Financial Analysis

14. CONTINGENCIES In fiscal 2021, the Company initiated arbitration against a former distributor asserting a breach of the distribution agreement and seeking damages. The liability arbitration hearing was held in December 2022. In February 2023, the arbitrator issued its decision and ruled in favor of the Company on the majority of its claims. In September 2023, the Company settled the arbitration for a cash payment of $ 2,450,000 which was received by the Company in October 2023.

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9. RESTRICTED SHARE PLAN The Company has a Restricted Share Plan (the Plan) as approved by stockholders on February 21, 2025. The Plan allows the Company to grant, from time to time, restricted shares as compensation to directors, officers, employees and consultants of the Company. The Restricted Shares are subject to restrictions, including the period under which the shares will be restricted (the Restricted Period) and subject to forfeiture which is determined by the Board at the time of the grant. The recipient of Restricted Shares is entitled to all of the rights of a shareholder, including the right to vote such shares and the right to receive any dividends, except that the shares granted under the Plan are nontransferable during the Restricted Period. The maximum number of Common Shares reserved for issuance under the Plan will not exceed 1% of the issued and outstanding number of Common Shares at the time of adoption or amendment of the Plan. As of August 31, 2025 the maximum number of shares available to be issued under the Plan was 35,181 . The Board of Directors has set the compensation for non-executive Directors under the Plan at 25 common shares for each quarter of service. The cumulative amount of shares earned each fiscal year to be granted shortly after the close of that fiscal year. Non-executive Directors also received a one-time initial grant of 225 common shares which were issued in December 2020. During the year ended August 31, 2024, 5,903 common shares …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

6. INCOME TAXES A reconciliation of the provision for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows: Schedule of provision for income taxes 2025 2024 Computed tax at the federal statutory rate $ 53,026 $ 92,555 State taxes, net of federal benefit 30,000 10,000 Other 3,140 669 Provision for income taxes $ 86,166 $ 103,224 Current income taxes $ 86,166 $ 103,224 Deferred income taxes 157,903 (21,154 ) Income tax expense benefit net $ 244,069 $ 82,070 Deferred income tax asset as of August 31, 2025 of $ 3 (August 31, 2024 $ 341,029 ) reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Schedule of deferred income tax asset and liabilities 2025 2024 Deferred tax assets: Allowance for inventory $ 1,373,812 $ 443,913 Allowance for bad debts Difference between book and tax depreciation (76,399 ) (13,587 ) Total deferred tax assets 1,297,413 430,326 Valuation allowance (1,210,164 ) Net deferred tax assets 87,249 430,326 Net deferred tax liability (87,246 ) (89,297 ) Combined net deferred tax asset (liability) $ 3 $ 341,029 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements The Company has evaluated all recently issued, but not yet effective, accounting pronouncements and determined that it does not believe that any, if currently adopted, would have a material effect on the Companys financial statements. …

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10. PENSION AND PROFIT-SHARING PLANS The Company has a deferred compensation 401(k) plan for all employees with at least 6 months of service pending a monthly enrollment time. The plan allows for a non-elective discretionary contribution plus matching employee contributions up to a specific limit. The percentages of contribution remain the discretion of the Board and are reviewed with management annually. For the years ended August 31, 2025 and 2024 the 401(k) compensation expense was $ 230,595 and $ 117,319 , respectively.

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11. SEGMENT INFORMATION The Company has three principal reportable segments. These reportable segments were determined based on the nature of the products offered. Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company evaluates performance based on several factors, of which the primary financial measure is business segment income before taxes. The following tables show the operations of the Company's reportable segments. Following is a summary of segmented information for the years ended August 31: Schedule of segmented information 2025 2024 Sales to unaffiliated customers: Industrial wood products $ 3,802,791 $ 3,728,165 Pet, Fencing and Other 37,495,349 43,330,737 Seed processing and sales 86,274 $ 41,298,140 $ 47,145,176 (Loss) income before income taxes: Industrial wood products $ (8,857 ) $ 19,563 Pet, Fencing and Other (4,242,719 ) (146,375 ) Seed processing and sales 36,310 Corporate and administrative 365,552 894,325 $ (3,886,024 ) $ 803,823 Identifiable assets: Industrial wood products $ 1,164,274 $ 1,069,821 Pet, Fencing and Other 18,563,411 16,286,616 Seed processing and sales 4,633 Corporate and administrative 5,748,913 10,129,444 $ 25,476,598 $ 27,490,514 Depreciation and amortization: Industrial wood products $ $ Pet, Fencing and Other 85,726 73,610 Seed …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America (GAAP) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). Certain comparatives have been reclassified to conform with the current period presentation. Basis of consolidation These consolidated financial statements include the accounts of the Company and its current wholly owned subsidiaries, JC USA, JCC, JCSC, and Greenwood, all of which are incorporated under the laws of Oregon, U.S.A. All inter-company balances and transactions have been eliminated upon consolidation. Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the 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 reporting period. Significant estimates incorporated into the Companys consolidated financial statements include the estimated useful lives for depreciable and amortizable assets, the estimated allowances for doubtful accounts receivable and inventory obsolescence, possible product liability and possible product returns, and litigation cont …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

8. CAPITAL STOCK Common stock Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company's ability to pay dividends on its common stock. The Company has not declared any dividends since incorporation.

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15. SUBSEQUENT EVENT a) In October 2025, we experienced a cybersecurity incident. We learned that a threat actor had gained unauthorized access to portions of the Companys information technology (IT) environment. We immediately activated our cyber incident response process to contain the intrusion, assess and investigate the incident and implement remedial measures, including retaining external cybersecurity experts and notifying law enforcement, including the Federal Bureau of Investigation. Based on the investigation to date, we believe the cybersecurity incident consisted of unauthorized access and deployment of encryption and monitoring software by a third party to a portion of the Companys internal corporate IT systems. The incident caused disruptions and limitation of access to portions of our business applications. We believe the unauthorized activity was contained and our IT systems and individual computer devices were brought back online. As a result of the intrusion, we have taken additional cybersecurity measures. We believe that the costs associated with these activities will not be material and that the costs related to the services provided by experts and the disruption to our business will be largely covered by the Companys insurance policies. However, there can be no assurance that the insurance carriers will accept liability for these costs, in which these additional costs may have a material adverse effect on our future financial performance. b) The Company …

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7. BANK INDEBTEDNESS The Company has a line of credit agreement in the form of a Contract of Sale & Assignment Agreement (the Agreement) with Northrim Funding Services (Northrim). Under the terms of the agreement, Northrim will provide short-term operating capital by either purchasing the Companys accounts receivable invoices (AR invoices) or as a loan against the Companys inventory position. Under the original agreement, the maximum amount of AR invoices Northrim would purchase at one time was limited to an amount equal to 80% of the net eligible accounts but was not to exceed $6,000,000. Borrowing against the Companys inventory was computed as an amount equal to 25% of all eligible inventory but was not to exceed $4,000,000. The maximum total draw the Company could borrow under the line was $6,000,000. Interest is computed at the prime rate plus 4.75% with floor of 11% and was secured by certain assets of the Company. In December 2025, the Company and its lender Northrim agreed to modify the Companys line of credit agreement. Under the revised agreement: Funding limits have been increased from a maximum of $6,000,000 to a maximum of $8,000,000 ; Funding of accounts receivable is based on 90% of eligible AR invoices, an increase from 80% of eligible AR invoices ; and Borrowings against eligible inventory (as defined in the agreements) have been increased from 25% to 50%, with a maximum borrowing limit increased from $ 4,000,000 to $ 6,500,000 . Amounts provided by Northr …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

9. RESTRICTED SHARE PLAN The Company has a Restricted Share Plan (the Plan) as approved by shareholders on February 21, 2025. The Plan allows the Company to grant, from time to time, restricted shares as compensation to directors, officers, employees and consultants of the Company. The Restricted Shares are subject to restrictions, including the period under which the shares will be restricted (the Restricted Period) and subject to forfeiture which is determined by the Board at the time of the grant. The recipient of Restricted Shares is entitled to all of the rights of a shareholder, including the right to vote such shares and the right to receive any dividends, except that the shares granted under the Plan are nontransferable during the Restricted Period. The maximum number of Common Shares reserved for issuance under the Plan will not exceed 1% of the issued and outstanding number of Common Shares at the time of adoption or amendment of the Plan. As of May 31, 2026 the maximum number of shares available to be issued under the Plan was 31,399 . The Board of Directors has set the compensation for non-executive Directors under the Plan at 25 common shares for each quarter of service. The cumulative amount of shares earned each fiscal year to be granted shortly after the close of that fiscal year. Non-executive Directors also received a one-time initial grant of 225 common shares which were issued in December 2020. During the year ended August 31, 2025, 13,317 common shares we …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

6. DEFERRED INCOME TAXES Deferred income tax asset as of May 31, 2026 of $ 0 Nil (August 31, 2025 - $ 3 ) reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Recent Accounting Pronouncements The Company has evaluated all recently issued, but not yet effective, accounting pronouncements and determined that it does not believe that any, if currently adopted, would have a material effect on the Companys financial statements. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

10. PENSION AND PROFIT-SHARING PLANS The Company has a deferred compensation 401(k) plan for all employees with at least 6 months of service pending a monthly enrollment period. The plan allows for a non-elective discretionary contribution plus matching employee contributions up to a specific limit. The percentages of contribution remain the discretion of the Board and are reviewed with management annually. For the nine-month periods ended May 31, 2026 and 2025 the 401(k) compensation expenses were $ 148,266 and $ 186,114 , respectively.

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11. SEGMENT INFORMATION The Company has three principal reportable segments. These reportable segments were determined based on the nature of the products offered. Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company evaluates performance based on several factors, of which the primary financial measure is business segment income before taxes. The following tables show the operations of the Company's reportable segments. Following is a summary of segmented information for the nine-month periods ended May 31, 2026 and 2025. Schedule of segmented information 2026 2025 Sales to unaffiliated customers: Industrial wood products $ 3,790,759 $ 2,658,723 Pet, fencing and other 25,252,256 28,268,572 $ 29,043,015 $ 30,927,295 Income (loss) before income taxes: Industrial wood products $ 426,208 $ (68,148 ) Pet, fencing and other (5,142,332 ) (2,615,470 ) Corporate and administration (1,290,160 ) 325,258 $ (6,006,284 ) $ (2,358,360 ) Identifiable Assets: Industrial wood products $ 1,252,215 $ 1,036,755 Pet, fencing and other 11,460,783 20,745,342 Corporate and administration 5,692,630 7,456,789 $ 18,405,628 $ 29,238,886 Depreciation and amortization: Industrial wood products $ $ Pet, fencing and other 69,127 62,711 Corporate and administration 131,126 179,592 $ 200,253 $ 242,303 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation These unaudited consolidated interim financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America (US GAAP) for interim financial information and the rules and regulations of the Securities and Exchange Commission (SEC""). Principles of consolidation These consolidated financial statements include the accounts of the Company and its current wholly owned subsidiaries, JC USA, JCC, and Greenwood, all of which are incorporated under the laws of Oregon, U.S.A. All inter-company balances and transactions have been eliminated upon consolidation. Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the 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 reporting period. Significant estimates incorporated into the Companys consolidated financial statements include the estimated useful lives for depreciable and amortizable assets, the estimated allowances for doubtful accounts receivable and inventory obsolescence, possible product liability and possible product returns, and litigation contingencies and claims. Actual results could differ from those e …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

8. CAPITAL STOCK Common Stock Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company's ability to pay dividends on its common stock. The Company has not declared any dividends since incorporation.

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15. SUBSEQUENT EVENTS a) In June 2026, the Company and its lender Northrim agreed to modify and renew the Companys line of credit agreement. Under the revised agreement: Funding limits have been changed to a maximum of $6,000,000 from the prior $8,000,000 ; Funding of accounts receivable is based on 85% of eligible AR invoices, a decrease from 90% of eligible AR invoices, but an increase from the 80% in the original agreement ; and The maximum borrowing limit against eligible inventory (as defined in the agreements) have been decreased to $ 3,000,000 from $ 6,500,000 . If the Company is successful in selling the former Seed property, the agreement will no longer revert back to the lower advance rates. The remainder of the terms of the agreement, including the computation of the interest rate, remains unchanged, and the revised line expires on June 30, 2027. b) In June 2026, we received approval and payment for our outstanding tariff refund claims and interest totaling $ 1,008,810 . Of the amount received, $ 286,274 was recorded as a receivable during Q3 2026. Of the other $722,536 received, $601,396 is the remaining accepted IEEPA related claims, $80,092 are post-summary corrections unrelated to the invalided IEEPA claims, and $41,048 is interest, which will be recognized in the quarter received. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing