Karbon-X 10-K: Going Concern, Material Weakness, and 86% Customer Concentration
KARX sits 38% above its 52-week low of $0.13.
Summary
Karbon-X's 10-K discloses going concern doubt, a material weakness, and extreme customer concentration. Revenue surged but margins collapsed, and convertible notes could dilute shareholders by over 25%.
Key Events · Earnings and Guidance · KARX
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Going Concern Warning
Auditors and management raise substantial doubt about Karbon-X's ability to continue. Negative working capital of $(4,040,004) and stockholders' deficit of $(5,984,102) at May 31, 2026.
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Material Weakness in Controls
Internal control over financial reporting was ineffective due to insufficient accounting resources during rapid expansion. Remediation in progress but not complete.
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86% Customer Concentration
One customer accounted for 86% of revenue ($47.9M) and has not paid EUR 3.8M of invoiced amounts. The company derecognized the receivable and issued a written demand for payment.
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Convertible Note Dilution Risk
Notes outstanding at May 31, 2026 are convertible at 75-85% of VWAP with floor prices as low as $0.05. Estimated 23.9M shares issuable — over 25% of current shares outstanding.
Analysis · KARX · Industrial Applications And Services
The annual report raises substantial doubt about Karbon-X's ability to continue as a going concern, citing negative working capital of $(4,040,004) and a stockholders' deficit of $(5,984,102). Revenue exploded to $55.86M, but gross margin collapsed to 1.5%, and 86% of revenue came from a single customer that has not paid EUR 3.8M of invoices. The company also disclosed a material weakness in internal controls and convertible notes with floating conversion prices that could issue an estimated 23.9M shares — a massive dilution risk for a stock trading at $0.18.
How filings like this one have moved
In the 30 days to Sep 17, 2026, 40.7% of the 383 measured filings Wiseek scored 9 moved their stock by 5% or more by the next session's close. The median move was -0.55%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, KARX was trading at $0.18 on OTC in the Industrial Applications And Services sector, with a market capitalization of approximately $17.3M. The 52-week trading range was $0.13 to $2.50. This filing was assessed with negative market sentiment and an importance score of 9 out of 10.