Starfighters Space, Inc.

STARFIGHTERS SPACE, INC.NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND GOING CONCERN

a) Nature of operations

Starfighters Space Inc. ("SFS" or the "Company") was incorporated on September 6, 2022, under the laws of the State of Delaware. The Company's registered office is held at 850 New Burton Road, Suite 201, Dover, DE 19904. The Company's principal operating facility is located at the NASA Kennedy Space Center in Cape Canaveral, Florida, with an additional base of operations at Midland International Air & Space Port in Texas. The Company has a fleet of seven F-104 Fighter jets that are capable of flying MACH 2+. The Company is currently in the process of gaining a launch waiver and license for its first space launch to launch rockets carrying payloads for data testing from its jets into suborbital space.

b) Going concern

These unaudited condensed consolidated interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has historically operated at a loss and had negative cash flows from operations, and access to certain bank accounts is restricted due to ongoing dispute and litigation.

These factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the date of the unaudited condensed consolidated interim financial statements being issued. The ability of the Company to continue as a going concern is dependent upon the Company's ability to raise additional funds and implement its business plan. These unaudited condensed consolidated interim financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Such adjustments could be material.

The continuation of the Company as a going concern is dependent upon its ability to obtain necessary debt or equity financing to continue operations until it begins generating positive cash flow. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.

2. BASIS OF PRESENTATION

a) Basis of presentation and principles of consolidation

The unaudited condensed consolidated interim financial statements are presented in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and in accordance with the instructions to Article 8-03 of Regulation S-X, and should be read in conjunction with the Company's Annual Report on Form 10-K/A for the year ended December 31, 2025. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. The financial statements include the accounts of the Company, and all entities in which the Company has a controlling financial interest, including wholly-owned subsidiaries. In the opinion of management, the unaudited condensed consolidated interim financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The interim results for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future periods. All significant intercompany balances and transactions have been eliminated in consolidation.

b) Use of estimates and judgments

The preparation of these unaudited condensed consolidated interim financial statements in conformity with U.S. GAAP requires the Company's management to make judgments, estimates and assumptions about future events that impact the amounts reported in the unaudited condensed consolidated interim financial statements. Actual results may differ from these estimates. Significant items subject to such estimates include the useful lives of the Company's long-lived assets, the valuation of stock-based compensation, deferred tax assets and liabilities, income tax uncertainties, and other contingencies.

3. SIGNIFICANT ACCOUNTING POLICIES

a) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held with banks, and when applicable, short-term, highly liquid deposits which are either cashable or with original maturities of less than three months. There are no cash equivalents as of June 30, 2026 or December 31, 2025. At times, the Company's cash balance exceeds the federally insured limits.

b) Restricted cash

Restricted cash include: (i) deposits held with banks that are held as collateral for the corporate credit cards of the Company, with balances of $50,842 and $50,592 as of June 30, 2026 and December 31, 2025, respectively; and (ii) balances of $895,876 held with banks that are frozen or otherwise restricted due to ongoing disputes with the former CEO of the Company, as further discussed in Note 11.

c) Investments

The Company's short-term investments are treasury notes with original maturities greater than 3 months and less than one year.

The following table summarizes the Company's investment securities as of June 30, 2026 and December 31, 2025. All of the Company's investments mature within the next 12 months.

Certificates of deposits are presented as restricted investments on the unaudited condensed consolidated interim balance sheet as of June 30, 2026 despite having maturities within the next 12 months, as such accounts are frozen or otherwise restricted due to ongoing disputes with the former CEO of the Company, as further discussed in Note 11.

The short-term investments are level 1 investments in the fair value hierarchy. These securities are presented on the unaudited condensed consolidated interim balance sheets at fair value. Earnings from these securities are included in interest income on the unaudited condensed consolidated interim statements of operations. At times, the Company's short-term investment balance exceeds the federally insured limits for brokerages.

d) Reclassification

Certain balances in the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2025 have been reclassified to conform to the presentation in the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2026. In the prior year, the Company separately disclosed contract labour and fuel, repairs and maintenance, vehicle expense, rent expense, advertising and promotion, bank charges, business development, consulting fees, director fees, franchise tax, insurance, licenses, listing fees, management fees, office and administrative, professional fees, and travel and entertainment, and in the current year the Company has reclassified these costs on the unaudited condensed consolidated statement of operations within selling, general and administrative. The Company also previously separately disclosed grant income, and foreign exchange gain or loss, and in the current year the Company has reclassified these costs on the unaudited condensed consolidated statement of operations within other. The Company also disaggregated interest income to separately present realized and unrealized gain on short-term investments. These reclassifications had no effect on the Company’s previously reported results of operations, changes in stockholders’ equity, or cash flows.

4. PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following:

The Company owns six F-104 aircrafts that were acquired through a common control transaction in 2022, which had zero carrying value at the time of acquisition from the transferring entity, and was carried at $0 upon recognition under ASC 805-50-30-5. The Company owns a seventh F-104 aircraft that was acquired in 2022 at no consideration. Accordingly, the Company reports zero carrying value on the F-104 aircrafts. The Company has full ownership and control over the aircrafts through Starfighters International, Inc., a Florida subsidiary of the Company ("SFII"). The ownership rights and control over the aircrafts are not impacted by the recent resignation of the former Chief Executive Officer of the Company (Note 11).

5. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

6. STOCKHOLDERS' EQUITY

a) Common stock

The Company has 200,000,000 shares authorized with a par value of $0.00001 per share. Common Stock are voting and are entitled to dividends as declared at the discretion of the Board of Directors.

On May 27, 2026, the Company issued 5,223,879 Common Shares at a price of $3.35 per share, in relation to a Private Investment in Public Equity ("PIPE") financing for gross proceeds of $17,499,995. The Company paid share issuance costs of $1,267,000 in cash, and incurred a further $93,015 in accounts payable and accrued liabilities, in connection with the PIPE financing.

b) Warrants

A summary of Common Stock warrant activity during the six months ended June 30, 2026 is as follows:

c) Options

A summary of Common Stock option activity during the six months ended June 30, 2026 is as follows:

On June 25, 2026, the Company granted 270,000 stock options with exercise price of $4.18 per share, and expiry date on June 25, 2031. The stock options have a vesting cadence of 25% upon 12 months from the date of grant, and the remainder vesting in equal monthly amounts over the next 24 months from the vesting of the initial 25%.

During the six months ended June 30, 2026, the Company recognized negative stock compensation of ($99,524) in connection with the stock options. On February 19, 2026,1,390,000 options were forfeited upon the resignation of the former CEO, the former corporate secretary and spouse of the former CEO, and two immediate family members of the former CEO. The Company reversed $1,081,160 in stock compensation expense related to these forfeitures during the six months ended June 30, 2026. Future unrecognized stock-based compensation expense arising from the options amount to $658,971, which will be recognized over the next 2.99 years.

During the three months ended June 30, 2026, the Company recognized stock compensation expense of $454,238 within selling, general and administrative expenses.

During the six months ended June 30, 2026, the Company recognized stock compensation expense of ($99,524) within selling, general and administrative expenses.

The Company valued stock options using the Black-Scholes model. Based on the below inputs, the Company determined that the options had a fair value of $661,991 upon issuance during the three and six months ended June 30, 2026.

d) Restricted share units ("RSUs")

A summary of RSU activity during the six months ended June 30, 2026 is as follows:

On June 25, 2026, the Company granted 375,000 RSUs with grant date fair value of $4.38 per share. The RSUs have a vesting cadence of one-third upon grant, and the remainder vesting in equal annual tranches over the two anniversaries from the grant date.

The Company recognized $2,213,740 in stock-based compensation related to the RSUs vested during the three months ended June 30, 2026, recognized within selling, general and administrative expenses.

The Company recognized $4,564,276 in stock-based compensation related to the RSUs vested during the six months ended June 30, 2026, recognized within selling, general and administrative expenses.

Future unrecognized stock-based compensation expense arising from the RSUs amount to $1,095,000, which will be recognized over the next 1.99 years.

7. FAIR VALUE MEASUREMENTS

ASC 820,Fair Value Measurements and Disclosures, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company's own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following, based on the nature of the valuation inputs:

• Level 1: quoted prices (unadjusted) for identical assets or liabilities in active markets;

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and,

• Level 3: one or more significant inputs used in a valuation technique are unobservable in determining fair values of the asset or liability. For example, inputs derived through extrapolation or interpolation that cannot be corroborated by observable market data.

The following table presents the placement in the fair value hierarchy of the Company's assets and liabilities measured at fair value on a recurring and nonrecurring basis as of June 30, 2026 and December 31, 2025. Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to tangible property and equipment, and right-of-use assets, which are remeasured when the derived fair value is below carrying value in the consolidated balance sheets. Recoverability is based on estimated undiscounted cash flows or other relevant observable/unobservable measures. For these assets, the Company does not periodically adjust carrying value to fair value except in the event of impairment. If it is determined that impairment has occurred, the carrying value of the asset is reduced to fair value, and the difference is charged to the condensed consolidated interim statements of operations.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the six months ended June 30, 2026. The carrying amounts of cash, restricted cash, and accounts payable and accrued liabilities approximated their fair values as of June 30, 2026 due to their short-term nature. The carrying amounts of due from related party and related party notes payable approximated their fair values as of December 31, 2025 due to their short-term nature.

As of June 30, 2026, certain investments with maturity within the next 12 months are reported as restricted due to restrictions placed by Flagship Bank on the Company's accounts as a result of ongoing dispute with the former CEO and Director of the Company (Note 11).

8. RELATED PARTY TRANSACTIONS

Due From Related Party

As of June 30, 2026, $0 (December 31, 2025 - $6,833) was due from the CFO, for expenses paid on behalf of the CFO by the Company prior to the initial public offering. The amounts were unsecured, non-interest bearing and due on demand. The amount has been repaid on May 15, 2026.

Notes Payable

On August 14, 2010, Company entered into a loan agreement with the former CEO, who is also a significant shareholder, in the amount of $865,000. The loan bears no interest, with no terms of repayment. As of June 30, 2026, and December 31, 2025, $0 and $185,976 was outstanding for this loan, respectively (Note 11).

On August 14, 2010, the Company entered into a loan agreement with an entity owned by the spouse of the former CEO, who is also a significant shareholder, in the amount of $865,000. The loan bears no interest, with no terms of repayment. As of June 30, 2026 and December 31, 2025, $0 and $865,000 was outstanding for this loan, respectively (Note 11).

On August 1, 2022, the Company entered into a loan agreement with the former CEO, who is also a significant shareholder, in the amount of $475,150. The loan bears no interest, with no terms of repayment. As of June 30, 2026 and December 31, 2025, $0 and $475,150 was outstanding for this loan, respectively (Note 11).

Related Party Transactions

Total related party transactions reported for the following items are as follows:

Management Compensation

The former CEO, the CEO, and the CFO are paid through consulting arrangements. Their remuneration, reported in selling, general and administrative expenses are as follows:

(1) As of June 30, 2026 and December 31, 2025, $0 and $25,000, respectively, of management compensation owed to the former CEO were included in accounts payable and accrued liabilities.

(2) As of June 30, 2026 and December 31, 2025, $0 and $8,000, respectively, of management compensation owed to the CEO and VP of Development were included in accounts payable and accrued liabilities.

(3) As of June 30, 2026 and December 31, 2025, $128 and $0, respectively, of management compensation owed to the CFO were included in accounts payable and accrued liabilities.

Consulting Fees and Contract Labor

The Company incurred other selling, general, and administrative expenses to family members of the former CEO and director, and other former directors as follows:

(1) Paid for consulting services.

(2) Paid for contract labor.

9. LOSS PER SHARE

Basic earnings (loss) per share ("EPS") is calculated by dividing profit or loss attributable to ordinary equity holders (numerator) by the weighted average number of ordinary shares outstanding (denominator) during the period. The denominator is calculated by adjusting the shares issued at the beginning of the period by the number of shares bought back during the period, multiplied by a time-weighting factor.

Diluted EPS is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential units. The effects of anti-dilutive options and potential units are ignored in calculating diluted EPS. All options and potential units are considered anti-dilutive when the Company is in a loss position.

The Company has the following anti-dilutive securities for the three and six months ended June 30, 2026 and 2025:

As of June 30, 2026,124,999 Restricted Share Units have vested but were issued subsequent to June 30, 2026 (Notes 6 and 14), and are included in the weighted average number of ordinary shares outstanding for the purposes of EPS calculation.

As of June 30, 2025, due to the terms of the conversion option for the Note Payable and Convertible Debentures, the Company could not predict the anti-dilutive shares for these instruments, and as such, they were excluded from the above table.

10. COMMITMENTS

Midland Economic Development Agreement

On October 7, 2024, the Company entered into an economic development agreement (the "Economic Development Agreement") with Midland Development Corporation ("MDC"), whereby MDC has agreed to provide certain incentives to the Company for (i) expansion of its business operations to the Midland International Air & Space Port ("KMAF"), (ii) creation and retention of primary jobs within the corporate limits of the City of Midland, and (iii) relocation of certain capital assets and equipment at the Midland International Air & Space Port. In connection with the Economic Development Agreement, the Company has a commitment to enter into certain temporary, short-term, and long-term hangar leases at KMAF, and the MDC would provide reimbursements of lease payments until a long-term hangar lease is being entered into. For the three and six months ended June 30, 2026, the Company incurred short-term rent expenses of $55,605 and $111,210 (three and six months ended June 30, 2025 - $24,000 and $64,000), respectively, and relocation costs of $0 and $0 (three and six months ended June 30, 2025 - $37,011 and $37,011), respectively, in relation to the Economic Development Agreement.

During the six months ended June 30, 2026 and 2025, the Company received from MDC advances of $413,000, and $49,500, respectively, which are recorded in grant payable.

For the six months ended June 30, 2026 and 2025, the Company is entitled to grant income related to reimbursement of these costs of $48,000 and $101,011, respectively. As of June 30, 2026 and December 31, 2025, the Company had a grant payable of $719,967 and $354,967, respectively.

Aerovision Aircraft Acquisition Agreement

On October 31, 2024, the Company entered into an aircraft acquisition agreement ("Aircraft Agreement") with Aerovision LLC ("Aerovision"), pursuant to which the Company agreed to purchase from Aerovision various used aircrafts and associated spare equipment (the "Aircraft Transactions") in phases. The subject aircraft for acquisition pursuant to the Aircraft Agreement are: (i) twelve F-4 Phantom II aircraft, (ii) one MD-83 with U.S. Federal Aviation Administration ("FAA") Registration N572AA, and (iii) one DC-9 with FAA Registration N932NA. The twelve F-4 Phantom II aircraft have recently been decommissioned by the Republic of Korea Air Force, and will have to be registered with the FAA after they are imported into the United States from South Korea.

The Aircraft Agreement requires an initial deposit advance in the amount of $5,000,000 to be made no later than ten business days from the signing of the Aircraft Agreement, which has been paid from funds received from the Company's Regulation A Tier 2 Offering. The payment of the deposit is considered to constitute "Phase 1" under the Aircraft Agreement. Phase 2 will involve the payment of an additional $5,000,000 for the acquisition of eight of the twelve F-4 Phantom II aircraft. Such payment is due no later than December 15, 2024. Phase 3 will involve the payment of an additional $5,000,000 for the acquisition of the final four F-4 Phantom II aircraft. Such payment is due no later than March 15, 2025. Phase 4 shall involve the payment of an additional $5,000,000 forthe acquisition of the MD-83 aircraft with FAA Registration N572AA, and the DC-9 aircraft with FAA Registration N932NA. The parties are to use their reasonable best efforts to complete Phase 4 by April 15, 2025. This agreement has subsequently been amended.

On January 28, 2025, the Company and Aerovision verbally agreed to amend the Aircraft Agreement regarding the Aircraft Transactions, pursuant to which: (i) the Company may elect not to proceed with Phase 3 and/or Phase 4; (ii) the initial deposit advance of $5,000,000 is broken down into two payments of $2,500,000 each, with the first payment to be made on or before January 31, 2025 (which has been paid on January 24, 2025), and the second payment to be made within 10 days of Aerovision executing a binding agreement to acquire a minimum of eight F-4 Phantom II aircraft from an alternative supplier(s) (which has been paid on March 3, 2025); (iii) the due date for payment associated with Phase 2 is amended to be within five days of Aerovision providing confirmation of shipping of the F-4 Phantom II aircraft to the Company from the point of origin; (iv) the due date for payment associated with Phase 3, if Starfighters International elected to proceed, is amended to be October 31, 2025; (v) the due date for payment associated with Phase 4, if Starfighters International elected to proceed, was amended to be January 31, 2026.

If all four phases of the Aircraft Agreement are completed, the total cost of the agreement will be $20,000,000. As of June 30, 2026, the Company has made deposits to Aerovision totalling $5,150,000 (December 31, 2025 - $5,150,000), which has been impaired during the three and six months ended June 30, 2026 (Note 11).

11. CONTINGENCIES

In the ordinary course of business, the Company may from time to time become subject to legal proceedings and claims arising in connection with ongoing business activities. Management assesses such claims and, if it considers that it is probable that an asset had been impaired or a liability had been incurred, and the amount of loss can be reasonably estimated, provisions for loss are made based on management’s assessment of the most likely outcome.

Pending Litigation with Rick Svetkoff, former CEO and Director

On April 9, 2026, Rick Svetkoff, former CEO and Director, filed a complaint against the Company, and its board members in the 18th Judicial Circuit in Brevard County, Florida. The complaint alleges that the defendants breached fiduciary duty, deceptive business practices, and improper control and alteration of corporate records and is seeking $26 million in damages. The Company denies all of the allegations of the complaint and intends to vigorously defend itself. The amounts and outcome of the complaint cannot be determined at this time and has not been accrued for in these condensed consolidated interim financial statements for the three and six months ended June 30, 2026.

On February 19, 2026, Rick Svetkoff, the former CEO and Director, and Brenda Svetkoff, former Secretary and spouse of the former CEO, voluntarily resigned from the Company. On February 3, 2026 and February 17, 2026, Rick Svetkoff withdrew and transferred funds amounting to $500,000 to an account not held in the name of the Company or its subsidiaries, and $1,395,869 to Rick Svetkoff and RLB Aviation, Inc., a company controlled by Brenda Svetkoff, respectively, without approval of the Company's Board of Directors or Audit Committee. In February 2026, Rick and Brenda Svetkoff made rental payments for a residential property of $19,502 from the Company's funds without authorization. In May 2026, the Company discovered a further bank account opened in 2024 without approval of the Company's Board of Directors or Audit Committee by Rick and Brenda Svetkoff, which processed Company funds, and had $5,788 withdrawn and not returned to the Company's treasury, upon account closure in March 2025. Such amounts total to $1,921,159. As of June 30, 2026, $1,526,126 has been applied to related party notes payable previously owed to Rick Svetkoff and RLB Aviation, Inc., as the Company was notified during the three and six months ended June 30, 2026 that such withdrawals were intended for repaying the related party notes payable. The Company recognized a loss to misappropriation of assets of $395,033, which is the balance of the misappropriated amount after the application towards related party notes payable, and the Company intends to pursue a recovery thereof.

Aerovision Aircraft Acquisition Agreement

During the six months ended June 30, 2026, in relation to the Aircraft Agreement (Note 10), Aerovision has not provided any information as to the availability of any of the F-4 Phantom II aircraft contemplated to be purchased by the Company, and all recent attempts by the Company to contact Aerovision have been unsuccessful. On August 10, 2026, the Company has filed a legal claim to initiate legal proceedings against Aerovision and individuals connected with Aerovision.

In considering the recoverability of the deposits to Aerovision, the Company considered the lack of communication from Aerovision as an impairment indicator, as analogized from ASC 360-10-35, and applied the recognition and measurement framework in ASC 450-20-25 to evaluate whether a loss was probable and estimable, in relation to the probability of recoverability.

The Company considered the following factors:

• the lack of communication persisted since February 2026;

• there have been no further progress demonstrated in sourcing appropriate aircraft for purchase;

• Aerovision has failed to respond to a letter of demand from the litigation counsel of the Company during the three months ended June 30, 2026.

The Company concluded that it was probable, that the deposit may be impaired. As such, an impairment of $5,150,000, representing the full amount of deposits paid by the Company was recognized on the unaudited condensed consolidated interim statement of operations during the three and six months ended June 30, 2026.

The Company will revisit this assessment each subsequent reporting period as new facts and information become available.

Pending Litigation with Mountain CI Holdings Ltd.

On April 17, 2026, Mountain CI Holdings Ltd. filed a complaint against Starfighters, Inc., a subsidiary of the Company, in the 18th Judicial Circuit in Brevard County, Florida. The plaintiff is seeking $610,000 for monies allegedly lent to Starfighters, Inc. in 2014 - 2021 which remained unpaid. The Company denies all of the allegations of the complaint and intends to vigorously defend itself. The outcome of the complaint cannot be determined at this time and has not been accrued for in these condensed consolidated interim financial statements for the six months ended June 30, 2026.

Flagship Bank Account Restrictions

Due to ongoing dispute and a legal complaint filed by Rick Svetkoff, former CEO and Director, on April 9, 2026, Flagship Bank has placed restrictions on all accounts held by SFII. As such, the Company reports cash of $684,757 and short-term investments of $508,229, as restricted as of June 30, 2026.

Regions Bank Account Restrictions

Due to ongoing dispute with Rick Svetkoff, former CEO and Director, over the control of bank accounts, Regions Bank has formally notified the Company on May 15, 2026, that it has placed restrictions on all accounts held by Starfighters International, Inc., a Texas subsidiary of the Company. As such, the Company reports cash of $211,119 as restricted as of June 30, 2026.

12. CORRECTION OF IMMATERIAL ERRORS

As disclosed in the Company's Form 10-K filed on April 15, 2026, and Form 10-K/A filed on July 21, 2026, certain revisions, noted below, were necessary to the previously filed financial statements for the three and six months ended June 30, 2025.

The Company identified the following errors affecting the previously filed financial statements:

(i) an under-recognition of research and development expenses of $255,479 during the three months ended March 31, 2025, that was instead recorded in the three and six months ended June 30, 2025;

(ii) an under-accrual of business development expenses, related to hourly billings for services between May and June 2025, where insufficient accruals for those services were provided based on information available at the time of reporting for those periods.

The Company determined business development expenses of $376,125 and $376,125, respectively, should have been recorded as selling, administrative and general expenses in the unaudited condensed consolidated interim statements of operations for the three and six months ended June 30, 2025, and research and development expenses in the unaudited condensed consolidated interim statement of operations for the three months ended June 30, 2025 was overstated by $255,479.

A tabular presentation of each affected prior interim period, for each line item impacted, showing the amount as previously reported, the amount of correction, and the amount as corrected, is as follows:

Unaudited condensed consolidated interim statement of operations for the three months ended June 30, 2025

(*) Conformed to current presentation (Note 3)

Unaudited condensed consolidated interim statement of operations for the six months ended June 30, 2025

(*) Conformed to current presentation (Note 3)

Unaudited condensed consolidated interim balance sheet as of June 30, 2025

Unaudited condensed consolidated interim statement of cash flows for the six months ended June 30, 2025

Unaudited condensed consolidated interim statement of changes in stockholders' equity (deficit) for the six months ended June 30, 2025

For the three and six months ended June 30, 2025, the corrected net loss is $1,934,427 and $4,587,534, respectively, or $0.09 per share, and $0.23 per share, respectively.

The Company evaluated the corrections and has determined their impacts were immaterial, individually and in aggregate, to the previously issued unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2025.

13. SEGMENT INFORMATION

Segment assets are the same as consolidated total assets of $32,532,280 and $28,386,884, as at June 30, 2026 and December 31, 2025, respectively.

The table below details the Company's significant expenses and other segment items and reconciles those amounts to the Company's consolidated net loss as computed under U.S. GAAP in the unaudited condensed consolidated interim statements of operations:

(1) Inclusive of stock-based compensation of $601,162 and $1,038,680 for the three and six months ended June 30, 2026, respectively.

(2) Other selling, general and administrative items consist of rent, office and administrative expenses, travel and entertainment, directors' fees, relocation costs, depreciation, and loss on disposal of property, plant, and equipment.

(3) Other segment items consists of interest income, realized and unrealized gains on short-term investments, interest expense, and other income (loss), net, none of which is individually significant.

14. SUBSEQUENT EVENTS

On July 7, 2026, the Company issued 124,999 Common Shares for the settlement of 124,999 RSUs (Note 6) vested upon grant on June 25, 2026.