UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~February~~August 2831, 2025

Commission File Number 000-56288

KARBON-X CORP.

(Exact name of registrant as specified in its charter)

Nevada

82-2882342

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

~~1720,~~6575 ~~540~~West -Loop ~~5th Avenue S.W. Calgary~~South, Suite ~~Alberta~~500 ~~T2P 0M2~~Bellaire, TX 77401

(Address of principal executive offices) (Zip Code)

~~778~~844-~~256~~462-~~5730~~3637

(Registrant’s telephone number, including area code)

____________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act

Title of Each Class

Trading Symbol(s)

Name of each Exchange

on which registered

N/A

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large, accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of ~~April~~October 1813, 2025, there were 8487,~~357~~163,~~362~~ 563 shares of common stock issued and outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		4
	Item 1. Financial Statements	4
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	27
	Item 3. Quantitative and Qualitative Disclosures about Market Risk	30
	Item 4. Controls and Procedures	30
PART II—OTHER INFORMATION		31
	Item 1. Legal Proceedings	31
	Item 1A. Risk Factors	31
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
	Item 3. Defaults Upon Senior Securities	31
	Item 4. Mine Safety Disclosures	31
	Item 5. Other Information	31
	Item 6. Exhibits	31

PART I - FINANCIAL INFORMATION	4

Item 1. Financial Statements	4

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3. Quantitative and Qualitative Disclosures about Market Risk	25

Item 4. Controls and Procedures	25

PART II—OTHER INFORMATION	26

Item 1. Legal Proceedings	26

Item 1A. Risk Factors	26

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3. Defaults Upon Senior Securities	26

Item 4. Mine Safety Disclosures	26

Item 5. Other Information	26

Item 6. Exhibits	26

Table of Contents

Contents

PART 1 FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets at February 28, 2025 (Unaudited) and May 31, 2024	4
Condensed Consolidated Balance Sheets at August 31, 2025 (Unaudited) and May 31, 2025	4
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended February 28, 2025, and February 29,2024 (Unaudited)	5
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended August 31, 2025, and August 31, 2024 (Unaudited)	5
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended February 28, 2025, and February 29,2024 (Unaudited)	6
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended August 31, 2025, and August 31, 2024 (Unaudited)	6
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended February 28, 2025 and February 29,2024 (Unaudited)	7
Condensed Consolidated Statements of Cash Flows for the Three Months Ended August 31, 2025, and August 31, 2024 (Unaudited)	7
Notes to the Consolidated Financial Statements	8

Table of Contents

~~PART I~~ KARBON-X ~~FINANCIAL INFORMATION~~CORP.

~~Item~~Condensed 1.Consolidated ~~Financial~~Balance ~~Statements~~Sheets

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	August 31, 2025			May 31, 2025
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	1,358,662		$	704,346
Accounts receivable, net		8,012			1,782
Inventories, net		847,017			99,644
Prepaid expenses and other current assets		194,413			865,674
Deposits		8,813			23,815
Investments in equity securities		142,922			301,260
Securities receivables		3,952,752			3,789,651
Total current assets		6,512,591			5,786,172

Property and equipment, net		5,373			6,132
Right of use asset, net		481,823			503,091
Other assets		10,695			10,682
Internally developed software, net		431,316			473,895
Total assets	$	7,441,798		$	6,779,972

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	961,910		$	1,091,701
Deferred Revenue		2,947,469			3,864,080
Related party loan		80,000			-
Other current liabilities		71,009			-
Payroll liabilities		27,913			21,146
Convertible notes payable, net of discounts		3,481,191			2,301,666
Convertible notes – interest payable		195,001			181,353
Embedded Derivative		351,630			168,358
Receivables financing obligation		161,898			-
Current portion of lease liabilities		80,793			60,475
Total current liabilities		8,358,814			7,688,779
Non-current portion of lease liabilities		428,523			460,266
Total liabilities		8,787,337			8,149,045

Commitments and contingencies		-			-

Stockholders’ equity (deficit)
Common stock $0.001 par value, 200,000,000 shares authorized, 86,973,148 and 81,992,857 shares issued and outstanding as of August 31, 2025 and May 31, 2025, respectively.		86,974			81,994
Additional Paid-in capital		13,029,618			10,563,141
Accumulated deficit		(14,587,068	)		(11,990,834	)
Accumulated other comprehensive gain (loss)		124,937			(23,374	)
Total stockholders’ equity		(1,345,539	)		(1,369,073	)
Total liabilities and stockholders’ equity	$	7,441,798		$	6,779,972

~~Karbon-X~~See ~~Corp~~notes to condensed consolidated financial statements.

	February 28, 2025			May 31, 2024
Assets
Current assets:
Cash	$	930,873		$	2,675,400
Accounts receivable, net		4,658			120,284
Inventories, net		93,960			316,738
Prepaid expenses		713,564			1,000
Deposits		606,998			-
Investments in equity securities		211,446			-
Securities receivables		3,689,467			-
Other current assets		57,484			-
Total current assets		6,308,450			3,113,422
Long-term assets:
Property, plant and equipment, net		5,000			6,918
Right-of-use Asset, net		482,667			316,519
Other assets		20,564			12,351
Capitalized App Development Costs, Net		492,966			521,372
Total assets	$	7,309,647		$	3,970,582
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	687,848		$	127,219
Deferred Revenue		3,684,616			-
Lease liabilities - Current		39,666			21,945
Short-term loan payable		-			36,500
Stock payable		-			630,000
Payroll payable		19,480			24,103
Convertible notes payable, net of discounts		1,207,635			-
Convertible notes - interest payable		44,116			-
Embedded Derivative		93,814			-
Other current liabilities		-			-
Total current liabilities		5,777,175			839,768
Long-term liabilities:
Long-term debt		-			-
Lease liabilities		451,729			302,557
Other liabilities		15,966			-
Total liabilities		6,244,870			1,142,325
Commitments and contingencies		-			-
Stockholders' equity:
Common stock Common stock $0.001 par value, 200,000,000 shares authorized, 84,061,489 and 82,174,750 shares issued and outstanding as of February 28, 2025 and May 31, 2024, respectively.		84,063			82,176
Additional paid-in capital		9,729,022			7,675,826
Accumulated deficit		(8,590,179	)		(4,937,342	)
Accumulated other comprehensive gain (loss)		(158,129	)		7,597
Total stockholders' equity		1,064,777			2,828,257
Total liabilities and stockholders' equity	$	7,309,647		$	3,970,582

Table of Contents

~~See~~KARBON-X ~~notes to condensed consolidated financial statements~~CORP.

4Condensed ~~Table~~Consolidated Statements of ~~Contents~~Operations and Comprehensive Income (Loss)

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~ (~~UNAUDITED~~Unaudited)

Karbon-X Corp.

	For the Three Months Ended			For the Three Months Ended
	August 31, 2025			August 31, 2024
Operations
Total revenue	$	35,658,933		$	127,429
Cost of revenue		35,365,064			94,098
Gross profit		293,869			33,331

Marketing expenses		628,540			12,351
Salaries and wages		1,598,649			533,594
Professional fees		107,447			145,273
Other operating expenses		324,298			134,466
Total operating expenses		2,658,934			825,684

Loss from Operations		(2,365,065	)		(792,353	)

Interest income (expense)		(306,262	)		(12,413	)
Gain (loss) on change in fair value of derivative liabilities		95,835			-
Other income (expenses)		(20,742	)		-
Net loss before income taxes		(2,596,234	)		(804,766	)
Federal income tax expense		-			-
Net loss		(2,596,234	)		(804,766	)

Other comprehensive loss
Foreign currency translation gain (loss)		148,311			33,381
Total comprehensive loss		(2,447,923	)		(771,385	)

Earnings Per Share
Weighted average basic and diluted shares outstanding		82,305,910			81,501,984
Basic and fully diluted loss per share	$	(0.03	)	$	(0.01	)

	Three Months Ended						Nine Months Ended
	February 28, 2025			February 29, 2024			February 28, 2025			February 29, 2024
Sales	$	238,528		$	247,222		$	1,530,349		$	287,062
Cost of sales		97,852			223,758			828,263			237,959
Gross profit		140,676			23,464			702,086			49,103
Operating expenses
Marketing expenses		528,150			66,629			915,494			95,468
Salaries and wages		841,890			149,533			2,176,431			464,274
Professional fees		184,068			51,188			688,634			201,650
Other operating expenses		267,664			127,513			631,807			262,302
Total operating expenses		1,821,772			394,863			4,412,366			1,023,694
Operating income (loss)		(1,681,096	)		(371,399	)		(3,710,280	)		(974,591	)
Other (expense) income:
Interest income (expense)		6,046			-			31,496			-
Other, net		(11,466	)		(99,872	)		25,947			(1,188,775	)
Income before income taxes		(1,686,516	)		(471,271	)		(3,652,837	)		(2,163,366	)
Income tax expense		-			-			-			-
Net income (loss)		(1,686,516	)		(471,271	)		(3,652,837	)		(2,163,366	)
Other comprehensive income (loss)
Foreign currency translation gain (loss)		(73,768	)		(20,561	)		(165,726	)		(30,941	)
Total comprehensive income (loss)	$	(1,760,284	)	$	(491,832	)	$	(3,818,563	)	$	(2,194,307	)
Earnings per share
Weighted average shares outstanding, basic and diluted.		79,207,432			77,617,191			80,580,044			77,017,953
Basic and diluted loss per share. and diluted		(0.02	)		(0.01	)		(0.05	)		(0.03	)

See notes to condensed consolidated financial statements.

~~See~~5 ~~notes~~Table toof ~~condensed consolidated financial statements.~~Contents

5KARBON-X ~~Table of Contents~~CORP.

~~CONDENSED~~Condensed ~~CONSOLIDATED~~Consolidated ~~STATEMENTS~~Statement OFof ~~CHAGES~~Changes INin ~~SHAREHOLDERS~~Stockholders’ ~~EQUITY (UNAUDITED)~~Equity

For the Three Months ~~and Nine Months~~ Ended ~~February~~August 2831, 2025 and ~~February 29,~~ 2024

~~Karbon-X Corp.~~(Unaudited)

	Common stock				Additional paid-in		Shares to		Retainedearnings			Accumulated other comprehensiveprofit			Total Stockholders'
	Shares		Amount		capital		be issued		(deficit)			(loss)			Equity
Balance at May 31, 2024		82,174,750	$	82,176	$	7,675,826		-	$	(4,937,342	)	$	7,597		$	2,828,257
Issuance of shares for cash, net of issuance cost		1,238,887		1,239		1,091,261		-		-			-			1,092,500
Net income (loss)		-		-		-		-		(804,766	)		-			(804,766	)
Foreign currency translation		-		-		-		-		-			33,381			33,381
Balance at August 31, 2024		83,413,637		83,415		8,767,087				(5,742,108	)		40,978			3,149,372
Issuance of shares for cash, net of issuance cost		155,771		156		138,313		-		-			-			138,469
Issuance of shares as compensation		-		-		290,263		-		-			-			290,263
Net income (loss)		-		-		-		-		(1,161,555	)		-			(1,161,555	)
Foreign currency translation		-		-		-		-		-			(125,339	)		(125,339	)
Balance at November 30, 2024		83,569,408		83,571		9,195,663		-		(6,903,663	)		(84,361	)		2,291,210
Issuance of shares for cash, net of issuance cost		492,081		492		442,381		-		-			-			442,873
Issuance of shares as compensation		-		-		90,978		-		-			-			90,978
Net income (loss)		-		-		-		-		(1,686,516	)		-			(1,686,516	)
Foreign currency translation		-		-		-		-					(73,768	)		(73,768	)
Balance at February 28, 2025		84,061,489	$	84,063	$	9,729,022		-	$	(8,590,179	)	$	(158,129	)	$	1,064,777

Three Months Ended August 31, 2024

	Common stock					~~Additional paid~~Additionalpaid-in			~~Shares to~~Retainedearnings			~~Retainedearnings~~Accumulated othercomprehensive			~~Accumulated~~Total ~~other comprehensiveprofit~~Stockholders'			~~Total Stockholders'~~
	Shares		Amount			capital			~~be issued~~(deficit)			profit (~~deficit~~loss)			~~(loss)~~Equity			~~Equity~~
Balance at May 31, 2023		72,579,000	$	72,579		$	2,638,532		$	1,750,000		$	(2,192,106	)	$	(3,786	)	$	2,265,219
Balance at May 31, 2024		82,174,750	$	82,176		$	7,675,826		$	(4,937,342	)	$	7,597		$	2,828,257
Issuance of shares for cash		31,~~274~~288,~~858~~890		31,~~275~~239			1,~~552~~091,~~396~~261			~~375,000~~-			-			-1,092,500			~~1,930,671~~
Issuance of shares as compensation		2,500,000		2,500			622,500			(625,000	)		-			-			-
Net income (loss)										(804,766	)		-			(804,766	)
Issuance if share upon convertible loan		200,000		200			99,800			-			-			-			100,000
Foreign currency translation										-			33,381			33,381
Net income (loss)		-		-			-			-			(350,032	)		-			(350,032	)
Balance at August 31, 2024		83,463,640	$	83,415		$	8,767,087		$	(5,742,108	)	$	40,978		$	3,149,372
Foreign currency translation		-		-			-			-			-			(3,223	)		(3,223	)
Balance at August 31, 2023		78,553,858		78,554			4,913,228			1,500,000			(2,542,138	)		(7,009	)		3,942,635
Issuance of shares for cash		50,000		50			99,950			-			-			-			100,000
Investment write-off in silviculture		-		-			-			(1,500,000	)		-			-			(1,500,000	)
Net income (loss)		-		-			-			-			(1,342,063	)		-			(1,342,063	)
Foreign currency translation		-		-			-			-			-			(7,157	)		(7,157	)
Balance at November 30, 2023		78,603,858		78,604			5,013,178			-			(3,884,201	)		(14,166	)		1,193,415
Issuance of shares for cash		61,111		61			(61	)		-			-			-			-
Issuance of shares as compensation		-		-			-			74,998			-			-			74,998
Offering expense		-		-			(3,832	)		-			-			-			(3,832	)
Net income (loss)		-		-			-			-			(471,271	)		-			(471,271	)
Foreign currency translation		-		(1	)		-			-			(652	)		(20,561	)		(21,214	)
Balance at February 29, 2024		78,664,969	$	78,664		$	5,009,285		$	74,998		$	(4,356,124	)	$	(34,727	)	$	772,096

~~See~~Three ~~notes~~Months toEnded ~~condensed~~August ~~consolidated~~31, ~~financial statements.~~2025

6 Table of Contents

	Common stock				Additional paid-in		Retained earnings			Accumulated other comprehensive			Total Stockholders'
	Shares		Amount		capital		(deficit)			profit (loss)			Equity
Balance at May 31, 2025		81,992,857	$	81,994	$	10,563,141	$	(11,990,834	)	$	(23,374	)	$	(1,369,073	)
Issuance of shares as compensation		110,000		110		94,890		-			-			95,000
Issuance of shares upon conversion of loan		4,870,291		4,870		2,279,278		-			-			2,284,148
Option compensation expense				-		92,309		-			-			92,309
Net income (loss)								(2,596,234	)	$	-			(2,596,234	)
Foreign currency translation											148,311			148,311
Balance at August 31, 2025		86,973,148	$	86,974	$	13,029,618	$	(14,587,068	)	$	124,937		$	(1,345,539	)

~~CONDENSED~~See ~~CONSOLIDATED~~notes ~~STATEMENTS~~to OFcondensed ~~CASH~~consolidated ~~FLOWS~~financial ~~(UNAUDITED)~~ statements.

~~Karbon-X~~6 ~~Corp.~~ Table of Contents

	Nine Months Ended
	February 28, 2025			February 29, 2024
Operating activities
Net income (loss)	$	(3,652,837	)	$	(2,163,366	)
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		1,918			1,099
Amortization of ROU		6,689			12,265
Loss on investment		-			1,191,890
Equity-based compensation expense		439,117			-
Changes in operating assets and liabilities:
Accounts receivable		115,626			(24,782	)
Inventories		222,778			(142,899	)
Prepaid expenses		(1,319,562	)		(34,708	)
Marketable securities		(211,446	)		-
Securities receivable		(3,689,467	)		-
ROU Asset		(172,837	)		-
Other current assets		(37,291	)		19,042
Accounts payable		(69,372	)		64,363
Deferred Revenue		3,684,617			-
Lease Liability		166,893			(9,073	)
Convertible Note		44,116
Other current liabilities		(25,157	)		48,021
Cash used in operating activities		(4,496,214	)		(1,038,148	)
Investing activities
Purchases of property, plant and equipment		-			(727,409	)
Other investing activities		-			-
Net cash used in investing activities		-			(727,409	)
Financing activities
Proceeds from convertible notes payable		1,207,634			-
Debt discount on convertible notes payable		93,814			-
Proceeds from sales of common stock, net of issuance costs		1,615,966			1,803,482
Net cash from financing activities		2,917,414			1,803,482
Change in cash and cash equivalents		(1,578,801	)		37,925
Effect of foreign exchange rate on cash		(165,726	)		(32,605	)
Cash -- beginning of period		2,675,400			206,820
Cash -- end of period	$	930,873		$	212,140
Supplemental disclosures of cash flow information:
Cash paid for interest		-			-
Cash paid for income taxes		-			-

KARBON-X CORP.

~~See~~Condensed ~~notes~~Consolidated toStatements ~~condensed~~of ~~consolidated~~Cash ~~financial statements.~~Flow

~~7 Table of Contents~~(Unaudited)

NOTE 1 – BACKGROUND, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

	For the Three Months Ended			For the Three Months Ended
	August 31, 2025			August 31, 2024
Cash flows from operating activities
Net (loss) income	$	(2,596,234	)	$	(804,766	)
Adjustments to reconcile net loss to net cash:
Depreciation and amortization expense		43,347			542
Gain on change in fair value of derivative		(95,835	)		-
Amortization of Right of Use Asset		21,842			320,061
Amortization of debt discount		102,182			-
Stock based compensation		187,309			-
Changes in operating assets and liabilities:
Sales tax receivable		-			(4,504	)
Accounts receivable		(6,230	)		56,181
Marketable securities		158,338			-
Due to related parties		-			(630,000	)
Securities receivable		(163,101	)		-
Accounts payable		(129,791	)		(16,596	)
Deferred revenue		(916,611	)		-
Other current liabilities		182,377			-
Inventory		(142,280	)		(46,155	)
Prepaid expenses		686,263			(8,246	)
Payments made on operating lease		(11,425	)		(328,134	)
Cash used in operating activities		(2,679,849	)		(1,460,119	)

Cash flows from investing activities
Acquisition of carbon projects		(605,093	)		-
Cash used in investing activities		(605,093	)		-

Cash flows from financing activities
Repayments from short term loan		-			(36,500	)
Proceeds from short term loan		49,645			-
Proceeds from related party loan		80,000			-
Proceeds from convertible notes		3,500,000			-
Proceeds from receivables financing obligation		388,800			-
Payments on receivables financing obligation		(226,902	)		-
Proceeds from issuance of shares		-			1,092,500
Cash provided by financing activities		3,791,543			1,056,000

Effect of translation changes on cash		147,715			27,565

Change in cash and cash equivalents		654,316			(376,555	)
Cash, beginning of period		704,346			2,675,400
Cash, end of period	$	1,358,662		$	2,298,845

Non cash investing and financing activities
Issuance of shares upon convertible loan principal and interest		2,284,148			-
Derivative recorded for debt discount at inception		279,107

Supplemental disclosures
Cash paid for interest	$	54,117		$	-
Cash paid for income taxes	$	-		$	-

~~Business~~See ~~Operations~~notes to condensed consolidated financial statements.

~~Karbon-X~~7 ~~Corp.~~Table ~~("Karbon-X" or the "Company") was incorporated in the State~~ of ~~Nevada on September 13, 2017, and established a fiscal year end of May 31.~~ Contents

OnNOTE 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 acquisition (the "Reverse Acquisition"). Pursuant to the Reverse Acquisition, all of the issued and outstanding shares of Karbon-X common stock were converted, at an exchange ratio of 20,000-for-1, ~~into~~– ~~an aggregate of 20~~BACKGROUND,~~000,000 shares~~ ofBASIS ~~the~~OF ~~Company's~~PRESENTATION ~~common~~AND ~~stock,~~SIGNIFICANT ~~resulting~~ACCOUNTING in Karbon-X becoming a wholly owned subsidiary of the Company and all debt owed to the related party of Cocoluv, Inc. was forgiven. The accompanying financial statements' share information has been retroactively adjusted to reflect the exchange ratio in the Reverse Acquisition. As part of the Reverse Acquisition, on April 14, 2022 the Company changed its name to Karbon-X Corp.POLICIES

~~Under~~Business generally accepted accounting principles in the United States ("US GAAP") because the combined entity will be dependent on Karbon-X's senior management, the Reverse Acquisition was accounted for as a recapitalization effected by a share exchange, wherein Karbon-X is considered the acquirer for accounting and financial reporting purposes. On the date of the reorganization, the assets and liabilities of Karbon-X have been brought forward at their book value and consolidated with Cocoluv, Inc.’s assets, which comprised of cash and cash equivalents of $134 and liabilities which comprises due to related party of $99,902 (see Note 1 Basis of Presentation below). No goodwill has been recognized. Accordingly, the assets and liabilities and the historical operations that are reflected in the consolidated financial statements are those of Karbon-X and are recorded at the historical cost basis of Karbon-X.Operations

~~The~~Karbon-X ~~Company~~Corp. ~~provides~~was ~~customized~~incorporated ~~transactional~~in ~~options,~~the ~~tailored~~State ~~insights,~~of ~~and~~Nevada ~~scalable~~under ~~access to~~ the ~~Verified~~name ~~Emissions~~Cocoluv, ~~Reduction markets~~Inc. ~~Karbon-X~~on ~~engages~~September ~~the~~13, ~~public~~2017 ~~with~~and ~~technology-based~~established ~~greenhouse~~a ~~gas~~fiscal ~~reduction~~year ~~projects,~~end ~~allowing the purchase~~ of ~~carbon~~May ~~offsets through a subscription-based app~~31.

~~Basis~~On February 21, 2022, pursuant to the terms of ~~Presentation~~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"). Pursuant to the Reverse Acquisition, all of the issued and outstanding shares of Karbon-X common stock were converted, at an exchange ratio of 20,000-for-1, into an aggregate of 20,000,000 shares of the Company's common stock, resulting in Karbon-X becoming a wholly owned subsidiary of the Company and all debt owed to the related party of Cocoluv, Inc. was forgiven. Karbon-X Project Inc. was incorporated in British Columbia on February 11, 2022 and established a fiscal year end of May 31. The accompanying financial statements' share information has been retroactively adjusted to reflect the exchange ratio in the Reverse Acquisition. As part of the Reverse Acquisition, on April 14, 2022 the Company changed its name to Karbon-X Corp.

~~The~~Under ~~consolidated~~generally ~~financial~~accepted ~~statements~~accounting ~~include~~principles in the ~~accounts~~United ofStates ("US GAAP"), because the ~~Company~~combined entity will be dependent on Karbon-X's senior management, the Reverse Acquisition was accounted for as a recapitalization effected by a share exchange, wherein Karbon-X is considered the acquirer for accounting and ~~its~~financial ~~subsidiary~~reporting purposes. ~~All~~On ~~significant~~the ~~intercompany~~date ~~accounts~~of the reorganization, the assets and ~~transactions~~liabilities of Karbon-X have been ~~eliminated~~brought inforward ~~consolidation~~at their book value and consolidated with Cocoluv, Inc.’s ~~The~~assets, ~~financial~~which ~~statements~~comprised ~~are~~of ~~presented~~cash inand ~~United~~cash ~~States~~equivalents ~~dollars~~of $134 and ~~prepared~~liabilities inwhich ~~accordance~~comprises ~~with~~due ~~accounting~~to ~~principles~~related ~~generally~~party ~~accepted~~of $99,902 (see Note 1 Basis of Presentation below). No goodwill has been recognized. Accordingly, the assets and liabilities and the historical operations that are reflected in the ~~United~~consolidated ~~States~~financial ~~(US~~statements ~~GAAP)~~are those of Karbon-X and are recorded at the historical cost basis of Karbon-X.

~~Use~~On June 27, 2025, the Company completed an asset acquisition consisting of ~~Estimates~~a portfolio of carbon-offset projects (the “Projects”). The transaction did not meet the definition of a business combination under ASC 805-10 because the acquired group of assets did not include an integrated set of activities capable of producing outputs. Accordingly, the acquisition has been accounted for as an asset acquisition in accordance with ASC 805-50. See Note 8 for further discussion.

~~The~~Going preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.Concern

~~Cash~~To date, the Company has generated minimal revenues from its business operations and ~~Cash~~has ~~Equivalents~~incurred operating losses since inception of $14,180,370. 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 initial 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. The Company intends to continue to fund its business by way of private placements and advances from related parties as may be required. 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.

~~Cash~~Basis ~~and cash equivalents include highly liquid investments with an original maturity~~ of ~~three months or less at the date of purchase.~~Presentation

8The ~~Table~~consolidated financial statements include the accounts of ~~Contents~~the Company and its subsidiaries. This includes newly formed subsidiaries, Karbon-X Trading LTD, Allcot Limited, Allcot Soluciones España S.L and Allcot X Colombia S.A.S, which are consolidated with the Company and existing subsidiaries, Karbon-X Project, Inc and Karbon-X USA Corp.

~~Accounts~~ All ~~Receivable~~significant intercompany accounts and transactions have been eliminated in consolidation.

~~Accounts~~The ~~receivable~~consolidated ~~represent~~financial ~~amounts~~statements ~~due~~present ~~from~~the ~~customers~~condensed ~~for~~consolidated ~~goods~~balance orsheets, ~~services~~condensed ~~provided~~consolidated bystatements of operations and comprehensive income (loss), condensed consolidated statements of stockholders’ equity and condensed consolidated statement of cash flows of the Company. ~~Accounts~~These ~~receivable~~consolidated financial statements are ~~recorded~~presented atin the ~~invoiced~~United ~~amount~~States dollar and have been prepared in accordance with accounting principles generally accepted in the United States.

In8 ~~accordance~~Table with Accounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326), also known as the Current Expected Credit Loss (CECL) model, the Company now utilizes a forward-looking approach to estimate expected credit losses over the lifetime of ~~the receivables. This model considers historical loss experience, current conditions, and reasonable and supportable forecasts to assess credit risk.~~Contents

~~Property~~Use ~~and~~of ~~Equipment~~Estimates

~~Property~~The ~~and~~preparation ~~equipment~~of ~~are~~financial ~~carried~~statements atin ~~cost~~conformity ~~less~~with ~~accumulated~~U.S. ~~depreciation~~GAAP requires management to make estimates and ~~amortization.~~assumptions ~~Depreciation~~that affect the reported amounts of assets, liabilities, revenues, and ~~amortization~~expenses, ~~are~~as ~~calculated~~well ~~using~~as ~~the~~related ~~straight-line~~disclosures ~~method~~of ~~over~~contingent ~~the~~assets ~~estimated~~and ~~useful~~liabilities ~~lives~~at the date of the ~~assets~~financial ~~which~~statements. ~~are~~Actual ~~all~~results ~~five~~could ~~years~~differ from those estimates.

~~Costs~~Cash ~~of major additions~~ and ~~improvements~~Cash are capitalized while expenditures for maintenance and repairs, which do not extend the life of the asset, are expensed. Upon sale or disposition of property and equipment, the cost and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or loss is credited or charged to income. Long-lived assets held and used by us are reviewed based on market factors and operational considerations for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.Equivalents

~~Investments~~ Cash and cash equivalents include highly liquid investments with an original maturity of three months or less at the date of purchase.

~~The~~Accounts Company accounts for investments with a 20% to 50% ownership and a significant, but not controlling influence as equity method investments. Investments with a greater than 50% ownership and a controlling influence are accounted for using the consolidation method. The Company assesses the potential impairment of equity method investments when indicators such as a history of operating losses, negative earnings and cash flow outlook, and the financial condition and prospects for the investee's business segment might indicate a loss in value. The Company previously accounted for its investment in Silviculture Systems using the equity method and its investment in its subsidiary Karbon-X Project, Inc using the consolidation method.Receivable

~~During~~Accounts ~~November~~receivable ~~2023,~~represent ~~the~~amounts ~~Company~~due ~~has~~from ~~abandoned~~customers ~~the~~for ~~silviculture~~goods ~~investment~~or ~~deal~~services ~~and~~provided ~~decided~~by ~~to write off~~ the ~~carrying value of the Equity Investment in Silviculture~~Company. ~~Accordingly,~~Accounts ~~amidst~~receivable ~~ongoing disputes which we~~ are ~~currently~~recorded ~~discussing,~~at the ~~Company~~invoiced ~~has~~amount, ~~written~~net ~~off the carrying value~~ of ~~Investment~~allowance of ~~USD~~ $~~2,564,203,~~0 ~~accumulated value of shares to be issued $1,500,000~~ and ~~recognized loss on write off~~ $~~1,064,203 in~~0 ~~its~~as ~~statement~~ of ~~operations~~August ~~for~~31, ~~the~~2025 ~~year~~and ~~ended~~ May 31, ~~2024~~2025, respectively.

~~Foreign~~In ~~Currency~~accordance ~~Translation~~ with Accounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326), also known as the Current Expected Credit Loss (CECL) model, the Company now utilizes a forward-looking approach to estimate expected credit losses over the lifetime of the receivables. This model considers historical loss experience, current conditions, and reasonable and supportable forecasts to assess credit risk.

~~The~~Property ~~functional~~and ~~currency of the Company is the Canadian Dollar (“CAD”). For financial statement purposes, the reporting currency is the United States Dollar (“USD”).~~Equipment

~~For~~Property ~~financial~~and ~~reporting~~equipment ~~purposes, the consolidated financial statements~~ are ~~translated~~carried ~~into~~at ~~the~~cost ~~Company’s~~less ~~reporting~~accumulated ~~currency,~~depreciation ~~USD~~and amortization. ~~Asset,~~Depreciation ~~liability~~ and ~~equity~~amortization ~~accounts~~ are ~~translated~~calculated using the ~~closing~~straight-line ~~exchange~~method ~~rate~~over ~~in effect at~~ the ~~balance~~estimated ~~sheet~~useful ~~date~~lives ~~and~~of ~~income~~the ~~and~~assets ~~expense~~which ~~accounts~~ are ~~translated~~all ~~using~~five ~~the average exchange rate prevailing during the reporting period~~years.

9Costs ~~Table~~of major additions and improvements are capitalized while expenditures for maintenance and repairs, which do not extend the life of ~~Contents~~the asset, are expensed. Upon sale or disposition of property and equipment, the cost and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or loss is credited or charged to income. Long-lived assets held and used by us are reviewed based on market factors and operational considerations for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

~~Adjustments~~Fair ~~resulting~~Value ~~from~~of ~~the~~Financial ~~translation,~~Instruments ~~if any, are included in accumulated other comprehensive loss in stockholder’s equity (deficit).~~

~~Warrants~~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:

~~There~~· isLevel ~~estimation~~1—Observable ~~uncertainty~~inputs ~~with~~that ~~respect~~reflect toquoted ~~selecting~~market ~~inputs~~prices to(unadjusted) ~~the~~for ~~Black-Sholes~~identical ~~model~~assets ~~used~~or toliabilities ~~determine~~in ~~the~~active ~~fair~~markets; ~~value~~· ofLevel a2—Observable ~~single~~inputs ~~outstanding~~other ~~warrant~~than ~~issuance~~quoted ~~(Note~~prices ~~10).~~in ~~These~~active ~~inputs~~markets ~~include~~that are observable either directly or indirectly in the ~~stock~~marketplace ~~price~~for ofidentical ~~$0.90,~~or ~~exercise~~similar ~~price~~assets ofand ~~$0.75, time~~liabilities; toand ~~maturity~~· ofLevel ~~two~~3—Unobservable ~~years,~~inputs ~~annual~~that ~~risk-free~~are ~~interest~~supported ~~rate~~by ~~ranging~~little ~~from 4.33%~~or ~~- 4.74%~~no market data, ~~and~~which ~~annualized~~require ~~volatility~~the ~~ranging~~Company ~~from 1294.9%~~to ~~- 1279~~develop its own assumptions.~~3%.~~

~~The~~Other ~~above~~than ~~estimates~~the ~~and~~derivative ~~assumptions~~liabilities ~~are~~presented ~~reviewed~~below, ~~regularly. Revisions to accounting estimates are recognized in~~ the ~~period~~carrying inamount ~~which~~of the ~~estimates~~Company’s ~~are~~financial ~~revised~~assets and inliabilities ~~any~~approximate ~~future~~their ~~periods~~fair ~~affected~~values.

~~Significant~~9 ~~Estimates~~Table of Contents

~~Significant~~The ~~estimates~~Company ~~applied~~measures incertain ~~the~~financial ~~preparation~~instruments ofat ~~these~~fair ~~financial~~value ~~statements~~on ~~include~~a ~~the~~recurring ~~estimated~~basis ~~useful~~in ~~lives~~accordance ofwith ~~property~~ASC ~~and equipment~~820, ~~share~~Fair ~~volatility~~Value ~~and~~Measurement. ~~estimated~~As ~~life~~ of ~~options~~May ~~and~~31, ~~warrants~~2025, inthe ~~determining~~Company ~~their~~evaluated ~~fair~~the ~~value~~conversion asfeatures ~~well~~embedded asin ~~the~~certain ~~expected~~convertible ~~potential~~promissory ~~for~~notes ~~the~~and ~~realization~~determined ofthat ~~deferred~~they ~~tax~~represent ~~assets~~derivative inliabilities ~~determining~~requiring ~~the~~bifurcation ~~amount~~under ofASC ~~the valuation allowance thereto~~815-15.

~~Earnings~~The ~~per~~Company ~~Common~~uses ~~Share~~the binomial model to estimate the fair value of the derivative liabilities associated with its convertible notes. The model incorporates significant unobservable inputs, including:

~~The~~· ~~basic~~Expected ~~loss~~stock ~~per~~price ~~share~~volatility is· ~~calculated~~Risk-free byinterest ~~dividing~~rates ~~the~~· ~~Company’s~~Estimated ~~net~~time ~~loss available~~ to ~~common~~maturity ~~shareholders~~· byProbability ~~the weighted average number~~ of ~~common~~uplisting ~~shares~~· ~~during~~Expected ~~the~~trading year. The diluted loss per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. As of February 28, 2025, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per share.volumes

~~Reclassifications~~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.

~~Certain~~The ~~amounts~~following intable summarizes the ~~comparative~~fair ~~periods~~value ~~presented~~hierarchy ~~have~~of ~~been reclassified to conform to~~ the ~~current period'~~Company’s ~~presentation.~~financial ~~These~~liabilities ~~reclassifications~~measured ~~had~~at nofair ~~effect~~value on ~~the~~a ~~previously~~recurring ~~reported~~basis ~~net~~as ~~income,~~of ~~comprehensive~~August ~~income~~31, ~~total assets, or shareholders' equity.~~2025:

Recently Issued Accounting Standards

	Level 1		Level 2		Level 3		Total
Derivative liabilities – convertible notes		-		-	$	351,630	$	351,630
Other financial instruments		-		-		-		-
Total Embedded Derivatives		-		-	$	351,630	$	351,630

The ~~Financial~~following ~~Accounting~~table ~~Standards~~summarizes ~~Board~~the ~~(FASB)~~changes ~~has~~in ~~issued~~Level ~~several~~3 ~~updates~~derivative ~~relevant~~liabilities tomeasured ~~the~~at ~~Company:~~fair value on a recurring basis.

· Update 2025-01: Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date Effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. · Update 2024-04: Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. Effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted. · Update 2024-03: Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted.

	August 31, 2025
Balance at beginning of period May 31, 2025	$	168,358
Issuances		279,107
Total (gains) losses recognized in earnings		-
Settlements (net)		-
Change in unrealized (gains) losses included in earnings for instruments still held at period end		(95,835	)
Balance at end of period August 31, 2025	$	351,630

10Receivables ~~Table of Contents~~Financing

·The ~~Update~~Company ~~2024-02:~~has ~~Codification~~entered ~~Improvements—Amendments~~into toreceivables ~~Remove~~financing ~~References~~arrangements towhereby ~~the~~it ~~Concepts~~receives ~~Statements.~~cash ~~Effective~~advances ~~for~~in ~~public~~exchange ~~business entities~~ for ~~fiscal~~rights ~~years~~to ~~beginning~~future ~~after~~trade ~~December 15, 2024~~receivables. ~~For~~These ~~all~~transactions ~~other~~do ~~entities,~~not ~~effective~~qualify for ~~fiscal~~sale ~~years~~accounting ~~beginning~~under ~~after~~ASC ~~December~~860 ~~15, 2025. Early application is permitted. · Update 2024-01: Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest~~ and ~~Similar~~are ~~Awards.~~accounted ~~Effective~~ for ~~public~~as ~~business~~secured ~~entities for annual periods beginning after December 15, 2024, and interim periods within those annual periods~~borrowings. ~~For~~As ~~all other entities~~such, ~~effective~~the ~~for~~receivables ~~annual~~remain ~~periods~~on ~~beginning~~the ~~after~~consolidated ~~December~~balance ~~15,~~sheet ~~2025,~~ and ~~interim~~the ~~periods~~related ~~within~~obligations ~~those~~are ~~annual~~recorded ~~periods.~~within ~~Early~~“Receivables ~~adoption~~financing ~~is permitted~~obligation.” ·The ~~Update~~obligations ~~2023-07:Segment~~are ~~Reporting~~repaid ~~(Topic~~as ~~280):~~the ~~Improvements~~receivables toare ~~Reportable Segment Disclosures~~collected. AsRelated ~~public~~fees ~~entity~~are torecorded ~~disclose~~in ~~information~~interest ~~about operating segments, to help our investors and other stakeholders understand the financial performance of different parts of a business~~expense.

~~The~~Revenue ~~Company is currently evaluating the impact of these provisions on its consolidated financial statements~~ Recognition

~~Going~~In ~~Concern~~May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. Since ASU 2014-09 was issued, several additional ASUs have been issued to clarify various elements of the guidance. These standards provide guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Under ASC 606, the Company recognizes revenue from the commercial sales of carbon credits and consulting services by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

To10 ~~date,~~Table ~~the Company has generated minimal revenues from its business operations and has incurred operating losses since inception~~ of $(8,590,179). 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 initial 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. The Company intends to continue to fund its business by way of private placements and advances from related parties as may be required. 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.Contents

~~Fair~~Rates ~~Value~~for ofconsulting ~~Financial~~services ~~Instruments~~are typically per day, per hour, or a similar basis. Consulting revenue is recognized over the period in which the service is provided.

~~The~~Revenue ~~Company~~for ~~uses~~sales aof ~~three-tier~~carbon ~~fair~~credits ~~value~~is ~~hierarchy~~recognized ~~to classify and disclose all assets and liabilities measured~~ at ~~fair value on~~ a ~~recurring~~point ~~basis,~~in astime ~~well~~when ascontrol ~~assets~~of ~~and~~the ~~liabilities~~credit ~~measured~~transfers ~~at fair value on a non-recurring basis, in periods subsequent~~ to ~~their~~the ~~initial measurement~~buyer. The ~~hierarchy requires the~~ Company toacts ~~use~~as ~~observable~~a ~~inputs~~principal ~~when~~in ~~available,~~all ~~and~~revenue ~~to minimize the use of unobservable inputs, when determining fair value~~transactions. ~~The three tiers are defined as follows:~~

·Foreign ~~Level~~Currency 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; · 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 · Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.Translation

The ~~carrying~~functional ~~amount~~currency of the Company’s ~~financial~~is ~~assets~~the ~~and~~Canadian ~~liabilities~~Dollar ~~approximate~~(“CAD”). ~~their~~For ~~fair~~financial ~~values~~statement ~~due~~purposes, tothe ~~their~~reporting ~~short-term~~currency ~~maturities~~is the United States Dollar (“USD”).

11For ~~Table~~financial ofreporting ~~Contents~~purposes, the consolidated financial statements are translated into the Company’s reporting currency, USD. Asset, liability and equity accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using the average exchange rate prevailing during the reporting period.

~~NOTE~~Adjustments 2resulting -from ~~REVENUE~~the ~~RECOGNITION~~translation, if any, are included in accumulated other comprehensive loss in stockholder’s equity (deficit).

~~The~~Significant Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, "Revenue from Contracts with Customers." Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company follows a five-step process to recognize revenue:Estimates

1.Significant ~~Identify~~estimates ~~the~~applied ~~contract~~in ~~with~~the apreparation ~~customer:~~of Athese ~~contract~~financial isstatements ~~defined~~include asthe anestimated ~~agreement~~useful ~~between~~lives ~~two~~of orproperty ~~more parties that creates enforceable rights~~ and ~~obligations.~~equipment, ~~2. Identify~~ the ~~performance~~inputs ~~obligations~~used in the ~~contract:~~valuation ~~Performance~~of ~~obligations~~embedded ~~are~~derivatives ~~promises~~on inconvertible anotes, ~~contract~~share tovolatility ~~transfer~~and ~~distinct~~estimated ~~goods~~life ~~or services to the customer. 3. Determine the transaction price: The transaction price is the amount~~ of ~~consideration~~options ~~the~~and ~~Company~~warrants ~~expects to receive~~ in ~~exchange~~determining ~~for~~their ~~transferring~~fair ~~goods~~value oras ~~services~~well toas the ~~customer.~~expected 4.potential ~~Allocate~~for the ~~transaction~~realization ~~price~~of todeferred ~~the~~tax ~~performance~~assets ~~obligations~~ in ~~the~~determining ~~contract: The transaction price is allocated to each performance obligation based on~~ the ~~relative~~amount ~~standalone selling prices~~ of the ~~goods~~valuation orallowance ~~services being provided~~thereto. 5. Recognize revenue when (or as) the Company satisfies a performance obligation: Revenue is recognized when control of the goods or services is transferred to the customer, which can occur over time or at a point in time.

~~Revenue~~Earnings ~~Streams~~per Common Share

The basic loss per share is calculated by dividing the Company’s ~~generates~~net ~~revenue~~loss ~~from~~available to common stockholders by the ~~following~~weighted ~~sources:~~average number of common shares during the period. The diluted loss per share is calculated by dividing the Company’s net loss available to common stockholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. As of August 31, 2025, potential dilutive securities of approximately 4,425,000 shares had an anti-dilutive effect and were not included in the calculation of diluted net loss per share.

1.Segment Carbon Credit Sales: Revenue from the sale of carbon credits is recognized at a point in time when control of the carbon credits transfers to the customer, which typically occurs upon delivery. 2. Subscription Services: Revenue from subscription services, which provide customers access to the Company's platform and related services, is recognized over time on a straight-line basis over the subscription period. 3. Consulting Services: Revenue from consulting services is recognized over time as the services are performed. The Company measures progress toward completion using an input method based on hours incurred.Reporting

~~Accounts~~ASC ~~Receivable~~Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and ~~Deferred~~assessing ~~Revenue~~performance. Our Chief Operating Decision Maker, Chad Clovis, Chief Executive Officer, President, and Director, reviews financial information and allocates resources on a consolidated basis. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

	·	Accounts Receivable: Accounts receivable represent amounts due from customers for goods or services provided by the Company. Accounts receivable are recorded at the invoiced amount. As of February 28, 2025, accounts receivable were $4,658.
	·	Deferred Revenue: Deferred revenue consists of advance payments received from customers for services to be provided in future periods. As of February 28, 2025, deferred revenue was $3,684,616. The deferred revenue related to the delivery of carbon credits is expected to be recognized in revenue over the contract period as the credits are delivered according to the schedule. Specifically, recognition will occur quarterly from Q2 2025 through Q1 2029, based on the quantities delivered in each period at the rate of $120 per credit.

Table of Contents

~~12 Table of Contents~~Reclassifications

~~NOTE~~Certain 3amounts -in ~~INVENTORIES~~the comparative periods presented have been reclassified to conform to the current period's presentation. These reclassifications had no effect on the previously reported net income, comprehensive income, total assets, or stockholders' equity.

~~Inventories~~Recently ~~are~~Issued ~~stated~~Accounting at the lower of cost or net realizable value. Cost is determined using the weighted average method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are written down or written off.Standards

AsThe ofFinancial ~~February~~Accounting ~~28,~~Standards ~~2025,~~Board ~~inventories~~(FASB) ~~consisted~~has ofissued several updates relevant to the ~~following~~Company:

Description	February 28, 2025		May 31, 2024
Carbon Credit Inventory	USD $	93,960	USD $	316,738
Total	USD $	93,960	USD $	316,738

	·	Update 2025-01: Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date Effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted.

	·	Update 2025-05: Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.Effective for fiscal years beginning after December 15, 2025. Early adoption is permitted.

	·	Update 2024-04: Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. Effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted.

	·	Update 2024-03: Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted.

~~Carbon~~The ~~Credit~~Company ~~Inventory~~is evaluating the impact of the above provisions on its consolidated financial statements

Carbon credit inventory represents carbon credits currently held for sale. The Company engages in the purchase and sale of carbon credits as part of its business operations. These credits are acquired from various projects and are sold to customers seeking to offset their carbon emissions.

	·	Update 2024-02: Codification Improvements—Amendments to Remove References to the Concepts Statements. Effective and adopted for public business entities for fiscal years beginning after December 15, 2024. For all other entities, effective for fiscal years beginning after December 15, 2025. Early application is permitted.

	·	Update 2024-01: Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. Effective and adopted for public business entities for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted.

~~Inventory~~The ~~Valuation~~Company has adopted the above provisions, which had no material impact on its consolidated financial statements

~~The~~Note ~~Company~~2 ~~evaluates~~– ~~its~~Prepaid inventory to ensure it is stated at the lower of cost or net realizable value. This evaluation includes an analysis of the current market conditions, the estimated selling prices of the carbon credits, and any potential obsolescence. Adjustments to the carrying value of inventory are made as necessary to reflect any declines in net realizable value below cost.Expenses

13As ~~Table~~of August 31, 2025 and May 31, 2025, prepaid expenses consisted of ~~Contents~~the following:

NOTE 4 - PREPAID EXPENSES

Description	August 31, 2025		May 31, 2025
Advertising & Promotional Agreement	$	83,673	$	179,532
Prepaid inventory		-		636,562
Other Prepaids		110,740		49,580
Total	$	194,413	$	865,674

~~Prepaid~~12 ~~expenses~~Table ~~consist~~ of payments made in advance for goods or services to be received in future periods. These expenses are recognized as assets until the related goods or services are consumed or the benefits are realized. As of February 28, 2025, the majority of the Company's prepaid expenses are related to the advertising and promotional agreement with Oilers Entertainment Group Canada Corp. ("OEG").Contents

OnNote ~~December~~3 1,– 2024, the Company received invoices from OEG for the advertising and promotional agreement signed on July 1, 2024. The agreement includes various promotional rights and advertising services to be provided over the term of the contract, which ends on June 30, 2027. The total amount invoiced for the period ending February 28, 2025, has been recorded as a prepaid expense.Inventory

~~The~~Inventory ~~table~~as ~~below~~of ~~summarizes~~August ~~the~~31, ~~prepaid~~2025 ~~expenses~~and ~~related~~May to31, ~~the~~2025, ~~OEG~~consisted ~~agreement as~~ of ~~February~~the ~~28, 2025~~following:

Description	~~Amount~~August ~~(USD $)~~31,2025		May 31,2025
Advertising & Promotional Agreement	$	697,544
Carbon Credit Inventory	$	105,612	$	99,644
Other Prepayments	$	16,020
Project - Work in progress		741,404		-
Total Prepaid Expenses	$	713,564
Total	$	847,017	$	99,644

~~Advertising~~Carbon &credit ~~Promotional~~inventory ~~Agreement~~represents carbon credits currently held for sale and are stated at the lower of cost or market.

~~The~~Work-in-progress ~~advertising~~represents the costs incurred on projects that are in the process of development and ~~promotional~~are ~~agreement~~expected ~~with~~to ~~OEG~~generate ~~includes~~carbon ~~various~~credits ~~marketing~~in ~~rights,~~the ~~logo~~future. ~~usage~~Such ~~rights~~costs may include project design, ~~digital~~permitting, ~~signage~~verification, and other directly attributable expenditures necessary to bring the projects to a stage where credits can be issued. Work-in-~~bowl~~progress ~~signage,~~is ~~digital~~carried ~~broadcast~~at ~~signage~~cost, and ~~other~~upon ~~promotional~~certification ~~activities.~~and ~~The~~issuance ~~agreement~~of ~~specifies~~the ~~that~~underlying ~~the~~carbon ~~Company~~credits, ~~will~~the ~~receive~~related ~~these~~costs ~~promotional~~are ~~rights~~reclassified from work-in-progress ~~exchange~~to ~~for~~carbon acredit ~~fee~~inventory.

~~The~~Note ~~second~~4 ~~installment~~- ofProperty ~~CAD 750,000 was invoiced on December 1, 2024,~~ and ~~has been recorded as a prepaid expense. This amount will be amortized over the period in which the related promotional rights and advertising services are received.~~Equipment

~~Amortization~~The amount of ~~Prepaid~~property ~~Expenses~~and equipment as of August 31, 2025 and May 31, 2025, consisted of the following:

The prepaid expenses related to the OEG agreement will be amortized on a straight-line basis over the term of the contract. The amortization expense for the period ending February 28, 2025, will be recognized in the Company's statement of operations.

Description	August 31, 2025			May 31, 2025
Furniture and fixtures	$	9,087		$	9,076
Computer and equipment		3,668			3,664
Total property cost	$	12,755		$	12,741
Accumulated depreciation		(7,382	)		(6,608	)
Property and equipment, net	$	5,373		$	6,132

14The ~~Table~~Company ofdid ~~Contents~~not purchase significant property, plant and equipment for the three months ended August 31, 2025 and 2024. Depreciation expense for the three months ended August 31, 2025 was $768.

~~NOTE~~Note 5 – ~~CONVERTIBLE~~Convertible ~~PROMISSORY NOTES~~Notes

As of ~~February~~August 2831, 2025, Karbon-X Corp. issued convertible promissory notes totaling USD $13,~~207~~750,~~635~~ 000 to ~~four~~multiple investors as part of its capital-raising efforts. The notes bear simple interest at a rate of 10% per ~~annum~~quarter, and ~~mature~~have onmaturity ~~October~~terms ~~15, 2026, for two investors, October 16, 2026, for one investor and January 31, 2027 for one investor. One investors note was issued for CAD $500,000, which was equivalent to USD $359,803 on the date~~ of ~~issuance.~~1 ~~The~~year ~~principal~~or ~~amount of the investor’s note is fixed in Canadian dollars and requires repayment in U~~less.~~S. dollars, exposing the Company to foreign currency risk.~~

~~The~~During ~~notes~~the ~~include~~three amonths ~~conversion feature~~ended, ~~allowing~~August ~~the~~31, ~~holders~~2025, tofive ~~convert~~notes ~~the~~of principal $2,193,195 and ~~accrued~~ interest ~~into~~of ~~the~~$90,954 ~~Company's~~were ~~common~~converted ~~stock.~~into ~~Conversion~~4,870,291 isshares ~~permitted~~ at ~~the~~$0.90 ~~option~~- of$0.45/share. ~~the lender at any time after the earlier of:~~

	1.	Twenty-four months from the date of issuance, or
	2.	The Company’s listing on OTCQX, Nasdaq, or NYSE.

The Company recorded discounts of $318,455, interest expense and discount amortization related to convertible notes of $264,416 and gain on change in fair value of derivatives of $95,835 for the three months ended August 31, 2025.

The notes include a conversion ~~price~~feature, allowing the holders to convert the principal and accrued interest into the Company's common stock. Conversion is permitted at the ~~lesser~~option of the lender at any time after the earlier of:

	1.	~~80% of the twenty~~Twenty-~~day~~four ~~weighted~~months ~~average~~from ~~closing price of~~ the ~~Company’s~~date ~~common stock preceding the conversion (but not less than the average~~ of ~~the four notes $0.56 per share)~~issuance, ~~and of the trading day immediately preceding such conversion (but not less than $0.75 per share)~~ or ~~(ii) $0.90 per share.~~
	2.	~~Average of the four notes $0.78 per share.~~	The Company’s listing on OTCQX, Nasdaq, or NYSE.

~~Conversion~~The isconversion ~~further~~price ~~restricted~~is ~~to ensure that no lender converts an amount of~~ the ~~note~~lesser ~~that would result in owning more than 9.9%~~ of ~~the outstanding common stock at any time.~~:

The Borrower may prepay the principal amount and any unpaid interest or any portion thereof at any time without notice, further interest, bonus, or penalty, provided that a minimum of six months’ interest shall be payable regardless of the prepayment date.

	1.	80% of the twenty-day weighted average closing price of the Company’s common stock preceding the conversion (but not less than the average of the two notes $0.56 per share), and of the trading day immediately preceding such conversion (but not less than $0.75 per share) or (ii) $0.90 per share.

	2.	The notes range from $0.75 - $0.90 per share.

~~The~~13 ~~issuance~~Table of these convertible promissory notes provided the Company with necessary capital to support its operations and strategic initiatives while offering investors the potential for equity participation in the Company's future growth.Contents

AsConversion ofis ~~February~~further ~~28,~~restricted ~~2025,~~to ~~the~~ensure ~~principal~~that ~~amount~~no oflender ~~the~~converts ~~convertible~~an ~~promissory~~amount ~~notes~~of ~~totaled USD $1,207,635, For~~ the ~~quarter~~note ~~ended~~that ~~February~~would ~~28,~~result ~~2025,~~in ~~the~~owning ~~Company~~more ~~recognized~~than ~~interest~~4.9% ~~expense~~ of ~~USD $46,315, calculated based on~~ the ~~stated~~outstanding ~~10%~~common ~~simple~~stock ~~interest~~at ~~rate~~any time.

~~Prepayment~~The ~~Option~~Borrower may prepay the principal amount and any unpaid interest or any portion thereof at any time without notice, further interest, bonus, or penalty, provided that a minimum of six months’ interest shall be payable regardless of the prepayment date.

The ~~Company~~issuance ~~may~~of ~~prepay~~these ~~the~~convertible promissory notes atprovided ~~any~~the ~~time~~Company ~~without~~with ~~penalty,~~necessary ~~provided~~capital ~~that~~to asupport ~~minimum~~its ofoperations ~~six~~and ~~months’~~strategic ~~interest~~initiatives iswhile ~~payable.~~offering ~~This~~investors ~~provision~~the ~~ensures~~potential ~~lenders~~for ~~are~~equity ~~compensated~~participation ~~regardless~~in of the ~~prepayment~~Company's ~~date~~future growth.

15Prepayment ~~Table of Contents~~Option

~~NOTE~~The 6Company -may ~~INVESTMENTS~~prepay INthe ~~EQUITY~~notes ~~SECURITIES~~at ~~AND~~any ~~CARBON~~time ~~CREDIT~~without ~~FORWARD~~penalty, ~~PURCHASE~~provided ~~AGREEMENT~~that a minimum of six months’ interest is payable. This provision ensures lenders are compensated regardless of the prepayment date.

OnAs ~~October~~of 24August 31, ~~2024~~2025, ~~Karbon-X~~the ~~Corp.~~Company ~~entered~~owed ~~into~~principal ~~a Carbon Credit Purchase Agreement with DevvStream Holdings Inc. As part~~ of ~~this agreement~~$3, ~~Karbon-X Corp. received 174~~431,~~953~~545, ~~common~~net ~~shares~~ of ~~New~~discounts ~~Pubco, a company formed from the merger~~ of ~~DevvStream Holdings Inc. and Focus Impact Acquisition Corp.~~$318,455, aaccrued ~~special~~interest ~~purpose acquisition company (SPAC) listed on the Nasdaq Stock Exchange. The shares were issued at a deemed price~~ of $~~6.50 per share~~241,668, ~~resulting~~and incarried anembedded ~~initial~~liabilities ~~valuation~~ of ~~USD~~ $1351,~~137,197~~630.

OnNote October 28, 2024, Karbon-X Corp. entered into a Carbon Credit Forward Purchase Agreement with DevvStream Holdings Inc., under which Karbon-X Corp. will sell verified greenhouse gas offset or carbon credits, specifically C-Sink Credits, to DevvStream Holdings Inc. The purchase price for these credits is USD $2,892,000, payable in 444,923 common shares of New Pubco at a deemed price of $6~~.50~~ ~~per~~– ~~share. This agreement is classified as a futures contract under relevant U.S. GAAP guidance.~~Investments

~~Initial~~On ~~Recognition~~October 24, 2024, Karbon-X Corp. entered into a Carbon Credit Purchase Agreement with DevvStream Holdings Inc. As part of this agreement, Karbon-X Corp. received 174,953 common shares of New Pubco, a company formed from the merger of DevvStream Holdings Inc. and ~~Measurement~~Focus Impact Acquisition Corp., a special purpose acquisition company (SPAC) listed on the Nasdaq Stock Exchange. The shares were issued at a deemed price of $6.50 per share, resulting in an initial valuation of USD $1,137,197.

AtOn ~~initial~~October ~~recognition~~28, ~~the~~2024, ~~common~~Karbon-X ~~shares~~Corp. ofentered ~~New~~into ~~Pubco~~a ~~received~~Carbon ~~under~~Credit ~~the~~Forward ~~agreements~~Purchase ~~are~~Agreement ~~classified~~with asDevvStream ~~equity~~Holdings ~~securities~~Inc., ~~and~~under ~~measured~~which atKarbon-X ~~fair~~Corp. ~~value~~will ~~upon~~sell ~~initial~~verified ~~recognition~~greenhouse ingas ~~accordance~~offset ~~with~~or ~~ASC~~carbon ~~321~~credits, ~~"Investments—Equity~~specifically ~~Securities".~~C-Sink ~~The~~Credits, ~~Company~~to ~~recorded~~DevvStream anHoldings ~~initial~~Inc. ~~fair~~The ~~value~~purchase ofprice ~~the~~for ~~securities~~these ~~based~~credits onis ~~observable~~USD ~~market~~$2,892,000, ~~prices~~payable atin 444,923 common ~~the~~shares ~~time~~ of ~~execution,~~New ~~consistent~~Pubco ~~with~~at a ~~Level~~deemed 1price ~~fair~~of ~~value~~$6.50 per ~~measurement,~~share. asThis ~~the~~agreement ~~shares~~is ~~were~~classified ~~actively~~as ~~traded~~a onfutures ~~the~~contract ~~Nasdaq~~under ~~Stock~~relevant ~~Exchange~~U.S. GAAP guidance.

	·	For the Carbon Credit Purchase Agreement, the fair value of the 174,953 shares was recognized as $68,232.
	·	For the Carbon Credit Forward Purchase Agreement, the 444,923 shares were valued at $173,520, representing the purchase price of the C-Sink Credits to be delivered in the future.

Initial Recognition and Measurement

~~Upon~~At ~~entering~~initial ~~into~~recognition, the ~~forward~~common ~~purchase~~shares ~~agreement,~~of ~~Karbon-X~~New ~~Corp.~~Pubco ~~also~~received ~~recognized~~under athe ~~deferred~~agreements ~~revenue~~are ~~liability~~classified ofas ~~$2,892,000,~~equity assecurities ~~the~~and ~~performance~~measured ~~obligation~~at tofair ~~deliver~~value ~~the~~upon ~~carbon~~initial ~~credits~~recognition ~~had~~in ~~not~~accordance ~~yet~~with ~~been~~ASC ~~satisfied~~321, "Investments—Equity Securities". ~~This~~The ~~deferred~~Company ~~revenue~~recorded ~~will~~an beinitial ~~recognized~~fair asvalue ~~income~~of ~~upon~~the ~~delivery~~securities ofbased on observable market prices at the ~~carbon~~time ~~credits.~~of ~~Refer~~execution, toconsistent ~~Note~~with 7a ~~for~~Level ~~further~~1 ~~details~~fair value measurement, as the shares were actively traded on ~~deferred~~the ~~revenue~~Nasdaq Stock Exchange.

Subsequent Measurement and True-Up Provision

	·	For the Carbon Credit Purchase Agreement, the fair value of the 17,495 shares was recognized as $68,232.

	·	For the Carbon Credit Forward Purchase Agreement, the 44,492 shares were valued at $173,520, representing the purchase price of the C-Sink Credits to be delivered in the future.

~~Subsequent~~Upon toentering ~~initial~~into ~~recognition,~~ the ~~equity~~forward ~~securities~~purchase ~~are~~agreement, ~~measured~~Karbon-X atCorp. ~~fair~~also ~~value~~recognized ina ~~accordance~~deferred ~~with~~revenue ~~ASC~~liability ~~321,~~of ~~"Investments—Equity Securities". Additionally~~$2,892,000, as the ~~securities~~performance ~~are~~obligation ~~denominated in a foreign currency, a currency translation adjustment (CTA) is recorded~~ to ~~reflect~~deliver the ~~impact~~carbon ofcredits ~~exchange~~had ~~rate~~not ~~fluctuations~~yet been satisfied. ~~The~~This ~~CTA~~deferred isrevenue ~~included~~will inbe ~~other~~recognized ~~comprehensive~~as income ~~(OCI)~~upon indelivery ~~accordance~~of ~~with~~the ~~ASC~~carbon ~~830, "Foreign Currency Matters"~~credits.

As14 ofTable ~~February 28, 2025, the fair market value (FMV)~~ of ~~New Pubco shares was USD $0.39 per share. In compliance with ASC 321, the Company marked the investment to fair value, resulting in the following adjustments:~~Contents

	·	The fair value of investments was at the current market price of $0.39 per share.
	·	To address the difference between the contractual price and the current market price, Karbon-X recorded a securities receivable for the true-up portion guaranteed under the agreements. The true-up provision ensures that the Company will be made whole if the market value of the shares remains below the contracted value during the adjustment period. As of February 28, 2025, no additional shares have been issued under these provisions.

Subsequent Measurement and True-Up Provision

AsSubsequent ofto ~~February~~initial 28recognition, ~~2025~~the equity securities are measured at fair value in accordance with ASC 321, ~~the~~"Investments—Equity ~~balances~~Securities". ~~were~~Additionally, as ~~follows:~~the securities are denominated in a foreign currency, a currency translation adjustment (CTA) is recorded to reflect the impact of exchange rate fluctuations. The CTA is included in other comprehensive income (OCI) in accordance with ASC 830, "Foreign Currency Matters".

Description	Balance (USD)
Investments in Equity Securities	$	211,446
Securities Receivable	$	3,689,467
Total Value	$	3,900,913

As of August 31, 2025, the fair market value (FMV) of New Pubco shares was USD $2.30 per share. In compliance with ASC 321, the Company marked the investment to fair value, resulting in the following adjustments:

Fair Value Hierarchy

	·	The fair value of investments was at the current market price of $2.30 per share.

	·	To address the difference between the contractual price and the current market price, Karbon-X recorded a securities receivable for the true-up portion guaranteed under the agreements. The true-up provision ensures that the Company will be made whole if the market value of the shares remains below the contracted value during the adjustment period. As of August 31, 2025, no additional shares have been issued under these provisions.

~~The~~As ~~equity securities~~ of ~~New~~August ~~Pubco~~31, ~~are measured using Level 1 inputs~~2025, as the ~~shares~~balances ~~are~~were ~~actively~~as ~~traded on the Nasdaq Stock Exchange.~~follows:

The Company's exposure to impairment is mitigated by the true-up provision, which ensures no loss is ultimately recognized. While the securities are remeasured to fair market value quarterly, the receivable reflects the guaranteed recovery under the agreement.

Description	Balance (USD)
Investments in Equity Securities	$	142,922
Securities Receivable	$	3,952,752
Total Value	$	4,095,674

16Fair ~~Table~~Value ~~of Contents~~Hierarchy

~~NOTE~~The 7equity -securities ~~DEFERRED~~of ~~REVENUE~~New Pubco are measured using Level 1 inputs, as the shares are actively traded on the Nasdaq Stock Exchange.

~~Initial~~The ~~Recognition~~Company's ~~and~~exposure ~~Deferred~~to ~~Revenue~~impairment is mitigated by the true-up provision, which ensures no loss is ultimately recognized. While the securities are remeasured to fair market value quarterly, the receivable reflects the guaranteed recovery under the agreement.

OnNote ~~October~~7 ~~28,~~– ~~2024,~~Internally ~~Karbon-X~~Developed Corp. entered into a Carbon Credit Forward Purchase Agreement with DevvStream Holdings Inc. Under this agreement, Karbon-X Corp. will sell verified greenhouse gas offset or carbon credits, specifically C-Sink Credits, to DevvStream Holdings Inc. The purchase price for these credits is USD $2,892,000, payable in 444,923 common shares of New Pubco at a deemed price of $6.50 per share. This transaction is classified as a futures contract, and the accounting treatment follows the relevant FASB Codification and Accounting Standards Updates (ASUs).Software

~~Upon~~In ~~entering~~accordance ~~into~~with ASC 350-40, the ~~futures~~Company ~~contract,~~has ~~Karbon-X~~capitalized ~~Corp.~~internally ~~recognized~~developed software for its development of a ~~deferred~~mobile ~~revenue~~application. ~~liability~~The software completed its application development stage and all related costs as of ~~USD~~March $21,~~892,000,~~ as2025 ~~the~~and ~~performance~~any ~~obligation~~additional ~~(delivery~~costs ofsince ~~carbon~~then ~~credits)~~are ~~had~~being ~~not~~expensed ~~yet~~as incurred. The software has been ~~satisfied.~~completed ~~This~~and ~~deferred~~placed ~~revenue~~into ~~represents~~service; the ~~obligation~~Company tobegan ~~deliver~~amortizing the ~~carbon~~software ~~credits~~over inits ~~the~~estimated ~~future~~useful life of three years on March 1, 2025.

~~Additionally~~As of August 31, as2025 ofand ~~February~~May 2831, 2025, the Company has ~~recorded~~capitalized ~~deferred~~internally ~~revenue~~developed software of $~~884~~460,~~940~~070 ~~related~~and to$473,895, arespectively. The ~~sales~~Company ~~contract~~recorded ~~with~~amortization ~~Heidelberg~~expense of $43,200 and $0 for the ~~sale~~three ofmonths ~~carbon~~ended ~~credits~~August 31, 2025 and 2024, respectively. The ~~Under~~decrease ~~the~~in ~~terms~~value ofis ~~the~~primarily ~~agreement,~~attributed to amortization over the ~~Company~~asset’s ~~received~~useful ~~cash~~life, other changes in ~~advance~~value ofare the ~~sale,~~result ~~with~~of ~~delivery~~the impact of cumulative translation adjustments (CTA) resulting from the ~~carbon~~remeasurement ~~credits~~of ~~scheduled~~foreign ~~for~~currency ~~July~~values ~~2025~~to USD.

~~Recognition~~15 Table of ~~Marketable Securities~~Contents

~~Upon~~Note ~~the~~8 ~~execution~~— ofAsset ~~the~~Acquisition ~~agreement~~ and ~~the~~Project ~~issuance~~Work of the common shares of New Pubco, Karbon-X Corp. recognized the marketable securities at their fair value of USD $2,892,000. These securities are classified as equity securities with readily determinable fair values and are measured at fair value, with changes in ~~fair value recognized in net income.~~Progress

~~Revenue~~On ~~Recognition~~June 27, 2025, the Company completed an asset acquisition consisting of a portfolio of carbon-offset projects (the “Projects”). The transaction did not meet the definition of a business combination under ASC 805-10 because the acquired group of assets did not include an integrated set of activities capable of producing outputs. Accordingly, the acquisition has been accounted for as an asset acquisition in accordance with ASC 805-50.

AsTotal ~~Karbon-X~~Cost ~~Corp. delivers the carbon credits according to the schedule specified in the agreement, it recognizes revenue and reduces the deferred revenue liability. Revenue is recognized when control~~ of ~~the promised goods or services is transferred to the customer, in accordance with ASC 606.~~Acquisition

~~Purchase~~The ~~Price~~Company ~~Adjustment~~paid ~~for~~cash ~~Devvstream~~consideration ~~Holdings~~of ~~Inc~~$314,441 to the sellers and incurred $180,819 of direct legal expenses and $109,833 of due-diligence fees directly attributable to the acquisition. In accordance with ASC 805-50, these transaction costs were capitalized as part of the acquisition cost. The total capitalized cost of the Projects was $605,093.

~~The~~Nature ~~agreement includes a provision for a purchase price adjustment 18 months after the closing date. If the gross proceeds from the sale~~ of ~~the~~Assets initial shares are less than USD $2,882,096, additional shares will be issued to Karbon-X Corp. to cover the shortfall. As of February 28, 2025, no additional shares have been issued under this provision.Acquired

17Management ~~Table~~evaluated the nature of ~~Contents~~the assets acquired and determined that no separately identifiable intangible rights, contractual concessions, or tangible property were transferred other than the underlying in-process project activities. Substantially all economic value acquired relates to carbon-credit production already in progress at the acquisition date, which is expected to result in verified credits upon completion of the remaining verification and issuance procedures. Because the acquired value represents in-process production intended for sale, the total purchase price and capitalized transaction costs have been allocated entirely to Inventory – Project Work in Progress.

~~NOTE~~Measurement ~~8 - CAPITAL WORK IN PROGRESS (INTERNALLY DEVELOPED SOFTWARE)~~Basis

InThe ~~accordance~~Projects ~~with~~are ~~ASC~~recorded ~~350-40~~at cost, representing the ~~Company~~total ~~has~~consideration ~~capitalized~~transferred ~~internally~~and ~~developed~~directly ~~software~~attributable ~~for~~acquisition ~~its~~expenditures, ~~development~~consistent ofwith aASC ~~mobile application~~805-50-30-3. ~~The~~Work-in-progress ~~software~~inventory is ~~currently~~subsequently measured at the lower of cost or net realizable value in ~~its~~accordance ~~application~~with ~~development~~ASC ~~stage,~~330. ~~and~~No ~~all~~goodwill ~~related~~or ~~costs~~other ~~are~~identifiable ~~being~~intangible ~~capitalized~~assets aswere ~~incurred~~recognized. ~~Once~~Costs incurred after the ~~software~~acquisition isthat ~~ready~~relate ~~for~~directly ~~implementation~~to continued project development are capitalized as additions to WIP until verified carbon credits are issued, ~~the~~at ~~Company~~which ~~will~~time ~~begin~~such ~~amortizing~~balances ~~the~~will ~~software~~be ~~over~~reclassified ~~its~~to ~~estimated~~Inventory ~~useful~~– ~~life~~Carbon Credits.

AsFair-Value of February 28, 2025, and May 31, 2024, the Company has capitalized internally developed software with a value of USD $492,966 and USD $521,372, respectively. The decrease in value is primarily attributed to the impact of cumulative translation adjustments (CTA) resulting from the remeasurement of foreign currency values to USD.Considerations

18Although ~~Table~~recorded at cost, management believes the estimated fair value of ~~Contents~~the acquired Projects exceeds $22 million, based on market-based indications of expected credit issuance volumes and prevailing carbon-credit pricing. The difference between the purchase price and management’s view of fair value primarily reflects the project-specific risks and uncertainties evaluated by market participants at the time of negotiation, including verification timelines, regulatory changes, and potential variability in issuance volumes. In accordance with U.S. GAAP, such fair-value differences are not recognized in the financial statements, and the Projects continue to be carried at their historical cost basis.

~~NOTE~~Subsequent 9Developments -and ~~STOCK~~Valuation ~~OPTION PLAN~~Sensitivity

~~Description~~Management continually monitors market conditions, verification milestones, and registry guidance that could affect the estimated realizable value of the ~~Plan~~Projects. As each Project progresses toward independent verification and credit issuance, management intends to reassess key assumptions including verified-credit volumes, expected market prices, and discount factors to evaluate whether any indicators of impairment or changes in net realizable value exist. Should verification proceed as anticipated and market pricing remain consistent with current levels, the Company expects the aggregate realizable value of the Projects to approximate or exceed management’s current fair-value estimate. However, adverse developments in regulatory frameworks, verification timing, or market demand for voluntary carbon credits could materially reduce future realized values.

~~The~~Note ~~Company~~9 ~~has~~– ~~adopted~~Stockholders’ the 2024 Employees', Directors', Officers', and Consultants' Stock Option Plan (the "Plan") on May 16, 2024, which authorizes the issuance of options to purchase up to 5,000,000 shares of common stock. The Plan is designed to attract, retain, and motivate employees, directors, officers, and consultants by providing them with an opportunity to acquire a proprietary interest in the Company.Equity

~~Types~~During the three months ended August 31, 2025, the Company converted loans of ~~Options~~$2,193,195 and interest of $90,954 into 4,870,291 shares at a price of $0.90 - $0.45/share.

~~The~~During ~~Plan~~the ~~provides~~three ~~for~~months ~~the~~ended ~~issuance~~August of31, ~~both~~2025, ~~Incentive~~the ~~Stock~~Company ~~Options~~issued ~~(ISOs)~~110,000 ~~and~~shares ~~Nonstatutory~~at ~~Stock~~$0.90 ~~Options~~- ~~(NSOs)~~$0.50/share ~~ISOs~~for ~~are~~compensation ~~intended to qualify under Section 422~~ of ~~the Internal Revenue Code~~$95, ~~while NSOs do not qualify under Section 422~~000.

~~Eligibility~~16 Table of Contents

~~Options~~Note ~~may be granted to employees, directors, officers, and consultants of the Company. Special provisions apply to individuals owning more than~~ 10% of- ~~the~~Stock ~~Company's~~Option ~~stock.~~Plan

~~Administration~~Description of the Plan

The Company has adopted the 2024 Employees', Directors', Officers', and Consultants' Stock Option Plan is(the ~~administered~~"Plan") byon May 16, 2024, which authorizes the ~~Compensation~~issuance ~~Committee~~of options to purchase up to 5,000,000 shares of common stock. The Plan was amended to authorize the ~~Board~~issuance of ~~Directors~~options to purchase up to 15,000,000 ~~which~~shares ~~has~~of ~~the~~common ~~authority~~stock. The Plan is designed to ~~determine~~attract, ~~the~~retain, ~~terms~~and motivate employees, directors, officers, and ~~conditions~~consultants by ofproviding ~~each~~them ~~option~~with ~~grant~~an opportunity to acquire a proprietary interest in the Company.

~~Shares~~Types ~~Available~~of Options

The ~~maximum~~Plan ~~number~~provides for the issuance of ~~shares~~both ~~that~~Incentive ~~may~~Stock beOptions ~~issued~~(ISOs) and Nonstatutory Stock Options (NSOs). ISOs are intended to qualify under Section 422 of the ~~Plan~~Internal isRevenue 5Code,~~000,000~~ ~~shares~~while ofNSOs ~~common~~do ~~stock~~not qualify under Section 422.

~~Option Terms:~~Eligibility

·Options ~~Exercise~~may ~~Price:~~be ~~The exercise price of options~~ granted ~~under~~to ~~the~~employees, ~~Plan~~directors, ~~must~~officers, beand atconsultants ~~least 100%~~ of the ~~fair market value of the stock on the date of grant~~Company. ·Special ~~Term:~~provisions ~~Options~~apply ~~granted~~to ~~under~~individuals ~~the~~owning ~~Plan~~more ~~have~~than 10% ~~a maximum term~~ of ~~ten years from~~ the ~~date~~Company's ~~of grant~~stock. ~~· Vesting: The vesting schedule for options is determined by the Compensation Committee at the time of grant.~~

~~Payment for Shares~~Administration

~~Upon~~The ~~exercise~~Plan ofis anadministered ~~option,~~by the ~~optionee~~Compensation ~~may~~Committee ~~pay~~of the ~~exercise~~Board ~~price~~of ~~in cash or cashless exercise~~Directors, ~~with~~which has the ~~consent~~authority ofto determine the ~~Compensation~~terms ~~Committee,~~and byconditions ~~tendering shares~~ of ~~common~~each ~~stock~~option grant.

~~Adjustments~~Shares Available

InThe ~~the~~maximum ~~event of a stock split, merger, or other corporate event, the~~ number of shares ~~subject~~that tomay ~~the~~be ~~Plan~~issued ~~and~~under the ~~exercise~~Plan ~~price~~is 5,000,000 shares of ~~outstanding~~common ~~options will be adjusted as determined by the Compensation Committee~~stock.

~~Transferability~~Option Terms:

~~Options~~· Exercise Price: The exercise price of options granted under the Plan ~~are~~must ~~generally~~be ~~non-transferable,~~at ~~except~~least ~~under~~100% ~~specific~~of ~~conditions~~the asfair ~~outlined~~market invalue of the stock on the date of grant. · Term: Options granted under the Plan have a maximum term of ten years from the date of grant. · Vesting: The vesting schedule for options is determined by the Compensation Committee at the time of grant.

19Payment ~~Table~~for ~~of Contents~~Shares

~~Termination~~Upon exercise of ~~Employment~~an option, the optionee may pay the exercise price in cash or cashless exercise, with the consent of the Compensation Committee, by tendering shares of common stock.

~~The Plan provides specific rules for the exercise of options upon termination of employment, including termination for cause, disability, or death.~~Adjustments

~~Legal~~In ~~Compliance~~the event of a stock split, merger, or other corporate event, the number of shares subject to the Plan and the exercise price of outstanding options will be adjusted as determined by the Compensation Committee.

~~The issuance of shares under the Plan is subject to compliance with federal and state securities laws.~~Transferability

Options granted under the Plan ~~Duration~~are generally non-transferable, except under specific conditions as outlined in the Plan.

~~The~~17 ~~Plan~~Table ~~became effective upon adoption by the Board~~ of ~~Directors and options may not be granted after December 31, 2026.~~Contents

~~Activity~~Termination ~~Under~~of ~~the Plan~~Employment

AsThe ofPlan ~~February~~provides ~~28,~~specific ~~2025,~~rules for the ~~following~~exercise ~~activity~~of ~~has~~options ~~occurred~~upon ~~under~~termination ~~the~~of ~~Plan~~employment, ~~started~~including intermination ~~second~~for ~~quarter~~cause, ofdisability, ~~this~~or ~~fiscal year :~~death.

Description	Number of Shares			Weighted Average Exercise Price		Weighted average remaining life (in years)
Options Authorized		5,000,000
Options Granted		4,185,000		$	0.79		3.80
Options Exercised		0		$	0.79		3.80
Options Forfeited		(25,125	)	$	0.75		3.80
Options Outstanding		4,159,875		$	0.79		3.80
Options Vested		1,289,200		$	0.79		3.80
Options Unvested		2,870,675		$	0.79		3.80

Legal Compliance

AsThe issuance of ~~February~~shares ~~28,~~under ~~2028,~~ the ~~intrinsic~~Plan ~~value~~is ofsubject ~~the~~to ~~4,159,875 outstanding~~compliance ~~options~~with ~~was~~federal $0and state securities laws.

~~Fair~~Plan ~~Value of Options~~Duration

The ~~fair~~Plan ~~value~~became ofeffective ~~each~~upon ~~option~~adoption ~~grant~~by ~~is estimated on~~ the ~~date~~Board of ~~grant~~Directors ~~using~~and ~~the~~options ~~Black-Scholes~~may ~~option~~not ~~pricing~~be ~~model~~granted ~~with~~after ~~the~~December ~~following~~31, ~~weighted-average assumptions:~~2026.

·Activity ~~Expected~~Under ~~Volatility:~~the ~~35%~~Plan

○As ~~The Company determined expected volatility based on an analysis~~ of ~~comparable~~August ~~publicly~~31, ~~traded~~2025, ~~companies in~~ the ~~same~~following oractivity ~~similar~~has ~~industry.~~occurred Asunder ~~a startup in a new industry, Karbon-X lacks sufficient historical trading data. The analysis considered market trends and~~ the ~~high-growth~~Plan, ~~high-risk~~which ~~nature~~started ofin the second ~~carbon~~quarter ~~management and sustainability sector. The selected volatility reflects industry patterns~~ of 2024 ~~startups in comparable markets, ensuring reasonability and alignment with peer data.~~:

· Expected Life: 5 Years

Description	Number of Shares			Weighted Average Exercise Price		Weighted average remaining life (in years)
Options Authorized		15,000,000
Options Granted		4,612,000		$	0.79		5.00
Options Exercised		360,000		$	0.79
Options Forfeited		(371,625	)	$	0.75
Options Outstanding		3,880,375		$	0.79		4.00
Options Vested		1,543,000		$	0.79		3.75
Options Unvested		2,337,375		$	0.79		4.05

○As ~~Based~~of onAugust ~~the~~31, ~~vesting~~2025, ~~schedule~~the ~~and~~intrinsic ~~anticipated~~value ~~exercise~~of ~~behavior~~the 4,226,875 outstanding ofoptions ~~option~~was ~~holders~~$-.

·Fair ~~Risk-Free~~Value ~~Interest~~of ~~Rate: 5%~~Options

○ The ~~rate~~fair ~~reflects~~value ~~the~~of ~~yield~~each onoption ~~U.S.~~grant ~~Treasury~~is ~~securities~~estimated ~~with~~on ~~a term consistent with~~ the ~~expected~~date ~~life~~ of ~~the~~grant ~~options.~~using ~~Given~~ the ~~current~~Black-Scholes ~~interest~~option ~~rate~~pricing ~~environment,~~model ~~a 5% rate is appropriate for options granted during Q3 FY2025. This aligns~~ with the ~~Federal~~following ~~Reserve’s~~weighted-average ~~policy rates and prevailing market conditions.~~assumptions:

· Expected ~~Dividends~~Volatility: 035%

○ The Company ~~does~~determined ~~not~~expected ~~currently~~volatility ~~pay~~based ~~dividends~~on an analysis of comparable publicly traded companies in the same or similar industry. As a startup in a new industry, ~~consistent~~Karbon-X ~~with~~lacks ~~its~~sufficient historical trading data. The analysis considered market trends and the high-growth, high-~~oriented~~risk ~~business~~nature ~~strategy~~of the carbon management and sustainability sector. The selected volatility reflects industry patterns of startups in comparable markets, ensuring reasonability and alignment with peer data.

~~Stock-Based~~· ~~Compensation~~Expected ~~Expense~~Life: 5 Years

~~For~~○ ~~the~~Based ~~nine~~on ~~months ended February 28, 2025,~~ the ~~Company~~vesting ~~recognized~~schedule ~~stock-based~~and ~~compensation~~anticipated ~~expense~~exercise behavior of ~~USD~~option ~~$381,241~~holders.

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~~NOTE~~· 10Risk-Free –Interest ~~WARRANTS~~Rate: 5%

A○ ~~detail~~The ofrate ~~warrant~~reflects ~~activity~~the ~~for~~yield on U.S. Treasury securities with a term consistent with the ~~nine~~expected ~~months~~life ~~ended~~of ~~February~~the 28options. Given the current interest rate environment, ~~2025~~a 5% rate is asappropriate ~~follows:~~for options granted during Q3 FY2025. This aligns with the Federal Reserve’s policy rates and prevailing market conditions.

Description	Number			Weighted average exercise price		Weighted average remaining contractual life (in years)
Outstanding May 31, 2024		330,400		$	0.63		0.63
Exercised		-			-		-
Granted		-			-		-
Expired		(320,000	)		0.75		-
Cancelled		-			-		-
Outstanding February 28, 2025		10,400		$	0.50		0.88

Expected Dividends: 0%

21○ ~~Table~~The ofCompany ~~Contents~~does not currently pay dividends, consistent with its growth-oriented business strategy.

~~NOTE~~Stock-Based 11Compensation ~~– LEASES~~Expense

~~The~~For ~~Company~~the ~~has~~three ~~entered~~months ~~into~~ended aAugust ~~operating lease for office space commencing on July 1~~31, 2025, ~~with~~the ~~an early~~Company ~~occupancy~~recognized ~~period beginning~~stock-based ~~on February~~compensation 1,expense ~~2025.~~related ~~The~~to ~~lease~~options ~~has a term~~ of 5 ~~years,~~USD ~~expiring on June 30~~$101, ~~2030~~624. ~~During the early occupancy period (February 1, 2025 – June 30, 2025), no rent payments are required.~~

~~Lease~~Note ~~Liability~~11 ~~and~~– ~~Right-of-Use~~Commitments ~~(ROU)~~and ~~Asset~~Contingencies

~~The~~Legal Company recognized a lease liability and ROU asset at the lease commencement date, calculated as the present value of future lease payments discounted at the Company’s incremental borrowing rate (IBR) of 5%. The following table summarizes the lease liability and ROU asset balances as of February 28, 2025:Proceedings

Description	Amount
Lease Liability	$	491,395
ROU Asset	$	482,667

In February 2024, Karbon-X were notified of a former employee filing a lawsuit against the company for wrongful termination. The Company is currently counter-suing and is expecting to prevail.

~~Lease~~Operating ~~Expense~~Leases

~~Lease~~The ~~expense~~Company ishas ~~recognized~~entered oninto a ~~straight-line~~operating ~~basis~~lease ~~over~~for ~~the~~office ~~lease~~space ~~term~~commencing ~~and~~on isJuly ~~included~~1, ~~in operating~~2025, ~~expenses in~~with ~~the~~an ~~consolidated~~early ~~statements~~occupancy ofperiod ~~operations~~beginning on February 1, 2025. ~~For~~The ~~the~~lease ~~quarter~~has ~~ended~~a ~~February~~term 28of 5 years, ~~2025~~expiring on June 30, 2030. During the ~~Company~~early ~~recognized~~occupancy ~~total~~period ~~lease~~(February ~~expense~~1, ~~of $8~~2025 – June 30,~~850~~ 2025), ~~consisting~~no ~~of:~~rent payments are required.

	·	Amortization of ROU Asset: $6,689.
	·	Interest on Lease Liability: $2,039.

Lease right-of-use assets represent the right to use an underlying asset pursuant to the lease for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Lease right-of-use assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our estimated incremental borrowing rate generally applicable to the location of the lease right-of-use asset, unless an implicit rate is readily determinable. We combine lease and certain non-lease components in determining the lease payments subject to the initial present value calculation. Lease right-of-use assets include upfront lease payments and exclude lease incentives, if applicable. When lease terms include an option to extend the lease, we have not assumed the options will be exercised.

~~Maturity~~Lease expense for operating leases generally consist of ~~Lease~~both ~~Liabilities~~fixed and variable components. Expense related to fixed lease payments are recognized on a straight-line basis over the lease term. Variable lease payments are generally expensed as incurred, where applicable, and include agreed-upon changes in rent, certain non-lease components, such as maintenance and other services provided by the lessor, and other charges included in the lease. Leases with an initial term of twelve months or less are not recorded on the balance sheet. We recognized total lease expense of approximately $67,578 and $8,875 for the three months ended August 31, 2025 and 2024, primarily related to operating lease costs paid to lessors from operating cash flows. We entered into our operating lease in April 2024 with a term of five years.

~~The~~19 ~~following~~Table ~~table summarizes the undiscounted cash flows for the lease liability as~~ of ~~February 28, 2025:~~Contents

Year	Lease Payments
2025	$	53,043
2026		108,395
2027		113,007
2028		115,313
2029		117,620
Thereafter		59,963
Total	$	567,341

Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year at August 31, 2025 were as follows:

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SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER OPERATING LEASES	Total
Calendar Year Ended
2025	$	37,128
2026		116,228
2027		123,492
2028		125,913
2029		128,335
Thereafter		54,482
Total lease payment		585,577
Less: Imputed interest		(76,261	)
Operating lease liabilities		509,316

Operating lease liability - current		80,793
Operating lease liability - non-current	$	428,523

NOTE 12 – DEPOSIT

SCHEDULE OF OTHER SUPPLEMENTAL INFORMATION UNDER OPERATING LEASE
Weighted average discount rate	5.00	%
Weighted average remaining lease term (years)	4.93

AsNote of12 ~~February~~– ~~28,~~Subsequent 2025, the Company has made advance payments for inventory totaling $606,998, which is included in Deposit on the condensed consolidated balance sheet. These payments relate to inventory purchases that have not yet been received as of the reporting date. The Company expects to take delivery of the inventory by July of 2025, at which point the amounts will be reclassified to inventory. Management evaluates these prepayments regularly to ensure recoverability and alignment with the Company’s operational needs.Events

~~NOTE~~The 13Company –entered ~~EMBEDDED~~into ~~DERIVATIVE~~a receivables financing arrangement on September 5, 2025 for receivables of $426,700 at a purchase price of $313,750.

On ~~February~~October 71, 2025, the Company issued ~~a $250~~83,~~000~~332 ~~unsecured~~shares ~~promissory note (the “Note”)~~ to atwo ~~Lender~~directors with a maturity date of February 7, 2026. The Note bears interest at a rate of 40% per annum, payable monthly, and is convertible at the election of the Lender into common shares of the Company at a conversion price of lesser of (i) 80% of the twenty day weighted average closing price of Lender’s common stock as ~~of the trading day immediately preceding such conversion (but not less than $0~~compensation.~~75 per share) or (ii) $0.90 per share. The Note includes a minimum interest clause and contains no prepayment restrictions.~~

InThe ~~accordance with ASC 815, the~~ Company ~~assessed~~evaluated ~~the~~subsequent ~~terms~~events ofthrough ~~the~~October ~~Note~~15, 2025 and identified anno ~~embedded~~other ~~conversion~~events ~~feature~~requiring ~~that~~recognition ~~qualifies~~or ~~for~~additional ~~separate accounting as a derivative liability~~disclosure. ~~The fair value of the embedded derivative at issuance was determined to be $56,500, which was recorded as a derivative liability with a corresponding debt discount.~~

As20 ofTable ~~the reporting period ended February 28, 2025, the unamortized discount on the Note was $52,168. The Company recognized interest expense~~ of $10,087 for the three months ended February 28, 2025, of which $5,753 related to contractual interest and $4,334 related to amortization of the debt discount. The fair value of the embedded derivative is remeasured at each reporting date, with changes in fair value recognized in the consolidated statement of operations. As of February 28, 2025, the fair value of the embedded derivative liability is $93,814.Contents

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NOTE 14 – SUBSEQUENT EVENTS

On March 25, 2025, the Company entered into a Definitive Agreement with an investor, pursuant to which the investor agreed to provide $1,095,000 in funding to the Company. The funds are intended to be used in support of the Company’s carbon trading activities, including trading in EU compliance-related products.

Under the terms of the agreement, the investment will accrue interest at a rate of 20% per annum, payable quarterly in either cash or common stock, at the investor’s discretion. The conversion price for stock payments is capped at USD $0.90 per share or 80% of the 20-day volume-weighted average price ("VWAP") if below $0.90.

Additionally, the investor is entitled to a royalty equal to 5% of trading profits, with the total royalty amount dependent on the timing of the investment’s full repayment. If repaid within six months, the royalty is equal to 50% of the investment amount. If repaid after six months, the royalty increases to 100% of the investment amount. Royalty payments commence upon full repayment of the investment and continue every 30 days thereafter until the full royalty obligation is satisfied.

The Company evaluated this agreement and determined that it represents a Type II subsequent event, as it relates to conditions that arose after the end of the reporting period (February 28, 2025). Accordingly, no adjustments have been made to the financial statements included in this Form 10-Q.

On April 7, 2025, the holder of the $250,000 convertible promissory note exercised its conversion option, resulting in the issuance of 295,873 shares of common stock. The shares were issued at a conversion price of $0.90 per share and represent the full principal amount of the note plus accrued interest.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion pertains to the historical operations and financial statements of Karbon-X Corp. ("Karbon-X" or the "Company") for the ~~nine~~three months ended ~~February~~August 2831, 2025, and ~~February 29~~ 2024. This discussion should be read in conjunction with the Company’s most recent Annual Report on Form 10-K/A for the year ended May 31, ~~2024~~2025, filed on September 1317, ~~2024~~2025, which provides additional context and details on the Company's financial condition and results of operations.

Forward-Looking Statements

The following Management's Discussion and Analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this Quarterly Report. The Management's Discussion and Analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect," and the like, and/or future-tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Quarterly Report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading "Risk Factors" in our various filings with the Securities and Exchange Commission. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.

The following discussion highlights the Company's results of operations and the principal factors that have affected its consolidated financial condition as well as its liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the Company's consolidated financial condition and results of operations presented herein. The following discussion and analysis are based upon Karbon-X Corp's unaudited financial statements contained in this Current Report on Form 10-Q, which have been prepared in accordance with generally accepted accounting principles in the United States. You should read the discussion and analysis together with such financial statements and the related notes thereto.

Overview

The Company 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 Project"), and Karbon-X Project became the wholly owned subsidiary of the Company in a reverse acquisition (the "Reverse Acquisition"). Pursuant to the Reverse Acquisition, all of the issued and outstanding shares of Karbon-X common stock were converted, at an exchange ratio of 20,000-for-1, into an aggregate of 20,000,000 shares of the Company's common stock, resulting in Karbon-X Project becoming a wholly owned subsidiary of the Company and all debt owed to the related party of Cocoluv, Inc. (the Company) was forgiven. The accompanying financial statements' share information has been retroactively adjusted to reflect the exchange ratio in the Reverse Acquisition. As part of the Reverse Acquisition, on April 14, 2022, the Company changed its name to Karbon-X Corp.

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Karbon-X provides customized transactional options, tailored insights, and scalable access to the Verified Emissions Reduction markets. Karbon-X changes the marketing framework of traditional carbon marketing by engaging the public versus industry with multiple forms of technology-based greenhouse gas reduction builds. Karbon-X will allow the public to purchase carbon offsets from an app that is subscription-based, with multiple levels of investment for every budget. Each subscription will support clean energy projects such as solar or wind power, methane capture, or reforestation and will reduce greenhouse gas emissions with provable, verifiable carbon credits.

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Karbon-X is in development of NFTs to digitize and allow for the trading of tokenized carbon credits in order to bring transparency and liquidity to the global carbon offset market. The aim of the decentralized platform is to enable offset trading on existing tokenized exchanges and their own exchange, accepting all forms of payment, including crypto, fiat, or card. The NFT minting platform for carbon credits allows carbon credit owners to mint their credits into NFTs for a secure and efficient method of trading in a market that appears set to grow rapidly in the coming years. A trading platform will allow the owners of the NFTs to monitor their assets while tracking their value and trading history. This is done on the blockchain to mitigate many risks such as double trading and long-term record-keeping issues. By using a "side chain" of Ethereum, costs are kept to a minimum for users.

References in this periodic report on Form 10-Q to "Karbon-X" or the "Company" may include references to the operations of our subsidiary Karbon-X Project. This entity is a 100% wholly owned subsidiary of Karbon-X and consequently reports quarterly financials up to a consolidated quarterly submission.

Critical Accounting Policies

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. Note 1 discusses the company’s accounting policies.

Results of Operations

Unaudited Results for the Three Months Ended ~~February~~August 2831, 2025, and ~~February 29,~~ 2024

Sales and Revenue

For the three-month period ended ~~February~~August 2831, 2025, the Company reported revenue of USD $~~238~~35,~~528~~658,933, aan ~~decrease~~increase of 427,883% compared to $~~247~~127,~~222~~429 in the same period in 2024. The ~~slight~~significant ~~decline~~increase in sales was primarily due to ~~fluctuations~~selling inof ~~pricing~~carbon credits through its new trading subsidiary.

Operating Expenses

Operating expenses for the three-month period ended ~~February~~August 2831, 2025, were $12,~~821~~658,~~772~~934, compared to $~~394~~825,~~863~~684 in the same period in 2024, representing a ~~361~~222% increase. The key factors driving this increase were:

· Marketing Expenses: Investment in customer acquisition and brand-building efforts, including strategic partnerships like the Oilers initiative, resulted in marketing expenses of $~~528~~628,~~150~~540, up from $6612,~~629~~351 in the ~~prior~~same ~~year~~period in 2024. · Salaries and Wages: Increased headcount, subcontractor costs, and wage adjustments contributed to payroll expenses of $~~841~~1,~~890~~598,649, a significant rise from $~~149,~~533,594 in the ~~prior~~same ~~year~~period in 2024. · Professional Fees: Costs related to legal, advisory, and compliance efforts amounted to $~~184~~107,~~068~~447, compared to $51145,~~188~~273 in the ~~prior~~same ~~year~~period in 2024. · Other Operating Expenses: These totaled $~~267~~324,~~664~~298, up from $~~127~~134,~~513~~466, reflecting the Company’s operational scale-up.

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Net Loss from Operations

The operating loss for the three-month period ended ~~February~~August 2831, 2025, was $(12,~~681~~596,~~096)~~234, compared to $~~(371~~804,~~399)~~766 in the same period in 2024. While revenue was stable, increased operating expenses offset these gains, as the Company continues to invest heavily in marketing, payroll, and compliance to drive long-term growth.

~~Unaudited~~22 ~~Results~~Table ~~for~~of ~~the Nine Months Ended February 28, 2025 and February 29, 2024~~Contents

Sales and Revenue

For the nine-month period ended February 28, 2025, the Company reported revenue of USD $1,530,349, a significant increase of 433% compared to USD $287,062 during the same period in 2024. This remarkable growth was driven by the successful launch of the Devvstream contract, which contributed substantially to the Company's revenue base and is expected to generate ongoing deferred revenue streams in future quarters.

Additionally, app subscription sales showed steady growth, driven by increased customer adoption, while revenue from carbon credit sales gained momentum during the period. Moving forward, the Company anticipates further revenue growth from the expansion of its app and new partnerships under development.

Operating Expenses

Operating expenses for the nine-month period ended February 28, 2025, totaled $4,412,366, compared to $1,023,694 in the same period in 2024, marking a 361% increase. The significant increase in operating expenses reflects the Company’s continued investment in scaling operations and market presence. Key factors include:

· Marketing Expenses: Increased by 859% to $915,494, reflecting strategic investments in customer acquisition campaigns, including partnerships such as the Oilers initiative. · Salaries and Wages: Rose to $2,176,431, a 369% increase, driven by expanded headcount, higher subcontractor expenses, and wage growth to support operational scale. · Professional Fees: Increased by 241% to $688,634, reflecting higher legal, advisory, and compliance costs associated with business growth and contractual obligations. · Other Operating Expenses: Grew by 141% to $631,807, reflecting higher costs related to ongoing operations and compliance requirements.

Net Loss from Operations

For the nine-month period ended February 28, 2025, the Company recorded an operating loss of $(3,652,837) compared to $(2,163,366) for the same period in 2024, representing a 69% increase. Despite the significant growth in revenue, the increase in operating expenses driven by marketing, payroll, and professional services contributed to the expansion of operating losses. However, these investments are viewed as essential for establishing the infrastructure and market positioning necessary for future profitability.

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Liquidity and Capital Resources

The following table sets forth the major components of our statements and consolidated statements of cash flows for the periods presented.

	Nine months ended February 28, 2025			Nine months ended February 29, 2024
	Three months ended August 31, 2025			Three months ended August 31, 2024
Cash used in operating activities		(42,~~496~~679,~~214~~849	)		(1,~~038~~460,~~148~~119	)
Cash used in investing activities		-(605,093	)		~~(727,409~~-	)
Cash from financing activities		23,~~917~~791,~~414~~543			1,~~803~~056,~~482~~000
Change in cash during the period		(1506,~~578,801~~601	)		37(348,~~925~~990	)
Effect of exchange rate change		(~~165~~147,~~727~~715	)		~~(32~~27,~~605~~565	)
Cash, beginning of period		2704,~~675,400~~346			~~206~~2,~~820~~675,400
Cash, end of period		~~930~~1,~~873~~358,662			~~212~~2,~~140~~298,845

As of ~~February~~August 2831, 2025, the Company had USD $6,~~308~~512,~~450~~590 in current assets

To date, the Company has financed its operations through equity sales and note issuances.

During ~~July~~June – ~~September~~August ~~2023~~2025, Karbon-X Corp. ~~completed~~converted aloans ~~private~~for ~~placement pursuant to Rule 506(c) of the Securities Exchange Act of 1934~~$2,193,195 asinto ~~amended. In that private placement the company sold 3~~4,~~274~~870,~~858~~291 shares ofat ~~common~~price ~~stock~~of at $0.5090 ~~per~~- ~~share for gross proceeds of~~ $0.45 ~~1,637,429,~~per ~~net of expenses related to issuances of $83,993~~share.

Further the Company converted a loan for $100,000 into 200,000 shares at price of $0.50 per share.

During November 2023, the Company sold 50,000 common stock at $2 per unit for total proceeds of $100,000.

Recent Developments

During the ~~nine~~three months ended ~~February~~August 2831, 2025, the Company strengthened its executive leadership team with the appointment of key hires. ~~Christopher~~Adriana ~~Mulgrew~~Ebell, a seasoned financial executive with over 2423 years of experience, joined the Company as Acting Chief Financial Officer (CFO). In this role, heshe will oversee the Company’s financial strategy, reporting, and compliance functions, contributing to enhanced financial management and planning as the Company continues its growth trajectory.

This appointment reflect our commitment to building a strong leadership team as we continue to execute on our strategic priorities and drive value for ~~shareholders~~stockholders.

Revenue Growth

	·	Q1 2026 revenue surged to $35.7 million, a 27,883% increase compared to $127,429 in Q1 2025.

	·	This growth was driven by the successful launch and scaling of Karbon-X’s carbon credit trading subsidiary.

Strategic Capital Formation

	·	$3.88 million raised

	·	$2.28 million in debt converted to equity, reflecting investor confidence and reducing future interest obligations.

Strengthened Liquidity Position

	·	Cash and cash equivalents increased by 93%, from $704,346 at the beginning of the quarter to $1.36 million at quarter-end.

	·	Total current assets rose to $6.5 million, up from $5.8 million in the prior quarter.

Asset Acquisition with High Upside

	·	Completed a strategic carbon-offset project portfolio acquisition for $605,093.

	·	Management estimates the fair market value of acquired projects exceeds $22 million, representing a significant potential return on investment.

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Operational Expansion

Inventory increased by 750%, from $99,644 to $847,017, reflecting ramp-up in carbon credit production and project development.

Global Impact & Innovation

Continued development of NFT-based carbon credit trading platform, enhancing transparency and liquidity in the voluntary carbon market.

Improved Financial Efficiency

Company maintained a gross profit of $293,869, up from $33,331 in Q1 2025.

Future Financing

In connection with its proposed business plan and currently ongoing and proposed acquisitions, in addition to the possible proceeds from this offering, the Company will be required to complete substantial and significant additional capital formation. Such formation could be through additional equity offerings, debt, bank financings, or a combination of any source of financing. There can be no assurance that the Company will be successful in completing such financings.

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Plan of Operations

As noted above, the continuation of our current plan of operations requires us to raise significant additional capital. If we are successful in raising capital through the sale of convertible notes or common shares, we believe that we will have sufficient cash resources to fund our plan of operations through 2025. If we are unable to do so, we may have to curtail and possibly cease some operations. We intend to use the net proceeds from the offering for operations, regulatory compliance, intellectual property, working capital, and general corporate purposes.

We continually evaluate our plan of operations to determine the manner in which we can most effectively utilize our limited cash resources. The timing of completion of any aspect of our plan of operations is highly dependent upon the availability of cash to implement that aspect of the plan and other factors beyond our control. There is no assurance that we will successfully obtain the required capital or revenues, or, if obtained, that the amounts will be sufficient to fund our ongoing operations.

Capital Expenditures

As of ~~February~~August 2831, 2025, we had no capital expenditures.

Commitments and Contractual Obligations

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management evaluated the effectiveness of the Company's internal control over financial reporting as of ~~February~~August 2831, 2025. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Integrated Framework (2013). Based on this evaluation, our management concluded that, as of ~~February~~August 2831, 2025, our internal control over financial reporting was not effective.

The Company has hired a Chief Financial Officer who can act as a second control person relative to the Company's financial operations. This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management's report in this quarterly report.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

As of the date here of the Company is not party to any other material legal proceedings and is not aware any legal proceedings contemplated by any governmental authority or any other party involving us or our properties other than the following:

On May 17, 2022, Karbon-X entered into a partnership with Silviculture Systems Corp and 4Ever Forest Foundation to acquire 80% of Silviculture for USD $7,300,000, with payments divided between common stock and capital contributions. The project involved planting 750,000 trees, developing a charcoal stream, and generating carbon credits. Karbon-X abandoned the deal in November 2023, writing off the investment and recognizing a loss of $1,064,203. We are currently in negotiations to resolve potential disputes arising from this situation.

In February 2024, Karbon-X were notified of a former employee filing a lawsuit against the company for wrongful termination. The Company is currently counter-suing and is expecting to prevail.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During ~~the~~June ~~nine~~– ~~months~~August ~~ended February 28,~~ 2025, Karbon-X Corp. ~~completed~~converted aloans ~~private~~for ~~placement pursuant to Rule 506(c) of the Securities Exchange Act of 1934~~$2, ~~as amended. In that private placement~~193,195 ~~the~~into ~~company sold $1~~4,~~886~~870,~~739~~291 shares ofat ~~common~~price ~~stock~~of at $0.90 ~~per~~- ~~share for gross proceeds of~~ $0.45 ~~1,673,842~~per share.

From November 2022 through August 10, 2023, Karbon-X Corp. completed a private placement pursuant to Rule 506(c) of the Securities Exchange Act of 1934, as amended. In that private placement, the company sold 4,632,297 shares of common stock at $0.50 per share for total gross proceeds of $2,316,486.

On June 6, 2023, the Company converted a loan for $100,000 into 200,000 shares at a price of $0.50 per share.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

Not applicable

Item 6. Exhibits

31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer
31.2	Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Chief Financial Officer
101	Interactive data files pursuant to Rule 405 of Regulation S-T.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Karbon-X Corp.(Registrant)
Date: April 18, 2025	By:	/s/ Chad Clovis
Date: October 15, 2025	By:	/s/ Chad Clovis
	Chad ClovisChief Executive Officer and Director(Principal Executive Officer)	~~Chad ClovisChief Executive Officer and Director(Principal Executive Officer)~~
Date: April 18, 2025	By:	/s/ Christopher Mulgrew
Date: October 15, 2025	By:	/s/ Adriana Ebell
		Christopher MulgrewChief Financial Officer,(Principal Financial Officer)
	Adriana EbellActing Chief Financial Officer,(Principal Financial Officer)

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