KARX 10-K & 10-Q changes, risk factors and insider trading
Karbon-X Corp. · OTC · Perfumes, Cosmetics & Other Toilet Preparations · CIK 1729637 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We have identified a material weakness in our internal control over financial reporting, and if we fail to remediate it our financial statements may contain errors and investor confidence may be adversely affected.”
New heading “There is substantial doubt about our ability to continue as a going concern.”
New heading “We depend on a small number of customers and counterparties, and our largest customer has not paid amounts invoiced.”
New heading “Conversion of our outstanding convertible notes at floating prices could substantially dilute existing stockholders.”
New heading “We operate in multiple countries and currencies, which exposes us to foreign exchange, regulatory and tax risks.”
New heading “The value of the DevvStream securities we hold and are entitled to receive is uncertain following the delisting of those shares.”
Removed heading “Others may bring infringement claims against us, which could be time-consuming and expensive to defend.”
Largest changes
“We have identified a material weakness in our internal control over financial reporting, and if we fail to remediate it our financial statements may contain errors and investor confidence may be adversely affected.”see in full comparison
“The value of the DevvStream securities we hold and are entitled to receive is uncertain following the delisting of those shares.”see in full comparison
“There is substantial doubt about our ability to continue as a going concern.”see in full comparison
“We hold common shares of DevvStream Holdings Inc. and are entitled to receive additional shares under our agreements with that company. Those shares were delisted from the Nasdaq Stock Market on June 24, 2026, which may materially reduce their liquidity and value. Although the agreements provide a price-based true-up, the value we ultimately realize depends on the counterparty’s ability to deliver shares and on the market for those shares, and we may be unable to realize the carrying value of the securities and the related receivable.”see in full comparison
“As described in Item 9A, management concluded that our internal control over financial reporting and our disclosure controls and procedures were not effective as of May 31, 2026 because of a material weakness in our period-end financial reporting process. During fiscal 2026 our operations expanded significantly and we entered into a number of complex, non-routine transactions, and the accounting resources and review procedures in place for most of the year were not sufficient to ensure that those transactions and the year-end close were recorded and reviewed on a timely basis. …”see in full comparison
“Our consolidated financial statements have been prepared assuming that we will continue as a going concern. We have incurred recurring losses, had negative working capital of $(4,040,004) and a stockholders’ deficit of $(5,984,102) at May 31, 2026, and have an accumulated deficit of $25,580,380. These conditions raise substantial doubt about our ability to continue as a going concern, as described in Note 1 to the consolidated financial statements. …”see in full comparison
Full comparison: every changed paragraph (20)
An investment in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks described below. Our business, financial condition, results of operations and cash flows could be materially adversely affected by any of these risks, and the market or trading price of our securities could decline due to any of these risks. In addition, please read "Disclosurethe Regardingcautionary Forward-Lookingstatement Statements" in this Annual Report, where we describe additional uncertainties associated with our business and theregarding forward-looking statements includedat orthe incorporatedbeginning by reference inof this Annual Report. Please note that additional risks not presently known to us or that we currently deem immaterial may also impair our business and operations. In this Section, the terms the “Company,” “we”, “our” and “us” refer to Karbon-X Corp. as well as our subsidiarysubsidiaries Karbon-X Project, Inc.Inc, Karbon-X USA Corp, Karbon-X Trading, Allcot Limited, Karbon-X Iberia SL and Allcot X Colombia S.A.S.
WeDuring obtainedthe year ended May 31, 2026 we raised approximately $1.7$5.4 million infrom ourconvertible recentnote privateissuances, placements$4.8 million from long-term debt, $0.6 million from receivables financing arrangements and $0.2 million from sales of common stock, which we are using for development and operations. However, if in the future we do not turn profitable or generate cash from operations and additional capital is needed to support operations, economic and market conditions may make it difficult or impossible to raise additional funds through debt or equity financings. If funds are not sufficient to support operations, we may need to pursue additional financings or reduce expenditures to meet our cash requirements. If we do obtain such financing, we cannot assure that the amount or the terms of such financing will be as attractive as we may desire, and your equity interest in the company may be diluted considerably. If we are unable to obtain such financing when needed, or if the amount of such financing is not sufficient, it may be necessary for us to take significant cost saving measures or generate funding in ways that may negatively affect our business in the future. To reduce expenses, we may be forced to make personnel reductions or curtail or discontinue development programs. To generate funds, it may be necessary to monetize future royalty streams, sell intellectual property, divest of technology platforms or liquidate assets. However, there is no assurance that, if required, we will be able to generate sufficient funds or reduce spending to provide the required liquidity. Long-term capital requirements will depend on numerous factors, including, but not limited to, the status of collaborative arrangements, the progress of research and development programs and the receipt of revenues from sales of products. Our ability to achieve and/or sustain profitable operations depends on a number of factors, many of which are beyond our control.
We have identified a material weakness in our internal control over financial reporting, and if we fail to remediate it our financial statements may contain errors and investor confidence may be adversely affected.
As described in Item 9A, management concluded that our internal control over financial reporting and our disclosure controls and procedures were not effective as of May 31, 2026 because of a material weakness in our period-end financial reporting process. During fiscal 2026 our operations expanded significantly and we entered into a number of complex, non-routine transactions, and the accounting resources and review procedures in place for most of the year were not sufficient to ensure that those transactions and the year-end close were recorded and reviewed on a timely basis. We appointed a Chief Accounting Officer in February 2026 and have implemented additional close and review controls, but remediation is in progress and will require those controls to operate for a sufficient period before we can conclude that the material weakness has been remediated. If we are unable to remediate the material weakness, or if we identify additional material weaknesses, our financial statements could contain material misstatements, we could fail to meet our reporting obligations on a timely basis, and the market price of our common stock could be adversely affected.
There is substantial doubt about our ability to continue as a going concern.
Our consolidated financial statements have been prepared assuming that we will continue as a going concern. We have incurred recurring losses, had negative working capital of $(4,040,004) and a stockholders’ deficit of $(5,984,102) at May 31, 2026, and have an accumulated deficit of $25,580,380. These conditions raise substantial doubt about our ability to continue as a going concern, as described in Note 1 to the consolidated financial statements. Our ability to continue depends on raising additional capital and ultimately achieving profitable operations, and there is no assurance that we will be able to do so on acceptable terms or at all. If we cannot, we may be forced to curtail or cease operations, and investors could lose their entire investment.
We depend on a small number of customers and counterparties, and our largest customer has not paid amounts invoiced.
One customer accounted for approximately 86% of our consolidated revenue for the year ended May 31, 2026, and a single trade receivable represented 69% of accounts receivable at that date. During the year we invoiced our largest customer EUR 6,457,500 for credits not yet delivered, of which EUR 3,797,500 remained unpaid at May 31, 2026 and has not been recognized as a receivable; we have made a written demand for payment. The loss of, or a dispute with, a significant customer or trading counterparty, or the failure of a counterparty to pay or to deliver credits, could materially reduce our revenue and cash flows.
Conversion of our outstanding convertible notes at floating prices could substantially dilute existing stockholders.
Substantially all of our convertible notes are convertible at discounts to the market price of our common stock, with conversion prices that reset by reference to recent trading prices. At May 31, 2026 we estimated that approximately 23.9 million shares were issuable on conversion of notes then outstanding, and we have issued further notes since the year end. Declines in our stock price increase the number of shares issuable and the dilution to existing holders, and sales of shares received on conversion could depress the market price of our common stock. Beneficial ownership limitations in the notes restrict the number of shares any holder may hold at one time but do not limit the aggregate number of shares issuable over time.
We operate in multiple countries and currencies, which exposes us to foreign exchange, regulatory and tax risks.
We conduct business through subsidiaries in Canada, Cyprus, Ireland, Spain and Colombia and transact in Canadian dollars, euros and Colombian pesos as well as U.S. dollars. Fluctuations in exchange rates affect our reported results and the U.S. dollar value of our foreign-currency receivables, payables and financing obligations. Operating in multiple jurisdictions also subjects us to differing carbon-market, tax, employment and regulatory regimes, and to the cost and complexity of maintaining compliance and internal controls across those jurisdictions.
The value of the DevvStream securities we hold and are entitled to receive is uncertain following the delisting of those shares.
We hold common shares of DevvStream Holdings Inc. and are entitled to receive additional shares under our agreements with that company. Those shares were delisted from the Nasdaq Stock Market on June 24, 2026, which may materially reduce their liquidity and value. Although the agreements provide a price-based true-up, the value we ultimately realize depends on the counterparty’s ability to deliver shares and on the market for those shares, and we may be unable to realize the carrying value of the securities and the related receivable.
We soft-launched our APPapp in early 2023 and it was completed and made publicly available in March 2025, and although we have hired highly qualified personnel with specialized expertise, as a company, we have limited experience commercializing products on our own. In order to commercialize the app and our carbon credits business, we have to build our sales, marketing, distribution, managerial and other non-technical capabilities and make arrangements with third parties to perform these services when needed. We may have to hire sales representatives and district managers to fill sales territories. To the extent we rely on third parties to commercialize our business, we may receive less revenues or incur more expenses than if we had commercialized the products ourselves. In addition, we may have limited control over the sales efforts of any third parties involved in our commercialization efforts. If we are unable to successfully implement our commercial plans and drive adoption by patients and physicians of our products by customers through our sales, marketing and commercialization efforts, or if our partners fail to successfully commercialize our products, then we may not be able to generate sustainable revenues from product sales which will have a material adverse effect on our business and future product opportunities. Similarly, we may not be successful in establishing the necessary commercial infrastructure, including sales representatives, wholesale distributors, legal and regulatory affairs teams. The establishment and development of commercialization capabilities to market our products has been and will continue to be expensive and time-consuming. As we continue to develop these capabilities, we will have to compete with other companies to recruit, hire, train and retain sales and marketing personnel. If we have underestimated the necessary sales and marketing capabilities or have not established the necessary infrastructure to support successful commercialization, or if our efforts to do so take more time and expense than anticipated, our ability to market and sell our products may be adversely affected.
We have begun to retain and partner with third-party service providers to perform a variety of functions related to the sale and distribution of our products, key aspects of which are out of our direct control. If these third-party service providers fail to comply with applicable laws and regulations, fail to meet expected deadlines, or otherwise do not carry out their contractual duties to us, or encounter physical damage or natural disaster at their facilities, our ability to deliver product to meet commercial demand would be significantly impaired. In addition, we may utilize third parties to perform various other services for us relating to sample accountability and regulatory monitoring, including adverse event reporting, safety database management and other product maintenance services. If the quality or accuracy of the data maintained by these service providers is insufficient, our ability to continue to market our products could be jeopardized or we could be subject to regulatory sanctions. We do not currently have the internal capacity to perform these important commercial functions, and we may not be able to maintain commercial arrangements for these services on reasonable terms.
Others may bring infringement claims against us, which could be time-consuming and expensive to defend.
Third parties may claim that the use or sale of our technologies infringe their patent rights. As with any litigation where claims may be asserted, we may have to seek licenses, defend infringement actions or challenge the validity of those patents in the patent office or the courts. If these are not resolved favorably, we may not be able to continue to develop and commercialize our product candidates. Even if we were able to obtain rights to a third party’s intellectual property, these rights may be non-exclusive, thereby giving our competitors potential access to the same intellectual property. If we are found liable for infringement or are not able to have these patents declared invalid or unenforceable, we may be liable for significant monetary damages, encounter significant delays in bringing products to market or be precluded from participating in the development, use or sale of products covered by patents of others. Any litigation could be costly and time-consuming and could divert the attention of our management and key personnel from our business operations. We may not have identified, or be able to identify in the future, U.S. or foreign patents that pose a risk of potential infringement claims. Ultimately, we may be unable to commercialize some of our product candidates as a result of patent infringement claims, which could potentially harm our business.
Purchasers of our common stock will experience dilution of their investment upon exercise of the employee stock option and other stock optionsoptions, note conversions or issued common shares.
The Company is, and will be, heavily dependent on the skill, acumen and services of the management of the Company. The loss of the services of thisthese individuals or any other key individuals, including specifically Chad Clovis, and certain others, for any substantial length of time would materially and adversely affect the Company’s results of operation and financial position. (See “Management”).
Management's Discussion & Analysis (MD&A)
New heading “Carbon Credit Inventory”
New heading “Asset Acquisition and Acquired Intangible Assets”
Removed heading “Effects of COVID-19”
Removed heading “Fiscal year ended May 31, 2025”
Removed heading “Sales and Revenue”
Removed heading “Operating Expenses”
Largest changes
Full comparison: every changed paragraph (48)
The following discussion relates to the historical operations and financial statements of Karbon-X Corp. for the fiscal years endingended May 31, 20252026 and May 31, 2024.2025.
As a result of the Reorganization Agreement and the change in business and operations of the Company, a discussion of the financial results of the Company, formally known as Cocoluv, Inc., prior to February 21, 2022 is not pertinent, and, under generally accepted accounting principles in the United States the historical financial results of Karbon-X Project, Inc., the acquirer for accounting purposes, prior to the Reorganization Agreement are considered the historical financial results of the Company.
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 Karbon-X Corp’s audited and unauditedconsolidated financial statements contained in this CurrentAnnual Report, 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.
Effects of COVID-19
In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and the related adverse public health developments have adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. Management has determined that there has been no significant impact to the Company’s operations, however management continues to monitor the situation.
Carbon Credit Inventory
Carbon credit inventory is carried at the lower of cost and net realizable value. Judgment is required in assessing net realizable value for credits of different vintages, registries and project types, for which observable market prices may be limited.
Asset Acquisition and Acquired Intangible Assets
The June 2025 acquisition of assets from Allcot AG was accounted for as an asset acquisition under ASC 805-50, with the consideration paid, including transaction costs, allocated to the acquired project pipeline as a single asset group. Judgment is required in determining the unit of account, the 27-year weighted-average useful life over which the pipeline is amortized, and in evaluating the asset group for recoverability, which depends on management’s forecasts of project development cash flows.
Other than the derivative liabilities presented below, the carrying amount of the Company’s financial assets and liabilities approximate their fair values. The securities receivable (Note 16) represents the Company’s entitlement under the price-floor provisions of the Carbon Credit Purchase Agreement, is measured at the guaranteed amount of $1,137,197 less the fair value of the DEVS shares held, and is remeasured at each reporting date as that fair value changes; its carrying amount therefore approximates fair value.
Other than the derivative liabilities presented below, the carrying amount of the Company’s financial assets and liabilities approximate their fair values.
The Company measures certain financial instruments at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement. As of May 31, 2025,2026, the Company evaluated the conversion features embedded in certain convertible promissory notes and determined that they representrequire bifurcation and measurement at fair value as derivative liabilities requiring bifurcation under ASC 815-15.liabilities.
The Company uses a path-dependent valuation methodsmodel to estimate the fair value of the derivative liabilities associated with its convertible notes. The model incorporates significant unobservable inputs, including:
For the derivative embedded in the note issued under the Maintenance Agreement, the model measures the full conversion feature at a floating conversion price equal to 85% of the lowest volume weighted average price over the trailing ten trading days, resetting at each conversion, and applies the 4.99% beneficial ownership limitation as a path-dependent constraint on the timing of exercise rather than as a cap on the amount subject to conversion. The assumed rate of disposal of conversion shares is calibrated to the median daily trading volume of the Company’s common stock over the term of the note of approximately 15,000 shares per day.
During the year ended 31 May 2026 the Company changed the valuation technique used to measure its embedded conversion derivatives from a binomial lattice to a path-dependent Monte Carlo simulation. The conversion features carry a beneficial ownership limitation restricting the holder to 4.99% of the shares outstanding, the effect of which depends on the sequence of prior conversions and cannot be represented in a recombining lattice. The Company changed technique because the simulation reflects that feature and is therefore more representative of fair value. The change was applied prospectively as a change in accounting estimate. Under the lattice technique previously applied, which did not reflect the beneficial ownership limitation as a path-dependent constraint, the derivative embedded in the note issued under the Maintenance Agreement would have been measured at approximately $724,568 at May 31, 2026 using the same inputs; the simulation measured it at $302,715, a reduction of approximately $421,853, substantially all of which reflects the incorporation of the 4.99% limitation.
The following table summarizes the fair value hierarchy of the Company’s financial assets and financial liabilities measured at fair value on a recurring basis as of May 31, 2026 and 2025:
The following table summarizes the changes in Level 3 derivative liabilities measured at fair value on a recurring basis.basis for the years ended May 31, 2026 and 2025.
The gain of $845,280 presented in the consolidated statements of operations for the year ended May 31, 2026 comprises the $856,389 change in fair value shown above, net of $11,109 recognized on the initial measurement of derivatives issued during the year.
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, applying the five-step model: identifying the contract with the customer, identifying the performance obligations, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when or as each performance obligation is satisfied.
Principal versus agent. For substantially all of its revenue the Company has concluded that it acts as principal. In those arrangements the Company obtains control of the carbon credits before they are transferred to the customer: it holds the credits in its own registry accounts, bears inventory risk from the point of purchase or issuance until delivery, and has discretion in establishing the price charged to the customer. Revenue in those arrangements is recognized gross, at the consideration to which the Company expects to be entitled, with the cost of the credits presented in cost of revenue.
A minor portion of the Company’s revenue arises from arrangements in which the Company facilitates a trade between a counterparty and a purchaser without obtaining control of the underlying credits. In those arrangements the Company acts as agent and revenue is recognized net, in an amount equal to the commission or fee to which the Company is entitled.
In 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.
Rates for consulting services are typically per day, per hour, or a similar basis. Consulting revenue is recognized over the period in which the service is provided.
Revenue for sales of carbon credits is recognized at a point in time when control of the credit transfers to the buyer. The Company act as a principal in all revenue transactions.
For the Fiscal Year ended May 31, 20242026 the Company generated $412,057$55,860,322 in revenue from its business operations and incurred a net loss of $2,744,583.$13,589,546. As of May 31, 2024,2026, the Company had negative working capital of $2,273,655.$(4,040,004).
For the Fiscal Year ended May 31, 2026 the Company generated $55,860,322 in revenue, an increase of $52,696,550 over the $3,163,772 generated in the year ended May 31, 2025. The increase is principally attributable to industrial carbon credit trading conducted through Karbon-X Trading Limited, a newly formed subsidiary, together with growth in the Company's existing carbon credit programs. Cost of revenue was $55,000,480, producing gross profit of $859,842 and a gross margin of 1.5%, compared with gross profit of $801,467 and a gross margin of 25.3% in the prior year. The decline in gross margin reflects the shift in the revenue mix towards high-volume, low-margin trading activity.
For the Fiscal Year ended May 31, 2024 the Company generated $412,057 in revenue. We are just at the beginning of our commercialization efforts which we expect to improve during the current fiscal year.
Operating expenses for the Fiscal Year ended May 31, 2026 totaled $11,925,399, compared with $7,449,148 in the prior year. Operating expenses included salaries and wages of $5,558,515, marketing expenses of $3,037,475, professional fees of $1,471,523 (including legal costs of the former-contractor dispute described in Item 3), a provision for credit losses on the loan receivable of $628,196 and other operating expenses of $1,229,690. The increase reflects the cost of the subsidiaries newly established following the Allcot asset acquisition and the expansion of the Company’s trading and corporate functions.
Operating expenses for the Fiscal Year ended May 31, 2025 totaled $1,602,897. Operating expenses included marketing expenses of $176,476, office and general expenses, professional fees, development expenses for our app and expenses relating to a project feasibility studies. The majority of marketing expenses a one-time expense paid in Company equity.
Net loss after income taxes was $13,589,546 during the Fiscal Year ended May 31, 2026, compared with $7,053,492 in the prior year. Total comprehensive loss, including a foreign currency translation gain of $241,080, was $13,348,466. The increase in net loss is principally attributable to interest expense of $3,321,168, which includes $1,003,557 of debt discount amortization, $125,570 of debt discount written off on conversion and $19,518 written off on the non-cash settlement of maintenance fees, together with the $628,196 provision for credit losses recorded on the loan receivable and the increase in operating expenses described above.
Net loss from operations after income taxes and foreign currency translation loss was $2,733,200 during the Fiscal Year ended May 31, 2024. Again, this was as a result principally of marketing expenses but also for office and general expenses, app development expense and project feasibility costs.
Fiscal year ended May 31, 2025
For the Fiscal Year ended May 31, 2025 the Company generated $3,163,772 in revenue from its business operations and incurred a net loss of $7,084,463. As of May 31, 2025, the Company had working capital of $(1,902,607).
Sales and Revenue
For the Fiscal Year ended May 31, 2025 the Company generated $3,163,772 in revenue. We are just at the beginning of our commercialization efforts which we expect to improve during the current fiscal year.
Operating Expenses
Operating expenses for the Fiscal Year ended May 31, 2025 totaled $7,449,147. Operating expenses included salary expenses of $3,774,033, professional fees of $859,088 marketing expenses of $2,044,903, and office and general expenses, development expenses for our app and expenses relating to a project feasibility studies.
Net Loss
Net loss from operations after income taxes and foreign currency translation loss was $7,084,463 during the Fiscal Year ended May 31, 2025. Again, this was as a result principally of the loss of investment related to Silviculture.
As of May 31, 2025,2026, the Company had $7,325,111$6,061,591 in current assets.assets and $10,101,595 in current liabilities, resulting in negative working capital of $(4,040,004).
Total assets at May 31, 2026 were $9,617,713 (May 31, 2025: $6,779,972) and total liabilities were $15,601,815 (May 31, 2025: $8,149,045). Amounts invoiced under contracts on which neither the Company nor the counterparty had performed at the balance sheet date, and the corresponding contract liabilities and supplier balances, are not recognized; see Notes 9 and 16.
To date, the Company has financed its operations through equity sales.sales, convertible note issuances, long-term debt and receivables financing arrangements.
During the year ended May 31, 2026, the Company received $5,370,145 of cash proceeds from convertible notes payable, $4,788,155 from long-term debt, $591,080 from receivables financing obligations and $242,000 from the sale of common stock.
During the year ended May 31, 2025, the Company sold 1,926,742 shares at $.90 per share for total proceeds of $1,712,099.
In connection with its proposed business plan and possible 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 completion of such financings.
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 common shares, we believe that we will have sufficient cash resources to fund our plan of operations through 2025.fiscal 2027. 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 research and development, operations, regulatory compliance, intellectual property, working capital and general corporate purposes.
As of May 31, 20252026 we had capital expenditures of $2,543.$4,341 and capitalized app development costs of $82,146.
To date the Company has generated $3,575,829$59,436,151 in revenues from its business operations and has incurred operatingan lossesaccumulated since inceptiondeficit of $11,990,833.$25,580,380. As of May 31, 2025,2026, the Company has negative working capital of ($(1,902,6074,040,004). 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.
What changed in the latest 10-Q
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.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
Unaudited Results for thesee in full comparisonSixNineMonthsmonthsEndedendedNovemberFebruary30,28,2025,2026, and20242025
For thesee in full comparisonsix-monthnine-month period endedNovemberFebruary30,28,2025,2026, the Company reported revenue of USD$56,506,557,$60,779,140, an increase of4,238%3,872% compared to$1,302,489$1,530,349 in the same period in2024.2025. The significant increase in sales was primarily due to selling of carbon credits through its new trading subsidiary.
Operating expenses for thesee in full comparisonsix-monthnine-month period endedNovemberFebruary30,28,2025,2026, were$5,531,705,$8,369,045, compared to$2,561,565$4,412,366 in the same period in2024,2025, representing a116%90% increase. The key factors driving this increase were:
The operating loss for thesee in full comparisonsix-monthnine-month period endedNovemberFebruary30,28,2025,2026, was$4,044,012,$7,594,456, compared to$1,966,321$3,710,280 loss in the same period in2024.2025. 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.
For the three-month period endedsee in full comparisonNovemberFebruary30,28,2025,2026, the Company reported revenue of USD$20,847,625,$4,272,583, an increase of1,674%1,691% compared to$1,175,060$238,528 in the same period in2024.2025. The significant increase in sales was primarily due to selling of carbon credits through its new trading subsidiary.
Operating expenses for the three-month period endedsee in full comparisonNovemberFebruary30,28,2025,2026, were$2,872,771,$2,837,340, compared to$1,735,881$1,821,772 in the same period in2024,2025, representing a68%56% increase. The key factors driving this increase were:
Full comparison: every changed paragraph (13)
The following discussion pertains to the historical operations and financial statements of Karbon-X Corp. ("Karbon-X" or the "Company") for the sixnine months ended NovemberFebruary 30,28, 20252026 and 2024.2025. 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, 2025, filed on September 17, 2025, which provides additional context and details on the Company's financial condition and results of operations.
Unaudited Results for the Three Months Ended NovemberFebruary 30,28, 2025,2026, and 20242025
For the three-month period ended NovemberFebruary 30,28, 2025,2026, the Company reported revenue of USD $20,847,625,$4,272,583, an increase of 1,674%1,691% compared to $1,175,060$238,528 in the same period in 2024.2025. The significant increase in sales was primarily due to selling of carbon credits through its new trading subsidiary.
Operating expenses for the three-month period ended NovemberFebruary 30,28, 2025,2026, were $2,872,771,$2,837,340, compared to $1,735,881$1,821,772 in the same period in 2024,2025, representing a 68%56% increase. The key factors driving this increase were:
The operating loss for the three-month period ended NovemberFebruary 30,28, 2025,2026, was $1,447,776,$4,360,329, compared to $1,161,555$1,681,096 loss in the same period in 2024.2025. 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 Results for the SixNine Monthsmonths Endedended NovemberFebruary 30,28, 2025,2026, and 20242025
For the six-monthnine-month period ended NovemberFebruary 30,28, 2025,2026, the Company reported revenue of USD $56,506,557,$60,779,140, an increase of 4,238%3,872% compared to $1,302,489$1,530,349 in the same period in 2024.2025. The significant increase in sales was primarily due to selling of carbon credits through its new trading subsidiary.
Operating expenses for the six-monthnine-month period ended NovemberFebruary 30,28, 2025,2026, were $5,531,705,$8,369,045, compared to $2,561,565$4,412,366 in the same period in 2024,2025, representing a 116%90% increase. The key factors driving this increase were:
The operating loss for the six-monthnine-month period ended NovemberFebruary 30,28, 2025,2026, was $4,044,012,$7,594,456, compared to $1,966,321$3,710,280 loss in the same period in 2024.2025. 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.
As of NovemberFebruary 30,28, 2025,2026, the Company had USD $17,534,424$17,869,697 in current assets To date, the Company has financed its operations through equity sales and note issuances.
During June 2025 – NovemberFebruary 2025,2026, Karbon-X Corp. converted loan principal and interest of $2,284,148 into 4,870,291 shares at price of $0.90 - $0.45 per share.
During the sixnine months ended NovemberFebruary 30,28, 2025,2026, the Company strengthened its executive leadership team with the appointment of key hires. Adriana Ebell, a seasoned financial executive with over 23 years of experience, joined the Company as Acting Chief Financial Officer (CFO). In this role, she 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.
As of NovemberFebruary 30,28, 2025,2026, we had one asset acquisition as disclosed above, and no other capital expenditures.
KARX insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding KARX (13F)
None of the 59 investors we track reported a position in their latest 13F.