Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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 August 31, 2024

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.)

510 5th ST SW, Suite 910 Calgary, AB, Canada T2P 3S2

(Address of principal executive offices) (Zip Code)

778-256-5730

(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		N/A		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 October 21, 2024, there were 83,463,640 shares of common stock issued and outstanding.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements.	F-1 to F-11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	6
Item 4.	Controls and Procedures.	6

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings.	7
Item 1A.	Risk Factors.	7
Item 2.	Unregistered Sales of Securities and Use of Proceeds.	7
Item 3.	Defaults Upon Senior Securities.	7
Item 4.	Mining Safety Disclosure.	7
Item 5.	Other Information.	7
Item 6.	Exhibits.	7

Table of Contents

Contents

PART 1 FINANCIAL INFORMATION		Page(s)

Consolidated Balance Sheets at August 31, 2024 (Unaudited) and May 31, 2024		F-2

Consolidated Statements of Operations for the Three Months Ended August 31, 2024, and 2023 (Unaudited)		F-3

Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended August 31, 2024, and 2023 (Unaudited)		F-4

Consolidated Statements of Cash Flows for the Three Months Ended August 31, 2024 and 2023 (Unaudited)		F-5

Notes to the Consolidated Financial Statements		F-6

F-1

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KARBON-X CORP.

Consolidated Balance Sheets

	August 31, 2024			May 31, 2024
ASSETS	(Unaudited)			(Audited)
Current assets
Cash and cash equivalents	$	2,298,845		$	2,675,400
Accounts receivable		56,893			113,074
Sales tax receivable		11,714			7,210
Prepaid expenses and other current assets		9,247			1,000
Total current assets		2,376,699			2,796,684

Property and equipment		6,446			6,918
Internally Developed Software		527,208			521,372
Inventory		362,892			316,738
Right of use asset		-			316,519
Security deposit		15,127			12,351
Total assets	$	3,288,372		$	3,970,582

LIABILITES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	123,996		$	127,219
Current portion of lease-liability		-			21,945
Short-term loan		-			36,500
Stock Payable		-			630,000
Payroll liabilities		15,004			24,103
Total Current Liabilities		139,000			839,769

Non-current portion of lease liability		-			302,557
Total Liabilities		139,000			1,142,325
Commitments and contingencies		-			-
Shareholders’ equity (deficit)
Common stock $0.001 par value, 200,000,000 shares authorized, 83,463,640 and 82,174,750 shares issued and outstanding as of August 31, 2024 and May 31, 2024, respectively.		83,415			82,176
Additional Paid-in capital		8,767,087			7,675,826
Accumulated deficit		(5,742,108	)		(4,937,342	)
Accumulated other comprehensive gain (loss)		40,978			7,597
Total shareholders’ equity (deficit)		3,149,372			2,828,257
Total liabilities and shareholders’ equity (deficit)	$	3,288,372		$	3,970,582

The accompanying notes are an integral part of these financial statements

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KARBON-X CORP.

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended			Three Months Ended
	August 31, 2024			August 31, 2023
Operations
Total revenue	$	127,429		$	3,758
Cost of revenue		94,098			549
Gross profit		33,331			3,209

Marketing expenses		12,351			21,395
Salaries and wages		533,594			172,887
Professional fees		145,273			78,291
Other operating expenses		134,466			52,901
Total operating expenses		825,684			325,474

Loss from Operations		(792,353	)		(322,265	)

Other income (expenses)
Other income (expenses)		(12,413	)		(27,767	)
Net loss before income tax		(804,766	)		(350,032	)
Federal income tax expense		-			-
Net loss before income tax		(804,766	)		(350,032	)

Other comprehensive loss
Foreign currency translation gain (loss)		33,381			(3,223	)
Total comprehensive loss	$	(771,385	)	$	(353,225	)

Earnings Per Share
Weighted average shares outstanding (Basic and Diluted)		81,501,984			75,895,837
Basic and fully diluted loss per share	$	(0.01	)	$	(0.00	)

The accompanying notes are an integral part of these financial statements

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KARBON-X CORP.

Consolidated Statements of Changes in Shareholders’ Equity

For the Three Months Ended August 31, 2024 and 2023

(Unaudited)

Three Months Ended August 31, 2024.

	Common Stock				Shares to		Additional Paid		Accumulated			Accumulated other Comprehensive
Description	Shares		Amount		be issued		in Capital		Deficit			gain (loss)		Total
Balance May 31, 2024		82,174,750	$	82,176	$	-	$	7,675,826	$	(4,937,342	)	$	7,597	$	2,828,257
Issuance of shares for cash		1,288,890		1,239		-		1,091,261		-			-		1,092,500
Translation loss		-		-		-		-		-			33,381		33,381
Net loss for the period		-		-		-		-		(804,766	)		-		(804,766	)
Balance August 31, 2024		83,463,640	$	83,415	$	-	$	8,767,087	$	(5,742,108	)	$	40,978	$	3,149,372

Three Months Ended August 31, 2023.

	Common Stock				Shares to			Additional Paid		Accumulated			Accumulated other Comprehensive
Description	Shares		Amount		be issued			in Capital		Deficit			gain (loss)			Total
Balance May 31, 2023		72,579,000	$	72,579	$	1,750,000		$	2,638,532	$	(2,192,106	)	$	(3,786	)	$	2,265,219
Shares to be issued for investment		-		-		375,000			-		-			-			375,000
Shares to be issued as stock compensation		2,500,000		2,500		(625,000	)		622,500		-			-			-
Issuance of shares for cash and warrants, net		3,274,858		3,275		-			1,552,396		-			-			1,555,671
Conversion of loan to shares		200,000		200		-			99,800		-			-			100,000
Translation gain (loss)		-		-		-			-		-			(3,223	)		(3,223	)
Net loss		-		-		-			-		(350,032	)		-			-
Balance August 31, 2023		78,553,858	$	78,554	$	1,500,000		$	4,913,228	$	(2,542,138	)	$	(7,009	)	$	3,942,635

The accompanying notes are an integral part of these financial statements

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KARBON-X CORP.

Consolidated Statements of Cash Flow

(Unaudited)

	Three Months Ended			Three Months Ended
	August 31, 2024			August 31, 2023
Cash flows from operating activities
Net loss	$	(804,765	)	$	(350,032	)
Adjustments to reconcile net loss to net cash:
Depreciation expense		542			556
Amortization of ROU		320,061			4,727
Loss on investment		-			27,687
Changes in operating assets and liabilities:
Accounts receivable		56,181			-
Sales tax receivable		(4,504	)		25,278
Accounts payable		(16,596	)		(39,826	)
Payroll liabilities		4,273			14,452
Deferred Revenue		-			195,372
Due to related parties		(630,000	)		-
Inventory		(46,155	)		(58,371	)
Lease Liability		(328,134	)		1,812
Prepaid expenses		(8,246	)		(1,930	)
Security deposit		(2,775	)		-
Cash used in operating activities		(1,460,119	)		(180,276	)

Cash flows from investing activities
Purchase of equity method investment		-			(602,407	)
Cash used in investing activities		-			(602,407	)

Cash flows from financing activities
Proceeds from short term loan		(36,500	)		-
Proceeds from issuance of shares and warrants		1,092,500			1,555,671
Cash flow from financing activities		1,056,000			1,555,671

Effect of translation changes on cash		27,565			(5,452	)

Change in cash and cash equivalents		(376,555	)		767,536
Cash, beginning of period		2,675,400			206,820
Cash, end of period	$	2,298,845		$	974,356

Non cash operating activities
Loss on investment	$	-		$	27,687

Non cash investing and financing activities
Shares to be issued for Investment in Silviculture	$	-		$	375,000

Supplemental disclosures
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

The accompanying notes are an integral part of these financial statements

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KARBON-X CORP.

Notes to Consolidated Financial Statements

August 31, 2024

(Unaudited)

Note 1 - Basis of Presentation and Significant Accounting Policies

Karbon-X Corp. (“Karbon-X” or 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"), 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 20,000,000 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. 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.

Under 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.

Going concern

To date the Company has generated minimal revenues from its business operations and has incurred operating losses since inception of $(5,742,108). 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.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements present the consolidated balance sheets, statements of operations, stockholders' equity and cash flows of the Company. These consolidated financial statements are presented in the United States dollar and have been prepared in accordance with accounting principles generally accepted in the United States.

Use of Estimates and Assumptions

Preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Accordingly, actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

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.

In accordance 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.

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Sales Tax Receivable

Sales tax receivable consists of the accumulated reclaimable GST paid by the Company on purchases made in Canada.

Property and Equipment

Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets which are all five years.

Costs of major additions and improvements 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.

Inventory

As of March 1, 2024 it was management's decision to revalue inventory at the lower of cost or market. Net realizable value is estimated based on current selling prices, with provisions established for slow-moving and obsolete inventory. This change from the previous weighted average method to lower of cost or market had no significant impact on the current or prior consolidated financial statements.

Investments

The 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.

During November 2023, the Company has abandoned the silviculture investment deal and decided to write off the carrying value of the Equity Investment in Silviculture. Accordingly, amidst ongoing disputes which we are currently discussing, the Company has written off the carrying value of Investment of $2,564,203, accumulated value of shares to be issued $ 1,500,000 and recognized loss on write off $1,064,203 in its statement of operations for the year ended May 31, 2024.

Fair Value of Financial Instruments

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:

·	Level 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.

The carrying amount of the Company’s financial assets and liabilities approximate their fair values due to their short-term maturities.

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Revenue Recognition

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 acts as a principal in all revenue transactions. Additionally, the Company has a subscription-based model that is materially consistent with how revenue is recognized for the sales of carbon credits.

Foreign Currency Translation

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

For financial reporting 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.

Adjustments resulting from the translation, if any, are included in accumulated other comprehensive loss in stockholder’s equity (deficit).

Warrants

There is estimation uncertainty with respect to selecting inputs to the Black-Sholes model used to determine the fair value of a single outstanding warrant issuance. (Note 7). These inputs include the stock price of $0.25, exercise price of $0.75, time to maturity of two years, annual risk-free interest rate ranging from 4.33% - 4.74%, and annualized volatility ranging from 1294.9% - 1279.3%.

The above estimates and assumptions are reviewed regularly. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Significant Estimates

Significant estimates applied in the preparation of these financial statements include the estimated useful lives of property and equipment, share volatility and estimated life of options and warrants in determining their fair value as well as the expected potential for the realization of deferred tax assets in determining the amount of the valuation allowance thereto.

Earnings per Common Share

The basic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the 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 August 31, 2024, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per share.

Reclassifications

Certain amounts in the consolidated financial statements for the prior year have been reclassified to conform to the current year presentation. These reclassifications had no impact on net earnings, financial position, or cash flows.

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Note 2 – Prepaid Expenses

As of August 31, 2024 and May 31, 2024, prepaid expenses consisted of the following:

Description	August 31, 2024		May 31, 2024
Prepaid Travel	$	8,997	$	-
Prepaid furniture		-		-
Prepaid Advertising Expenses		-		-
Other prepaids		250		1,000
Total	$	9,247	$	1,000

Note 3 – Inventory

As of August 31, 2024 and May 31, 2024, inventory consisted of the following:

Description

August 31,

2024

May 31,

2024

Carbon Credit Inventory

362,892

316,738

Total

362,892

316,738

Carbon credit inventory represents carbon credits currently held for sale.

Note 4 - Property and Equipment

The amount of property and equipment as of August 31, 2024 and May 31, 2024, consisted of the following:

Description	August 31, 2024			May 31, 2024
Furniture and fixtures	$	6,663		$	6,589
Computer and equipment		3,737			3,695
Total property cost	$	10,399		$	10,284
Accumulated depreciation		(3,954	)		(3,366	)
Property and equipment, net	$	6,446		$	6,918

The Company did not make significant purchases during the three months ended August 31, 2024 or year ended May 31, 2024. Depreciation expense for the three months August 31, 2024 and 2023 was $542 and $556, respectively.

Note 5 – Shareholders’ Equity

During the three months ended August 31, 2024, Karbon-X Corp completed following private placement pursuant to Rule 506(c) of the Securities Exchange Act of 1934, as amended.

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 1,238,889 shares of common stock at $0.90 per share for gross proceeds of $1,114,999.

During the year ended May 31, 2024, Karbon-X Corp completed following private placement pursuant to Rule 506(c) of the Securities Exchange Act of 1934, as amended.

During July – September 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 3,274,858 shares of common stock at $0.50 per share for gross proceeds of $ 1,637,429, net of expenses related to issuances of $83,993.

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

During January 2024, the Company revalued the common stock from $2.00 per unit to $0.90 per unit for certain previous private placement investors and issued an additional 61,111 shares.

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Note 6 – Convertible Debt

On February 13, 2024, Karbon-X Corp. issued a convertible debt note to Tyler Skinner or their assigns. The note is for the principal amount of $150,000 and is convertible into common stock of the company at a conversion price of $0.90 per share. The note carries a one-time interest fee of $37,500, which will be converted into common stock at the same conversion price. Any unpaid principal on the note will accrue interest at a rate of eighteen percent (18%) per annum from the due date until paid. The note matures on the earlier of the company raising a minimum of $1,000,000 or one year from the issue date, subject to extension. The loan was converted into common stock, and the balance as of May 31, 2024, and August 31, 2024, was zero.

Note 7 – Warrants

A detail of warrant activity for the three months ended August 31, 2024 is as follows:

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	)		.75		-
Cancelled		-			-		-
Outstanding August 31, 2024		10,400		$	.50		0.88

Note 8 – Investments

On May 31, 2023, the Company executed an amended share exchange agreement to buy up to 80% of Silviculture Systems in exchange for cash and shares of Karbon-X Corp valued at $7,250,000. $3,250,000 paid for in shares and the remaining $3,500,000 paid for in cash over the next three years. The issuance of shares was originally intended to occur in tranches upon the completion of milestones. As of November 30, 2023, the Company had paid $999,783 in cash, had rights to a 32% ownership in Silviculture Systems and had a significant, but not controlling interest in Silviculture Systems. The shares related to the 32% ownership are shown have not been issued but are reflected in these financial statements as shares to be issued and were valued at the most recent stock purchase price, at the time of signing, of $0.25 per share. This investment was originally accounted for as an equity method investment and its respective gain/loss for the period has been recorded in the statement of operations.

During November 2023, the Company abandoned the silviculture investment deal and decided to write off the carrying value of the Equity Investment in Silviculture. Accordingly, amidst ongoing disputes which we are currently discussing, the Company has written off the carrying value of Investment of $2,564,203, accumulated value of shares to be issued $1,500,000 and recognized loss on write off $1,064,203 in its statement of operations for the three months ended November 30, 2023.

Note 9 – Capital Work in Progress (Internally Developed Software)

In accordance with ASC 350-40, the Company has capitalized internally developed software for its development of a mobile application. The software is currently in its application development stage and all related costs are being capitalized as incurred. Once the software is ready for implementation, the Company will begin amortizing the software over its estimated useful life. As of August 31, 2024 and May 31, 2024, the Company has capitalized internally developed software of $527,208 and $521,372, respectively.

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Note 10— Commitments and Contingencies

Operating Lease

In the first quarter of the fiscal year ended May 31, 2025, the Company was notified that the building in which our leased office space is located has been sold. As a result, our previous long-term lease agreement has transitioned to a month-to-month arrangement. The Company is continuing to occupy the space on these terms, and the Company is searching for a new lease. As of the reporting date, the Company has no future lease obligations beyond the current month-to-month arrangement. Lease expense is recognized on a monthly basis, and no material long-term lease obligations remain. Additionally, $10,891 was recognized as a gain on the termination of the previous lease during this period.

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.

Lease expense for operating leases generally consist of both 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 $8,875 and $6,583 for the three months ended August 31, 2024 and 2023, primarily related to operating lease costs paid to lessors from operating cash flows.

In January 2024, a former employee filed a lawsuit against the Company asserting wrongful termination. As of the date of this report, the lawsuit is ongoing. In review of the status with our external counsel, the Company believes there will be a positive outcome and no provision is recorded.

Note 11 – Subsequent Events

October 15, 2024 the company received proceeds of $250,000 related to a Convertible Promissory Note with a stated simple interest rate of 10% per annum and a conversion option to be exercised any time after the earlier of (i) twenty-four months from the date hereof or (ii) listing on OTCQX, Nasdaq or NYSE, at a conversion price of the lesser of (i) 80% of the twenty day weighted average closing price of the Company’s common stock as of the trading day immediately preceding such conversion, but not less than $0.50 per share.

Subsequent events have been evaluated through October 21, 2024, the date these financial statements were available to be released and note no other events requiring disclosure.

F-11

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

The following discussion relates to the historical operations and financial statements of Karbon-X Corp. ("Karbon-X" or the "Company") for the three months ending August 31, 2024 and 2023. This discussion should be read in conjunction with the Company’s most recent Annual Report on Form 10-K for the year ended May 31, 2024, 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 Annual 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 "Risks 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 Annual 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. 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 vs 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.

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 of all forms of payment, crypto, fiat or card.

NFT minting platform for carbon credits truly 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 NFT 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 l0-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 consequentially reports quarterly financials up to a consolidated quarterly submission.

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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.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates and Assumptions

Financial Condition and Results of Operations

To date the Company has just recently commenced to generate revenues from its business operations and has incurred operating losses since inception of $(5,742,108). 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.

Results of Operations

Unaudited Results for the Three Months Ended August 31, 2024 and 2023

Sales and Revenue

For the three-month period ended August 31, 2024 we had revenue of $127,429 compared to $3,758 for the three month period ended August 31, 2023. We are just at the beginning of our operations which we expect to improve during the current fiscal year. We anticipate increased revenues upon completion of our App as well as with projects with other potential partners.

Operating Expenses

Operating expenses for the three-month period ended August 31, 2024 totaled $825,684, compared to $325,474 for the three month period ended August 31, 2023. The increase was related to salary and wages, professional fees, and travel expenses.

Net loss from operations after income taxes was $804,765 during the three months ended August 31, 2024 compared to $350,032 for the three month period ended August 31, 2023.

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Results of Operations

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.

	Three Months Ended August 31, 2024			Three Months Ended August 31, 2023
Cash used in operating activities	$	(1,460,119	)		(180,276	)
Cash from financing activities	$	1,056,000			1,555,671
Cash used in investing activities	$	-			(602,407	)
Change in cash during the period	$	(376,555	)		767,536
Effect of exchange rate change	$	27,565			(5,452	)
Cash, beginning of period	$	2,675,400			206,820
Cash, end of period	$	2,298,845			974,356

As of August 31, 2024, the Company had $2,371,037 in current assets.

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

During the three months ended August 31, 2024, 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 1,238,889 shares of common stock at $0.90 per share for gross proceeds of $1,114,999.

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

During the year ended May 31, 2023, the Company executed an agreement to issue shares of Karbon-X Corp for the purchase of up to 80% of Silviculture Systems to be issued in tranches based on completion of milestones. As of August 31, 2023, the Company had agreed to purchase 32% of Silviculture Systems for 6,000,000 shares of Karbon-X Corp shown as shares to be issued for a value of $1,500,000. During November 2023, amidst ongoing disputes which we are currently discussing, the Company has chosen to abandon the silviculture investment deal and write off the carrying value of the Equity Investment in Silviculture. Accordingly, the Company has written of carrying value of Investment of $ 2,564,203, accumulated value of shares to be issued $ 1,500,000 and recognized loss on write off $ 1,064,203 in its statement of operations for the three months ended November 30, 2023.

Recent developments

During the three months ended August 31, 2024 the Company strengthened its executive leadership team with the appointment of two key hires. Christopher Mulgrew, a seasoned financial executive with over 24 years of experience, joined the Company as Chief Financial Officer (CFO). In this role, he 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.

Additionally, the Company appointed Sharon Standefer as Chief Revenue Officer (CRO). Sharon brings over 19 years of expertise in revenue growth, sales strategy, and business development. She will lead efforts to expand the Company’s revenue streams, optimize sales processes, and accelerate customer acquisition in alignment with the Company's long-term strategic objectives.

These appointments reflect our commitment to building a strong leadership team as we continue to execute on our strategic priorities and drive value for shareholders.

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 completion of 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 August 31, 2024 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.

Going Concern

To date the Company has only recently begun generating revenues from its business operations and has incurred operating losses since inception of $(5,742,108). 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.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

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 of 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 29, 2024. 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 August 31, 2024, 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 permits us to provide only management's report in this quarterly report.

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PART Il—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties other than the following:

As of the date of this report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. We are not aware of any other legal proceedings pending or that have been threatened against us or our properties.

From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.

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.

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 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: October 21, 2024	By:	/s/ Chad Clovis
		Chad Clovis
		Chief Executive Officer and Director {Principal and Executive Officer}


Date: October 21, 2024	By:	/s/ Chris Mulgrew
		Chris Mulgrew
		Chief Financial Officer
		(Principal Financial Officer Principal Accounting Officer)

nullnullnullnull

Cover - shares	3 Months Ended
Cover - shares	Aug. 31, 2024	Oct. 21, 2024
Cover [Abstract]
Entity Registrant Name	KARBON-X CORP.
Entity Central Index Key	0001729637
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--05-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Aug. 31, 2024
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2025
Entity Common Stock Shares Outstanding		83,463,640
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-56288
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	82-2882342
Entity Address Address Line 1	510 5th ST SW
Entity Address City Or Town	Calgary
Entity Address Country	CA
Entity Address Postal Zip Code	T2P 3S2
City Area Code	778
Local Phone Number	256-5730
Entity Interactive Data Current	Yes
Entity Address Address Line 2	Suite 910
Entity Address State Or Province	AB

Consolidated Balance Sheets - USD ($)	Aug. 31, 2024	May 31, 2024
Current assets
Cash and cash equivalents	$ 2,298,845	$ 2,675,400
Accounts receivable	56,893	113,074
Sales tax receivable	11,714	7,210
Prepaid expenses and other current assets	9,247	1,000
Total current assets	2,376,699	2,796,684
Property and equipment	6,446	6,918
Internally Developed Software	527,208	521,372
Inventory	362,892	316,738
Right of use asset	0	316,519
Security deposit	15,127	12,351
Total assets	3,288,372	3,970,582
Current liabilities
Accounts payable	123,996	127,219
Current portion of lease-liability	0	21,945
Short-term loan	0	36,500
Stock Payable	0	630,000
Payroll liabilities	15,004	24,103
Total Current Liabilities	139,000	839,769
Non-current portion of lease liability	0	302,557
Total Liabilities	139,000	1,142,325
Commitments and contingencies	0	0
Shareholders' equity (deficit)
Common stock $0.001 par value, 200,000,000 shares authorized, 83,463,640 and 82,174,750 shares issued and outstanding as of August 31, 2024 and May 31, 2024, respectively.	83,415	82,176
Additional Paid-in capital	8,767,087	7,675,826
Accumulated deficit	(5,742,108)	(4,937,342)
Accumulated other comprehensive gain (loss)	40,978	7,597
Total shareholders' equity (deficit)	3,149,372	2,828,257
Total liabilities and shareholders' equity (deficit)	$ 3,288,372	$ 3,970,582

Consolidated Balance Sheets (Parenthetical) - $ / shares	Aug. 31, 2024	May 31, 2024
STOCKHOLDERS DEFICIT
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	83,463,640	82,174,750
Common stock, shares outstanding	83,463,640	82,174,750

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Aug. 31, 2024	Aug. 31, 2023
Operations
Total revenue	$ 127,429	$ 3,758
Cost of revenue	94,098	549
Gross profit	33,331	3,209
Marketing expenses	12,351	21,395
Salaries and wages	533,594	172,887
Professional fees	145,273	78,291
Other operating expenses	134,466	52,901
Total operating expenses	825,684	325,474
Loss from Operations	(792,353)	(322,265)
Other income (expenses)
Other income (expenses)	(12,413)	(27,767)
Net loss before income tax	(804,766)	(350,032)
Federal income tax expense	0	0
Net loss before income tax	(804,766)	(350,032)
Other comprehensive loss
Foreign currency translation gain (loss)	33,381	(3,223)
Total comprehensive loss	$ (771,385)	$ (353,225)
Earnings Per Share
Weighted average shares outstanding (Basic and Diluted)	81,501,984	75,895,837
Basic and fully diluted loss per share	$ (0.01)	$ (0.00)

Consolidated Statements of Changes in Shareholders Equity (Unaudited) - USD ($)	Total	Common Stock	Stock to be issued	Additional Paid-In Capital	Accumulated Deficit	Accumulated other comprehensive gain (loss)
Balance, shares at May. 31, 2023		72,579,000
Balance, amount at May. 31, 2023	$ 2,265,219	$ 72,579	$ 1,750,000	$ 2,638,532	$ (2,192,106)	$ (3,786)
Shares to be issued for investment	375,000	$ 0	375,000	0	0	0
Shares to be issued as stock compensation, shares		2,500,000
Shares to be issued as stock compensation, amount	0	$ 2,500	(625,000)	622,500	0	0
Issuance of shares for cash and warrants, net, shares		3,274,858
Issuance of shares for cash and warrants, net, amount	1,555,671	$ 3,275	0	1,552,396	0	0
Conversion of loan to shares, shares		200,000
Conversion of loan to shares, amount	100,000	$ 200	0	99,800	0	0
Translation gain (loss)	(3,223)	0	0	0	0	(3,223)
Net loss	0	$ 0	0	0	(350,032)	0
Balance, shares at Aug. 31, 2023		78,553,858
Balance, amount at Aug. 31, 2023	3,942,635	$ 78,554	1,500,000	4,913,228	(2,542,138)	(7,009)
Balance, shares at May. 31, 2024		82,174,750
Balance, amount at May. 31, 2024	2,828,257	$ 82,176	0	7,675,826	(4,937,342)	7,597
Translation gain (loss)	33,381	0	0	0	0	33,381
Net loss	(804,766)	$ 0	0	0	(804,766)	0
Issuance of shares for cash, shares		1,288,890
Issuance of shares for cash, amount	1,092,500	$ 1,239	0	1,091,261	0	0
Balance, shares at Aug. 31, 2024		83,463,640
Balance, amount at Aug. 31, 2024	$ 3,149,372	$ 83,415	$ 0	$ 8,767,087	$ (5,742,108)	$ 40,978

Consolidated Statements of Cash Flow (Unaudited) - USD ($)	3 Months Ended
	Aug. 31, 2024	Aug. 31, 2023
Cash flows from operating activities
Net loss	$ (804,765)	$ (350,032)
Adjustments to reconcile net loss to net cash:
Depreciation expense	542	556
Amortization of ROU	320,061	4,727
Loss on investment	0	27,687
Changes in operating assets and liabilities:
Accounts receivable	56,181	0
Sales tax receivable	(4,504)	25,278
Accounts payable	(16,596)	(39,826)
Payroll liabilities	4,273	14,452
Deferred Revenue	0	195,372
Due to related parties	(630,000)	0
Inventory	(46,155)	(58,371)
Lease Liability	(328,134)	1,812
Prepaid expenses	(8,246)	(1,930)
Security deposit	(2,775)	0
Cash used in operating activities	(1,460,119)	(180,276)
Cash flows from investing activities
Purchase of equity method investment	0	(602,407)
Cash used in investing activities	0	(602,407)
Cash flows from financing activities
Proceeds from short term loan	(36,500)	0
Proceeds from issuance of shares and warrants	1,092,500	1,555,671
Cash flow from financing activities	1,056,000	1,555,671
Effect of translation changes on cash	27,565	(5,452)
Change in cash and cash equivalents	(376,555)	767,536
Cash, beginning of period	2,675,400	206,820
Cash, end of period	2,298,845	974,356
Non cash operating activities
Loss on investment	0	27,687
Non cash investing and financing activities
Shares to be issued for Investment in Silviculture	0	375,000
Supplemental disclosures
Cash paid for interest	0	0
Cash paid for income taxes	$ 0	$ 0

Basis of Presentation and Significant Accounting Policies

3 Months Ended

Aug. 31, 2024

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Note 1 - Basis of Presentation and Significant Accounting Policies

Karbon-X Corp. (“Karbon-X” or 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.

Going concern

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates and Assumptions

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

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.

Sales Tax Receivable

Sales tax receivable consists of the accumulated reclaimable GST paid by the Company on purchases made in Canada.

Property and Equipment

Inventory

Investments

Fair Value of Financial Instruments

·	Level 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.

The carrying amount of the Company’s financial assets and liabilities approximate their fair values due to their short-term maturities.

Revenue Recognition

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.

Foreign Currency Translation

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

Adjustments resulting from the translation, if any, are included in accumulated other comprehensive loss in stockholder’s equity (deficit).

Warrants

The above estimates and assumptions are reviewed regularly. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Significant Estimates

Earnings per Common Share

Reclassifications

Prepaid Expenses

3 Months Ended

Aug. 31, 2024

Prepaid Expenses

Prepaid Expenses

Note 2 – Prepaid Expenses

As of August 31, 2024 and May 31, 2024, prepaid expenses consisted of the following:

Description	August 31, 2024		May 31, 2024
Prepaid Travel	$	8,997	$	-
Prepaid furniture		-		-
Prepaid Advertising Expenses		-		-
Other prepaids		250		1,000
Total	$	9,247	$	1,000

Inventory

3 Months Ended

Aug. 31, 2024

Inventory

Inventory

Note 3 – Inventory

As of August 31, 2024 and May 31, 2024, inventory consisted of the following:

Description

August 31,

2024

May 31,

2024

Carbon Credit Inventory

362,892

316,738

Total

362,892

316,738

Carbon credit inventory represents carbon credits currently held for sale.

Property and Equipment

3 Months Ended

Aug. 31, 2024

Property and Equipment

Property and Equipment

Note 4 - Property and Equipment

The amount of property and equipment as of August 31, 2024 and May 31, 2024, consisted of the following:

Description	August 31, 2024			May 31, 2024
Furniture and fixtures	$	6,663		$	6,589
Computer and equipment		3,737			3,695
Total property cost	$	10,399		$	10,284
Accumulated depreciation		(3,954	)		(3,366	)
Property and equipment, net	$	6,446		$	6,918

Shareholders Equity

3 Months Ended

Aug. 31, 2024

Shareholders Equity

Shareholders' Equity

Note 5 – Shareholders’ Equity

During the three months ended August 31, 2024, Karbon-X Corp completed following private placement pursuant to Rule 506(c) of the Securities Exchange Act of 1934, as amended.

During the year ended May 31, 2024, Karbon-X Corp completed following private placement pursuant to Rule 506(c) of the Securities Exchange Act of 1934, as amended.

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

During January 2024, the Company revalued the common stock from $2.00 per unit to $0.90 per unit for certain previous private placement investors and issued an additional 61,111 shares.

Convertible Debt

3 Months Ended

Aug. 31, 2024

Convertible Debt

Convertible Debt

Note 6 – Convertible Debt

Warrants

3 Months Ended

Aug. 31, 2024

Warrants

Warrants

Note 7 – Warrants

A detail of warrant activity for the three months ended August 31, 2024 is as follows:

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	)		.75		-
Cancelled		-			-		-
Outstanding August 31, 2024		10,400		$	.50		0.88

Investments

3 Months Ended

Aug. 31, 2024

Investments

Investments

Note 8 – Investments

Capital Work in Progress (Internally Developed Software)

3 Months Ended

Aug. 31, 2024

Capital Work in Progress (Internally Developed Software)

Capital Work in Progress (Internally Developed Software)

Note 9 – Capital Work in Progress (Internally Developed Software)

Commitments and Contingencies

3 Months Ended

Aug. 31, 2024

Commitments and Contingencies

Commitments and Contingencies

Note 10— Commitments and Contingencies

Operating Lease

Subsequent Events

3 Months Ended

Aug. 31, 2024

Subsequent Events

Subsequent Events

Note 11 – Subsequent Events

Subsequent events have been evaluated through October 21, 2024, the date these financial statements were available to be released and note no other events requiring disclosure.

Basis of Presentation and Significant Accounting Policies (Policies)

3 Months Ended

Aug. 31, 2024

Basis of Presentation and Significant Accounting Policies

Going Concern

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates and Assumptions

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

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.

Sales Tax Receivable

Sales tax receivable consists of the accumulated reclaimable GST paid by the Company on purchases made in Canada.

Property and Equipment

Inventory

Investments

Fair Value of Financial Instruments

·	Level 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.

The carrying amount of the Company’s financial assets and liabilities approximate their fair values due to their short-term maturities.

Revenue Recognition

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.

Foreign Currency Translation

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

Adjustments resulting from the translation, if any, are included in accumulated other comprehensive loss in stockholder’s equity (deficit).

Warrants

The above estimates and assumptions are reviewed regularly. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Significant Estimates

Earnings per Common Share

Reclassifications

Prepaid Expenses (Table)

3 Months Ended

Aug. 31, 2024

Prepaid Expenses

Schedule of Prepaid Expenses

Description	August 31, 2024		May 31, 2024
Prepaid Travel	$	8,997	$	-
Prepaid furniture		-		-
Prepaid Advertising Expenses		-		-
Other prepaids		250		1,000
Total	$	9,247	$	1,000

Inventory (Table)

3 Months Ended

Aug. 31, 2024

Inventory

Schedule of Inventory

Description

August 31,

2024

May 31,

2024

Carbon Credit Inventory

362,892

316,738

Total

362,892

316,738

Property and Equipment (Table)

3 Months Ended

Aug. 31, 2024

Property and Equipment

Schedule of Property and Equipment

Description	August 31, 2024			May 31, 2024
Furniture and fixtures	$	6,663		$	6,589
Computer and equipment		3,737			3,695
Total property cost	$	10,399		$	10,284
Accumulated depreciation		(3,954	)		(3,366	)
Property and equipment, net	$	6,446		$	6,918

Warrants (Table)

3 Months Ended

Aug. 31, 2024

Warrants

Schedule of Warrants

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	)		.75		-
Cancelled		-			-		-
Outstanding August 31, 2024		10,400		$	.50		0.88

Basis of Presentation and Significant Accounting Policies (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Feb. 21, 2022	Aug. 31, 2024	Nov. 30, 2023	May 31, 2024
Common stock shares converted, exchange ratio	20,000-for-1
Common stock, shares authorized	20,000,000	200,000,000		200,000,000
Stock price		$ 0.25
Exercise price		$ 0.75
Accumulated deficit		$ (5,742,108)		$ (4,937,342)
Warrant [Member]
Maturity of warrants		time to maturity of two years
Minimum [Member]
Ownership percentage		20.00%
Minimum [Member] \| Warrant [Member]
Risk-free interest rate		4.33%
Volatility rate		1294.90%
Maximum [Member]
Ownership percentage		50.00%
Maximum [Member] \| Warrant [Member]
Risk-free interest rate		4.74%
Volatility rate		1279.30%
Cocoluv, Inc. [Member]
Cash and cash equivalents		$ 134
Due to related party		$ 99,902
Joint Venture [Member]
Carrying value of Investment			$ 2,564,203	2,564,203
Accumulated value of shares to be issued			1,500,000	1,500,000
Recognized loss on investment			$ 1,064,203	$ 1,064,203

Prepaid Expenses (Details) - USD ($)	Aug. 31, 2024	May 31, 2024
Prepaid Expenses
Prepaid Travel	$ 8,997	$ 0
Prepaid furniture	0	0
Prepaid Advertising Expenses	0	0
Other prepaids	250	1,000
Total	$ 9,247	$ 1,000

Inventory (Details) - USD ($)	Aug. 31, 2024	May 31, 2024
Inventory
Carbon Credit Inventory	$ 362,892	$ 316,738
Total Inventory	$ 362,892	$ 316,738

Property and Equipment (Details) - USD ($)	Aug. 31, 2024	May 31, 2024
Property and Equipment
Furniture and fixtures	$ 6,663	$ 6,589
Computer and equipment	3,737	3,695
Total property cost	10,399	10,284
Accumulated depreciation	(3,954)	(3,366)
Property and equipment, net	$ 6,446	$ 6,918

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended
Property and Equipment (Details Narrative) - USD ($)	Aug. 31, 2024	Aug. 31, 2023
Property and Equipment
Depreciation expense	$ 542	$ 556

Shareholders Equity (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended
Shareholders Equity (Details Narrative) - USD ($)	Jun. 06, 2023	Jan. 31, 2024	Aug. 31, 2024	Sep. 30, 2023
Price per share			$ 0.25
Converted loan	$ 100,000
Loan converted into shares	200,000
Conversion of loan, per shares	$ 0.50
private placement investors [Member]
Additional Shares, Issued		61,111
Revalue of common stock per unit		common stock from $2.00 per unit to $0.90 per unit for certain previous private placement investors
Private Placement One [Member]
Price per share			$ 0.90	$ 0.50
Additional Shares, Issued			1,238,889	3,274,858
Proceeds from shares sold			$ 1,114,999	$ 1,637,429
Net of expenses related to issuances				$ 83,993

Convertible Debt (Details Narrative) - Tyler Skinner [Member]	Feb. 13, 2024 USD ($) $ / shares
Interest rate	18.00%
Principal amount	$ 150,000
Conversion price per share \| $ / shares	$ 0.90
Interest fee	$ 37,500
Minimum [Member]
Fund raising	$ 1,000,000

Warrants (Details)	3 Months Ended
Warrants (Details)	Aug. 31, 2024 $ / shares shares
Warrants
Outstanding, beginning balance \| shares	330,400
Expired \| shares	(320,000)
Outstanding, ending balance \| shares	10,400
Weighted average exercise price, beginning balance	$ 0.63
Weighted average exercise price, Exercised	0
Weighted average exercise price, Granted	0
Weighted average exercise price, expired	0.75
Weighted average exercise price, Cancelled	0
Weighted average exercise price, ending balance	$ 0.50
Weighted average remaining contractual life (in years), beginning balance	7 months 17 days
Weighted average remaining contractual life (in years), ending balance	10 months 17 days

Investments (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
Investments (Details Narrative) - USD ($)	Nov. 30, 2023	May 31, 2024	May 31, 2023
Share executed exchange of share			80.00%
Share executed exchange of share amount value			$ 7,250,000
Silviculture System [Member]
Stock purchase price per share	$ 0.25
Cash	$ 999,783
Owenship	32.00%
Joint Venture [Member]
Recognized loss on investment	$ 1,064,203	$ 1,064,203
Share exchange agreement			$3,250,000 paid for in shares and the remaining $3,500,000 paid for in cash over the next three years
Carrying value of Investment	2,564,203	2,564,203
Accumulated value of shares to be issued	$ 1,500,000	$ 1,500,000

Capital Work in Progress (Internally Developed Software) (Details Narrative) - USD ($)	Aug. 31, 2024	May 31, 2024
Capital Work in Progress (Internally Developed Software)
Software development cost	$ 527,208	$ 521,372

Commitments and Contingencies (Details Narrative) - USD ($)	3 Months Ended
	Aug. 31, 2024	Aug. 31, 2023
Commitments and Contingencies
Total lease expense	$ 8,875	$ 6,583
Gain on termination of previous lease	$ 10,891

Subsequent Events (Details Narrative) - Subsequent Event [Member]	Oct. 15, 2024 USD ($)
Convertible Promissory Note	$ 250,000
Conversion price of lesser Description	(i) 80% of the twenty day weighted average closing price of the Company’s common stock as of the trading day immediately preceding such conversion, but not less than $0.50 per share
Interest rate	10.00%

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