The Plan is administered by the Compensation Committee of the Board of Directors; options have a maximum term of ten years and options may not be granted under the Plan after December 31, 2026.On June 4, 2026 the Board of Directors approved grants of options to purchase 2,849,200 shares of common stock at an exercise price of $0.23 per share, including 1,500,000 options granted to the Chief Executive Officer in replacement of 900,000 options at $0.75 per share granted in June 2024 that were cancelled on the same date; the cancellation and replacement were accounted for as a modification under ASC 718-20-35-8 and only the incremental fair value of $188,020 is recognized over the requisite service period. On June 24, 2026 the Board granted 60,000 fully vested options at an exercise price of $0.90 per share. During the quarter 318,450 options at $0.75 per share expired unexercised following the departure of the holders. No options were exercised or forfeited. <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Number of shares</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Weighted average exercise price</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Weighted average remaining life (years)</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Options authorized</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">15,000,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" colspan="2" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" colspan="2" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Outstanding at May 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,595,450</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.82</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3.31</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Granted</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2,909,200</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.24</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5.00</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Exercised</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Cancelled</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(900,000</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.75</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Expired</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(318,450</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0.75</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;"> </td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Outstanding at August 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5,286,200</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.52</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">4.07</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Exercisable at August 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,933,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.84</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>3.13</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Unvested at August 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,353,200</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>0.33</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>4.60</td><td style="width:1%;white-space: nowrap;"> </td></tr></tbody></table> The weighted average exercise price of options granted during the quarter was $0.24 (2,849,200 at $0.23 and 60,000 at $0.90). As of August 31, 2026, the intrinsic value of the 5,286,200 outstanding options was $0, as the exercise prices of all outstanding options exceeded the $0.1485 closing market price of the common stock on August 31, 2026. Options available for future grant under the Plan at August 31, 2026 were 9,353,800. Fair Value of OptionsThe fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Options granted during the three months ended August 31, 2026 used the following weighted-average assumptions: expected volatility of 55.5%, determined by reference to the historical volatility of guideline companies over a one-year window because trading in the Company’s common stock is limited and sporadic ; expected life of 5 years; risk-free interest rate of 4.0%; and an expected dividend yield of 0%. The grant-date fair value of the June 4, 2026 options was $0.1452 per option, based on the $0.2625 closing price of the common stock on the grant date. Stock-Based Compensation ExpenseFor the three months ended August 31, 2026, the Company recognized stock-based compensation expense related to stock options of $89,586 (three months ended August 31, 2025: $92,309), presented within salaries and wages. A further $153,707 of share-based compensation on shares issued for services is recognized within the captions to which the services relate. As of August 31, 2026, unrecognized compensation cost related to unvested stock options was approximately $562,730, expected to be recognized over a weighted-average period of approximately 1.15 years as the options vest.

the issuance of options to purchase up to 15,000,000 shares of common stock 2849200

0.23

1500000

900000

0.75

188020 60000

0.90

318450

0.75

<table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Number of shares</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Weighted average exercise price</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Weighted average remaining life (years)</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Options authorized</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">15,000,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" colspan="2" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" colspan="2" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Outstanding at May 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,595,450</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.82</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3.31</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Granted</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2,909,200</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.24</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5.00</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Exercised</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">-</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Cancelled</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(900,000</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.75</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;"> </td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Expired</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(318,450</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0.75</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;"> </td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Outstanding at August 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5,286,200</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.52</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">4.07</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Exercisable at August 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,933,000</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.84</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>3.13</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Unvested at August 31, 2026</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,353,200</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>0.33</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td></td><td>4.60</td><td style="width:1%;white-space: nowrap;"> </td></tr></tbody></table>

15000000

3595450

0.82

P3Y3M21D

2909200

0.24

P5Y

900000

0.75

318450

0.75

5286200

0.52

P4Y25D

1933000

0.84 P3Y1M17D

3353200

0.33 P4Y7M6D

0.24

5286200

0.148

9353800

0.555

P5Y

0.040

0.145 0.262

89586

92309

153707 562730

P1Y1M24D

Note 19 – Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Given the Company’s history of operating losses and negative evidence outweighing positive evidence, the Company maintains a full valuation allowance against its net deferred tax assets in each of its tax jurisdictions. Accordingly, no income tax expense or benefit was recognized for the three months ended August 31, 2026 or 2025 and the effective tax rate for both periods was 0%. The Company evaluates its deferred tax assets and the valuation allowance at each reporting date; there was no change in that assessment during the quarter. No income taxes were paid in any jurisdiction during either period. The Company remains subject to the uncertainties described in Note 19 to the 2026 Form 10-K regarding loss carryforwards by jurisdiction, the filing of United States federal income tax returns and any limitation under Section 382 of the Internal Revenue Code; because the deferred tax assets are fully reserved, the outcome of that work is not expected to affect the net deferred tax position.

Note 20 – Loss Per Share Basic loss per share is calculated by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period, determined by weighting each issuance by the number of days it was outstanding, including the 250,000 shares issued for cash described in Note 14 from their effective date of August 12, 2026. Diluted loss per share is calculated using the treasury stock and if-converted methods. For the three months ended August 31, 2026 and 2025 the Company reported a net loss and all potentially dilutive securities were therefore antidilutive and excluded from the calculation of diluted loss per share. Basic and diluted loss per share for the three months ended August 31, 2026 was $(0.04) on a weighted average of 96,547,583 shares, compared with $(0.03) on 82,305,910 shares for the three months ended August 31, 2025. The following potentially dilutive securities were excluded from the calculation of diluted loss per share: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">August 31, 2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">May 31,2026</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Options outstanding</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5,286,200</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,595,450</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Warrants outstanding</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">508,064</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">508,064</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Convertible notes, if converted</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">27,731,416</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">23,935,457</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">33,525,680</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">28,038,971</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"> </td></tr></tbody></table> Shares issuable on conversion of the notes outstanding at August 31, 2026 have been estimated using conversion prices of $0.0781 to $0.1212 per share, derived from the discount-to-market formulas in the respective notes applied to the trading prices of the common stock at August 31, 2026; the notes issued during the quarter are not convertible until six months after issuance. The beneficial ownership limitations in the notes restrict the number of shares any one holder may hold at a single point in time but do not limit the aggregate number issuable over time.

250000

-0.04

96547583

-0.03

82305910

5286200

3595450

508064

27731416

23935457

33525680

28038971

0.078

0.121

Note 21 – Related Party Transactions Revive Terra Corp. (“Revive”) is an entity related to the Company through common ownership with members of management (ownership that does not constitute control). The Company subleases part of its Calgary premises to Revive at CAD $4,725 per month and recharges travel and related costs to Revive under a cost-sharing arrangement. On June 11, 2026 the sublease rent receivable from Revive at May 31, 2026 of $41,132 (CAD $56,753), together with the rent for the twelve months from June 2026 to May 2027, was converted into a convertible promissory note receivable from Revive with a face amount attributable to rent of USD $81,314 (CAD $113,400 at a fixed rate of 1.3946), bearing interest at 12% per annum, maturing June 11, 2027 and convertible at the Company’s option into common shares of Revive at $0.30 per share. The note is measured at amortized cost, is presented together with accrued interest as convertible note receivable – related party on the condensed consolidated balance sheet and is classified as current; the holder’s conversion option is not bifurcated because Revive is a private company and the option has no net settlement. At August 31, 2026 the note receivable was $81,314, accrued interest receivable was $2,192, the related deferred rent income for the unexpired portion of the twelve-month period was $30,669 (Note 9) and the receivable for recharged costs, recorded within other assets, was $29,292 (May 31, 2026: $29,253). Sublease income of $10,112 was recognized within other income (expense) for the quarter. The Company is party to an employment contract with Chad Clovis, Chief Executive Officer, President and Director, under which Mr. Clovis is paid an annual salary of $450,000. On June 4, 2026 the 900,000 options held by Mr. Clovis were cancelled and replaced by a grant of 1,500,000 options at $0.23 per share (Note 18). Mr. Clovis has provided a limited-recourse personal guarantee of the term note described in Note 12 and a personal guarantee of one of the receivables financing arrangements described in Note 13; no consideration was paid to Mr. Clovis for these guarantees and no amount has been recognized in respect of them. There were no other related party transactions during the three months ended August 31, 2026. Subsequent to the quarter end the Company entered into a one-year consulting agreement with a related party, as consideration for which it issued a convertible promissory note with a principal amount of $1,500,000 on the terms described in Note 24.

41132

attributable to rent of USD $81,314 (CAD $113,400 at a fixed rate of 1.3946), bearing interest at 12% per annum, maturing June 11, 2027 and convertible at the Company’s option into common shares of Revive at $0.30 per share. The note is measured at amortized cost, is presented together with accrued interest as convertible note receivable – related party on the condensed consolidated balance sheet and is classified as current; the holder’s conversion option is not bifurcated because Revive is a private company and the option has no net settlement. At August 31, 2026 the note receivable was $81,314, accrued interest receivable was $2,192, the related deferred rent income for the unexpired portion of the twelve-month period was $30,669 (Note 9) and the receivable for recharged costs

29292

29253

450000

900,000 options held by Mr. Clovis were cancelled and replaced by a grant of 1,500,000 options at $0.23 per share 1500000

Note 22 – Concentrations Revenue. For the three months ended August 31, 2026, $336,294, or 97.8%, of consolidated revenue was earned by Karbon-X Project Inc., the Company’s Canadian subsidiary. No revenue was earned by Karbon-X Trading Limited, the Cyprus subsidiary that accounted for 85.7% of consolidated revenue in fiscal 2026, because the industrial carbon credit trading conducted through that subsidiary did not recur in the quarter. Trade receivables. At August 31, 2026 one customer accounted for $540,000, or approximately 99%, of trade accounts receivable, arising from the development-cost advance invoiced under the ABC Mangrove Senegal offtake contract on July 28, 2026 (Note 9); the balance was current at that date and the corresponding amount is included in deferred revenue. The Company performs ongoing credit evaluations of its customers, does not require collateral, and has recognized no allowance for credit losses on trade receivables at August 31, 2026 or May 31, 2026. Cash. The Company maintains cash with financial institutions in Canada, the United States, Cyprus, Ireland, Spain and Colombia. Balances may from time to time exceed amounts insured by the relevant deposit insurance schemes. The Company has not experienced any losses on such balances. Long-lived assets, comprising property and equipment and right-of-use assets, were held in Canada and Colombia; the Company held no long-lived assets in the United States, its country of domicile.

336294

0.978 0.857

540000

0.99

Note 23 – Commitments and Contingencies Legal ProceedingsOn October 6, 2026 the Company issued a formal demand for repayment of the loan receivable described in Note 8 and has not received a response; the Company is evaluating enforcement proceedings. The conditions underlying the demand existed at August 31, 2026 and were considered in measuring the allowance for credit losses at that date. There were no other new litigation, claims or assessments during the quarter. See Note 24 regarding the Edmonton Oilers advertising and promotional agreement and the settlement of a carbon credit purchase agreement. Operating LeasesThe Company has entered into an operating lease for office space in Calgary, Alberta commencing on July 1, 2025 with a term of five years, expiring on June 30, 2030. Monthly payments, which are denominated in Canadian dollars and include the tenant’s proportionate share of occupancy costs, are CAD $14,179 to June 2027, CAD $14,733 to June 2029 and CAD $15,288 thereafter. The Company subleases part of the premises to a related party (Note 21); the head lease and the sublease are accounted for separately and the right-of-use asset and lease liabilities remain recognized. Lease right-of-use assets and lease liabilities are recognized at the commencement of the lease based on the present value of lease payments over the lease term using the Company’s estimated incremental borrowing rate. Leases with an initial term of twelve months or less, including the Company’s New York and remote office arrangements and a Texas office arrangement at $105 per month under a one-year agreement, are not recorded on the balance sheet. The Company recognized total lease expense of approximately $29,800 for the three months ended August 31, 2026 (three months ended August 31, 2025: $67,578), including short-term lease costs. Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year at August 31, 2026, translated at the closing rate, were as follows: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td style="BORDER-BOTTOM: #000000 1px solid;vertical-align:bottom;">Fiscal year ending May 31,</td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Total</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">2027 (remaining nine months)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">92,030</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">2028</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">127,106</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">2029</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">127,506</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">2030</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">131,905</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Thereafter</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">11,025</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total lease payments</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">489,572</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Less: imputed interest</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(45,479</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Operating lease liabilities</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">444,093</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Operating lease liability – current</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">103,638</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Operating lease liability – non-current</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">340,455</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Weighted average discount rate</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5.00</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Weighted average remaining lease term (years)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3.83</td><td style="width:1%;white-space: nowrap;"> </td></tr></tbody></table>

on July 1, 2025 with a term of five years, expiring on June 30, 2030 Canadian dollars and include the tenant’s proportionate share of occupancy costs, are CAD $14,179 to June 2027, CAD $14,733 to June 2029 and CAD $15,288 thereafter 29800 67578

<table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td style="BORDER-BOTTOM: #000000 1px solid;vertical-align:bottom;">Fiscal year ending May 31,</td><td style="white-space: nowrap;"> </td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;">Total</td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">2027 (remaining nine months)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">92,030</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">2028</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">127,106</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">2029</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">127,506</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">2030</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">131,905</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Thereafter</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">11,025</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Total lease payments</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">489,572</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Less: imputed interest</td><td style="width:1%;white-space: nowrap;"> </td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"> </td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(45,479</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Operating lease liabilities</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">444,093</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Operating lease liability – current</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">103,638</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Operating lease liability – non-current</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">340,455</td><td style="width:1%;white-space: nowrap;"> </td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Weighted average discount rate</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">5.00</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Weighted average remaining lease term (years)</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3.83</td><td style="width:1%;white-space: nowrap;"> </td></tr></tbody></table>

92030

127106

127506

131905

11025

489572

45479

444093

103638

340455

0.0500

P3Y9M29D

Note 24 – Subsequent Events The Company evaluated subsequent events through October 20, 2026, the date these condensed consolidated financial statements were originally issued, and identified the following non-recognized subsequent events. These condensed consolidated financial statements have not been updated for events occurring after that date. Convertible notesBetween September 2 and September 25, 2026 the Company issued five promissory notes to institutional and individual investors with an aggregate face amount of $644,000, including original issue discounts of $51,000, for aggregate cash proceeds of approximately $0.57 million after costs. The notes bear interest at 6% to 12% per annum and mature between nine and twelve months from issuance; two are repayable in monthly instalments. One note was issued with 40,000 commitment shares of common stock and one with a three-year warrant to purchase 150,000 shares of common stock at $0.50 per share. The notes are convertible into common stock at fixed or variable prices, in two cases only following an event of default. On September 25, 2026 the $325,000 convertible promissory note dated August 21, 2026 described in Note 11 was funded at par and the related three-year warrant to purchase 325,000 shares of common stock at $0.50 per share was issued. The Company will account for the embedded conversion features of the new notes under ASC 815 in the second quarter. Receivables financingIn September 2026 Karbon-X Project Inc. received CAD $400,000 under two new merchant cash advance arrangements with the providers of its existing arrangements (aggregate purchased amount CAD $559,800, repayable in aggregate weekly remittances of CAD $18,660) and a second advance under the purchase and sale of receivables agreement entered into in August 2026 and described in Note 13. Subsequent to quarter end the August 2026 arrangement, including the second advance, was repaid in full. As with the Company’s other receivables financing arrangements, the new advances do not qualify for sale accounting under ASC 860 and are accounted for as secured borrowings. RepaymentsSubsequent to August 31, 2026 the Company settled in full the remaining obligation to the holder of a convertible note that had been fully converted during the quarter, and repaid the receivables financing arrangement described above. No gain or loss arose on these settlements. Conversions and share issuancesSubsequent to August 31, 2026, three investors converted convertible notes payable and accrued interest totaling $560,325 into 3,841,666 shares of common stock. The Company also issued 8,000,000 restricted shares of common stock under the advisory and marketing services agreement described below, 217,236 shares valued at $27,155 for legal services and 40,000 commitment shares in connection with the convertible note financings described above. Following these issuances the Company had approximately 109.2 million shares of common stock issued and outstanding at October 15, 2026. Advisory and marketing services agreementOn September 16, 2026 the Board of Directors approved by unanimous written consent a six-month advisory and marketing services agreement with a United Kingdom advisory firm, under which the Company will pay a cash fee of $500,000 in two instalments of $250,000 in September 2026 and issued 8,000,000 restricted shares of common stock. The share consideration will be measured at fair value on the grant date and recognized over the service period. Advertising and promotional agreementSubsequent to August 31, 2026, Oilers Entertainment Group Canada Corp. (“OEG”) advised the Company that it would not proceed with the third contract year (July 1, 2026 to June 30, 2027) of the advertising and promotional agreement described in Note 23 to the 2026 Form 10-K and that it intends to demand payment of the outstanding instalments for the 2025–26 contract year. No invoice was issued and no advertising or promotional rights were received for the third contract year, and accordingly no cost has been recognized for it in the three months ended August 31, 2026. The outstanding 2025–26 instalments of CAD $1,615,628 (approximately $1,165,173) are included in accounts payable at August 31, 2026. The Company is in discussions with OEG regarding settlement of the balance and the terms of the cancellation; any amount that may become payable on cancellation in excess of the recorded liability is not presently estimable. Trade financingOn October 9, 2026 Karbon-X Project Inc. entered into a loan agreement with a trade finance lender for EUR 4,570,000, together with an establishment fee of EUR 165,000, maturing 45 days after drawdown. The lender disbursed the loan directly to the supplier of German greenhouse gas reduction quotas (THG-Quoten) purchased by the Company for resale; the Company received no cash proceeds. The purchase will be recorded as inventory and the loan as a borrowing in the second quarter, and the drawdown will be presented as a non-cash financing activity. Consulting agreementsIn October 2026 the Company entered into four one-year consulting agreements for business development, market and shareholder relations services. As consideration, the Company issued the consultants unsecured convertible promissory notes with an aggregate principal amount of $5,000,000, bearing interest at 10% per annum, maturing one year from issuance and convertible at the holder’s option at $1.00 per share, one of which is convertible at the lesser of $1.00 per share and a discount to the market price subject to a floor of $0.15 per share. The notes were fully earned on issuance. One of the consultants is a related party (Note 21). The Company will account for the notes, including the evaluation of the conversion features under ASC 815, and the related services in the second quarter. Carbon credit purchase agreementUnder an emissions reduction purchase agreement entered into in December 2025 for the purchase of 36,781 carbon credits, the seller had not delivered the credits by August 31, 2026 and the Company issued a notice of breach on October 14, 2026. On October 19, 2026 the parties entered into a waiver and release under which the Company will accept 31,433 credits in full satisfaction of the seller’s delivery obligations for CAD $1,967,232 (approximately $1,418,745 at the August 31, 2026 closing rate), payable three business days after delivery; the waiver becomes effective on delivery of the credits. No amount was recorded in respect of the agreement at August 31, 2026 as no credits had been delivered.

644000

51000

570000 0.06 0.12 40000 150000

0.50

325000 325000

0.50

400000 559800 18660 560325

3841666

8000000 217236 27155 40000 109200000 500000 250000

8000000

The outstanding 2025–26 instalments of CAD $1,615,628 (approximately $1,165,173) are included in accounts payable at August 31, 2026. entered into a loan agreement with a trade finance lender for EUR 4,570,000, together with an establishment fee of EUR 165,000, maturing 45 days after drawdown.

5000000

0.10

1.00

0.15 36781 On October 19, 2026 the parties entered into a waiver and release under which the Company will accept 31,433 credits in full satisfaction of the seller’s delivery obligations for CAD $1,967,232 (approximately $1,418,745 at the August 31, 2026 closing rate), payable three business days after delivery; the waiver becomes effective on delivery of the credits.