SEDAR Interim Financial Statements

www.networkmediagroup.ca Condensed Interim Consolidated Financial Statements of NETWORK MEDIA GROUP INC. For the nine month period ended August 31, 2025 and 2024 (Expressed in Canadian dollars) (Unaudited – Prepared by management) 2 NOTICE TO READER Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim consolidated financial statement have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these condensed interim consolidated financial statements in accordance with standards established by the Canadian Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor. Vancouver, BC October 30, 2025 3 Nature of operations and going concern (Note 1) Subsequent events (Note 23) Approved by the Board of Directors on October 30, 2025. “Paul Gertz” “Derik Murray” Paul Gertz, Director Derik Murray, Director The accompanying notes are an integral part of these condensed interim consolidated financial statements. NETWORK MEDIA GROUP INC. Condensed Interim Consolidated Statements of Financial Position As at August 31, 2025 and November 30, 2024 Expressed in Canadian dollars (Unaudited) August 31, November 30, Note 2025 2024 ASSETS Current Cash 3,564,064 $ 3,016,447 $ Accounts receivable 3 1,290,267 1,102,719 Tax credits receivable 1,443,552 1,866,909 Prepaid expenses and deposits 99,471 80,206 6,397,354 6,066,281 Tax credits receivable 2,015,120 786,670 Property, equipment and right-of-use assets 4 504,330 767,678 Investment in film and television properties 6, 13, 19 9,158,868 10,462,903 Total Assets 18,075,672 $ 18,083,532 $ LIABILITIES AND SHAREHOLDERS' EQUITY Current Line of credit 7 280,000 $ 295,000 $ Accounts payable and accrued liabilities 5, 8, 13 4,577,780 3,853,952 Production financing 9 1,673,679 1,234,243 Deferred revenue 10 1,569,523 2,010,628 Current portion of debt payable 11 150,000 300,000 Promissory note 13 721,549 662,996 Current lease obligations 12 214,944 293,318 9,187,475 8,650,137 Accounts payable and accrued liabilities 5 69,548 69,548 Debt payable 11 - 75,000 Lease obligations 12 160,581 315,155 Total Liabilities 9,417,604 9,109,840 Shareholders' Equity Share capital 14 12,927,976 12,927,976 Share-based payment reserve 14(c) 1,415,832 1,444,085 Deficit (5,685,740) (5,398,369) Total Shareholders' Equity 8,658,068 8,973,692 Total Liabilities and Shareholders' Equity 18,075,672 $ 18,083,532 $ 4 The accompanying notes are an integral part of these condensed interim consolidated financial statements. NETWORK MEDIA GROUP INC. Consolidated Statements of Net and Comprehensive Income (Loss) For the three and nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) August 31, August 31, August 31, August 31, Note 2025 2024 2025 2024 Total revenue 15 2,849,848 $ 2,836,100 $ 5,366,881 $ 7,971,885 $ Production costs 13, 17(a), 19 1,708,726 2,717,064 2,665,967 7,269,612 Amortization of investment in film and television properties 6 552,153 380,826 1,639,203 1,151,387 Amortization of property, equipment and right-of-use assets 4 85,838 106,270 293,095 336,643 General and administrative 13, 16, 17(a) 167,909 263,408 666,923 69 --- 3,336 Impairment of investment in film and television properties 6 9,601 27,753 136,784 55,649 Selling and distribution 16 183,270 15,049 194,474 97,722 Share-based payments 13, 14(c) 6,514 28,459 27,023 94,920 Derecognition of accounts payable - - (12,329) - 2,714,011 3,538,829 5,611,140 9,699,269 Income (loss) before other items 135,837 (702,729) (244,259) (1,727,384) Other income (20,143) 27,175 (20,808) 12,544 Foreign exchange loss (gain) (29,665) (45,925) (3,880) 116,353 Remeasurement on lease modifications 4 - - - 7,779 Financing expense 17(b) 47,895 (14,327) 174,615 161,770 Write-off of intangible asset 6 - 100,000 - 100,000 Income (loss) before income taxes 137,750 (769,652) (394,186) (2,125,830) Income tax expense (recovery) 18 1,897 (253) (51,539) 4,313 Net and comprehensive income (loss) for the period 135,853 $ (769,399) $ (342,647) $ (2,130,143) $ Earnings (loss) per share - basic 0.01 $ (0.04) $ (0.02) $ (0.12) $ - diluted 0.01 $ (0.04) $ (0.02) $ (0.12) $ Weighted average number of shares outstanding - basic 17,824,707 17,824,707 17,824,707 17,824,707 - diluted 17,824,707 17,824,707 17,824,707 17,824,707 Three month period ended Nine month period ended 5 The accompanying notes are an integral part of these condensed interim consolidated financial statements. NETWORK MEDIA GROUP INC. Condensed Interim Consolidated Statements of Changes in Shareholders' Equity For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) Number of Share Share-based Note common shares capital payment reserve Deficit Total Balance as at November 30, 2023 17,824,707 12,927,976 $ 1,125,538 $ (3,490,701) $ 10,562,813 $ Share-based payments 14(c) - - 94,920 - 94,920 Reclassification of fair value of cancelled or expired stock options 14(c) - - (2,568) 2,568 - Net and comprehensive loss for the period - - - (2,130,143) (2,130,143) Balance as at August 31, 2024 17,824,707 12,927,976 $ 1,217,890 $ (5,618,276) 8,527,590 $ Balance as at November 30, 2024 17,824,707 12,927,976 $ 1,444,085 $ (5,398,369) $ 8,973,692 $ Share-based payments 14(c) - - 27,023 - 27,023 Reclassification of fair value of cancelled or expired stock options 14(c) - - (55,276) 55,276 - Net and comprehensive loss for the period - - - (342,647) (342,647) Balance as at August 31, 2025 17,824,707 12,927,976 $ 1,415,832 $ (5,685,740) $ 8,658,068 $ 6 The accompanying notes are an integral part of these condensed interim consolidated financial statements. NETWORK MEDIA GROUP INC. Condensed Interim Consolidated Statements of Cash Flows For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) August 31, August 31, 2025 2024 Operating activities Net loss for the period (342,647) $ (2,130,143) $ Items not involving cash: Amortization of investment in film and television properties 1,639,203 336,643 Amortization of property, equipment and right-of-use assets 293,095 1,151,387 Impairment of investment in film and television properties 136,784 55,649 Write-off of intangible asset - 100,000 Share-based payments 27,023 94,920 Derecognition of accounts payable (12,329) - Other income - (746) Remeasurement on lease modifications - 7,779 1,741,129 (384,511) Net changes in non-cash working capital items Accounts receivable (187,548) 1,080,212 Tax credits receivable 1,820,691 (283,272) Prepaid expenses and deposits (19,265) 2,161 Accounts payable and accrued liabilities 710,964 308,600 Accrued interest 181,838 161,770 Defer --- red revenue (441,105) 1,528,171 Net cash provided by operating activities 3,806,704 2,413,131 Financing activities Proceeds from production financing 1,378,580 408,863 Repayment of production financing (1,574,308) (1,452,469) Proceeds from line of credit - 15,000 Repayment of line of credit (28,557) (18,834) Repayment of promissory note - (91,053) Repayment of lease obligations (279,096) (262,811) Repayment of debt payable (239,780) (384,905) Net cash used in financing activities (743,161) (1,786,209) Investing activities Additions to property, equipment and right-of-use assets (2,801) (288,901) Proceeds from sale and leaseback - 107,905 Investment in film and television properties, net of tax credits (2,371,251) 661,209 Investment in properties in development (141,874) (341,119) Net cash provided by (used in) investing activities (2,515,926) 139,094 Effect of exchange rate changes on cash - (5,745) Increase in cash 547,617 760,271 Cash, beginning of period 3,016,447 2,275,164 Cash, end of period 3,564,064 $ 3,035,435 $ Supplemental cash flow information (Note 18) Nine month period ended NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 7 1. Nature of operations and going concern Network Media Group Inc. (“Network” or the “Company”) was incorporated on July 12, 2010 under the Business Corporations Act of the Province of British Columbia. Network together with its subsidiaries, develops, produces and exploits film and television properties in addition to providing production services to third parties. The Company has a working capital deficiency of $2,790,121 and an accumulated deficit of $5,685,740 which give rise to material uncertainties which may cast significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to continue to generate profitable operations, manage its capital and access sufficient future capital if needed. These condensed interim consolidated financial statements do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in other than the normal course of operations and at amounts different from those in these condensed interim consolidated financial statements. Such adjustments could be material. The Company’s principal place of business is 1684 West 2nd Avenue, Vancouver, British Columbia, V6J 1H4. The Company’s registered office is Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7. 2. Basis of presentation (a) Statement of compliance These condensed interim consolidated financial statements have been prepared in accordance with IFRS Accounting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). Therefore, these financial statements comply with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting”. This interim financial report does not include all of the information required of a full annual financial report and is intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period. It is therefore --- recommended that this financial report be read in conjunction with the annual consolidated financial statements of the Company for the year ended November 30, 2024. The condensed interim consolidated financial statements of the Company for the nine month period ended August 31, 2025 and 2024 were authorized for issue by the Board of Directors on October 30, 2025. (b) Basis of measurement The financial statements have been prepared on an accrual basis under the historical cost convention, except for cash flow information. NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 8 2. Basis of presentation (continued) (c) Functional currency The consolidated financial statements are presented in Canadian dollars. The determination of functional currency, which is performed on an entity-by-entity basis, is based on various judgmental factors outlined in IAS 21 – The Effects of Changes in Foreign Exchange Rates. Based on an assessment of the factors in IAS 21, management determined that the functional currency for the Company and its subsidiaries is the Canadian dollar. (d) Basis of consolidation The condensed interim consolidated financial statements comprise the financial statements of Network and its wholly owned subsidiaries. The active companies included within the condensed interim consolidated financial statements are as follows: • Network Media Group Inc. (British Columbia Incorporated) • Network Entertainment Inc. (British Columbia Incorporated) • Network Films Twenty-Three Inc. (British Columbia Incorporated) • Network Films Twenty-Four Inc. (British Columbia Incorporated) • Network Films Twenty-Five Inc. (British Columbia Incorporated) • Network Films Twenty-Six Inc. (British Columbia Incorporated) • Network Pictures Twenty-Two Inc. (British Columbia Incorporated) • Network Pictures Twenty-Three Inc. (British Columbia Incorporated) • Network Pictures Twenty-Five Inc. (British Columbia Incorporated) • Network Pictures Twenty-Seven Inc. (British Columbia Incorporated) • Network Pictures Twenty-Eight Inc. (British Columbia Incorporated) • Network Pictures Twenty-Nine Inc. (British Columbia Incorporated) • Network Entertainment Corp. (Delaware Incorporated) • 1451463 B.C. Ltd. (British Columbia Incorporated) All intercompany balances, transactions, income and expenses are eliminated on consolidation. (e) Significant accounting judgments and key sources of estimate uncertainty The preparation of the condensed interim consolidated financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and for the periods presented. It also requires management to exercise judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to financial statements, have been set out in Note 3 of the Company’s audited annual consolidated financial statements for the year ended November 30, 2024. Actual results may differ materially from these estimates. NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian doll --- ars (Unaudited) 9 2. Basis of presentation (continued) (f) New accounting standards adopted The Company adopted the following amendment to IFRS Accounting Standards. Their adoption has not had a material impact on disclosures or amounts reported in these consolidated financial statements. Amendments to IAS 1 - Presentation of Financial Statements In October 2022, the IASB issued amendments to IAS 1, Presentation of Financial Statements titled non-current liabilities with covenants. These amendments sought to improve the information that an entity provides when its right to defer settlement of a liability is subject to compliance with covenants within 12 months after the reporting period. These amendments to IAS 1 override but incorporate the previous amendments, Classification of liabilities as current or noncurrent, issued in January 2020, which clarified that liabilities are classified as either current or non-current depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non- current if an entity has a substantive right to defer settlement for at least 12 months at the end of the reporting period. The amendments were effective for annual periods beginning on or after January 1, 2024, with early adoption permitted. Retrospective application was required on adoption. (g) New accounting standards not yet adopted Amendments to IAS 21, Lack of Exchangeability In August 2024, the IASB issued amendments to IAS 21 to clarify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking, as well as require the disclosure of information that enables users of financial statements to understand the impact of a currency not being exchangeable. The amendments are effective for annual periods beginning on or after January 1, 2025, with early adoption is permitted. When applying the amendments, an entity cannot restate comparative information. The Company is currently in the process of assessing the impact of the amendments on the consolidated financial statements and notes to the consolidated financial statements. IFRS 18 Presentation and Disclosure in Financial Statements In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements. This standard aims to improve the consistency and clarity of financial statement presentation and disclosures by providing updated guidance on the structure and content of financial statements. Key changes include enhanced requirements for the presentation of financial performance, financial position, and cash flows, as well as additional disclosures to improve transparency and comparability. In addition, IFRS 18 requires entities to classify income and expenses into five categories, three of which are new – i.e. operating, investing and financing – and the income tax and discontinued operation categories. The new standard sets out detailed requirements for classifying income and expenses into each category. These amendments are effective for annual periods beginning on or after January 1, 2027. The Company is currently assessing the impact that the adoption of IFRS 18 will have on its consolidated financial statements. NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 10 2. Basis of presentation (continued) (g) New accou --- nting standards not yet adopted (continued) Amendments to IFRS 9 and IFRS 7, Classification and Measurement of Financial Instruments IFRS 9 requires entities to recognize financial assets and liabilities when they become party to the contractual terms and to measure them initially at fair value, adjusted for directly attributable transaction costs where applicable. The standard is being clarified to provide better guidance on the derecognition of financial liabilities, which can impact bank reconciliation processes, especially during debt restructuring based on the timing of payments on financial liabilities as compared to the actual settlement of those debts. This clarification may result in a change in the derecognition timing of financial liabilities in situations where electronic payments are involved. These amendments are effective for annual periods beginning on or after January 1, 2026. The Company is currently assessing the impact that the adoption of this clarification of IFRS 9 will have on its consolidated financial statements. 3. Accounts receivable The aging of current receivables from broadcasters is as follows: August 31, November 30, 2025 2024 Receivables from broadcasters 1,257,971 $ 987,092 $ Input tax credits and other receivables 32,296 115,627 1,290,267 $ 1,102,719 $ August 31, November 30, 2025 2024 Less than 60 days 1,228,284 $ 828,268 $ Over 61 days 29,687 158,824 1,257,971 $ 987,092 $ NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 11 4. Property, equipment and right-of-use assets During the year ended November 30, 2024, there were modifications to certain lease agreements to either extend the lease term or terminate the agreement. As a result of the lease modifications, the Company remeasured the lease liability and recorded a corresponding adjustment to the relevant right-of-use asset, resulting in a remeasurement recognized in profit or loss of $7,779. The Company also entered into a sale- leaseback agreement whereby certain computer equipment was sold to a third party and immediately leased back, for a term of 59 months. The Company derecognized the computer equipment at its carrying value and recorded a right-of-use asset retained through the leaseback, resulting in a gain of $746 which was recorded in other income. During the nine month period ended August 31, 2025, the Company modified a certain lease agreement for a change in consideration. As a result of the lease modification, the Company remeasured the lease liability and recorded a corresponding adjustment to the relevant right-of-use asset. There were no impairment write-downs or any reversals of previous write-downs, nor did the Company have any disposals of property and equipment during the periods presented, other than the sale-leaseback agreement noted above. Furniture Computer and office Production Leasehold Right-of-use equipment equipment equipment Improvements assets Total Cost Balance at November 30, 2023 1,018,828 $ 106,286 $ 72,187 $ - $ 1,210,243 $ 2,407,544 $ Additions 236,294 - - 51,109 554,791 842,194 Lease modifications - - - - (417,849) (417,849) Sale and leaseback (115,458) - - - 159,897 44,439 Balance at November 30, 2024 1,139,664 106,286 72,187 51,109 1,507,082 2,876,328 Additions 2,801 - - - - 2,801 Lease modification - - - - 26,946 26,946 Balance at August 31, 2025 1,142,465 $ 106,286 $ 7 --- 2,187 $ 51,109 $ 1,534,028 $ 2,906,075 $ Accumulated amortization Balance at November 30, 2023 907,237 $ 88,169 $ 56,983 $ - $ 1,042,656 $ 2,095,045 $ Amortization expense 105,177 3,617 4,561 25,554 364,942 503,851 Lease modifications - - - - (484,315) (484,315) Sale and leaseback (5,931) - - - - (5,931) Balance at November 30, 2024 1,006,483 91,786 61,544 25,554 923,283 2,108,650 Amortization expense 30,288 2,170 2,395 9,583 248,659 293,095 Balance at August 31, 2025 1,036,771 $ 93,956 $ 63,939 $ 35,137 $ 1,171,942 $ 2,401,745 $ Carrying amount November 30, 2024 133,181 $ 14,500 $ 10,643 $ 25,555 $ 583,799 $ 767,678 $ August 31, 2025 105,694 $ 12,330 $ 8,248 $ 15,972 $ 362,086 $ 504,330 $ NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 12 4. Property, equipment and right-of-use assets (continued) The continuity of right-of-use assets is as follows: 5. Intangible asset On February 1, 2022, as last amended on December 1, 2024, the Company entered into a non-fungible token (“NFT”) Licensing Agreement whereby the Company acquired certain rights to develop, create, and market NFTs (collectively, the “NFT Licenses”). As a result of the first amending agreement, consideration for the NFT Licenses was reduced by $250,000, resulting in a corresponding reduction in accounts payable and accrued liabilities. During the year ended November 30, 2024, the Company determined that it would not exercise its right to renew and extend the term of the NFT Licenses. Accordingly, the Company impaired the intangible asset of $150,000 and derecognized accounts payable and accrued liabilities in the amount of $50,000. Leasehold improvements Office Vehicle Equipment Total Cost Balance at November 30, 2023 13,734 $ 1,113,957 $ 34,186 $ 48,366 $ 1,210,243 $ Additions - 319,370 38,468 196,953 554,791 Lease modifications - (417,849) - - (417,849) Sale and leaseback - - - 159,897 159,897 Balance at November 30, 2024 13,734 1,015,478 72,654 405,216 1,507,082 Lease modification - 26,946 - - 26,946 Balance at August 31, 2025 13,734 $ 1,042,424 $ 72,654 $ 405,216 $ 1,534,028 $ Accumulated amortization Balance at November 30, 2023 13,734 $ 955,706 $ 28,444 $ 44,772 $ 1,042,656 $ Amortization expense - 294,328 7,346 63,268 364,942 Lease modifications - (484,315) - - (484,315) Balance at November 30, 2024 13,734 765,719 35,790 108,040 923,283 Amortization expense - 175,130 7,213 66,316 248,659 Balance at August 31, 2025 13,734 $ 940,849 $ 43,003 $ 174,356 $ 1,171,942 $ Carrying amount November 30, 2024 - $ 249,759 $ 36,864 $ 297,176 $ 583,799 $ August 31, 2025 - $ 101,575 $ 29,651 $ 230,860 $ 362,086 $ NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 13 5. Intangible asset (continued) A continuity schedule of the intangible asset is as follows: During the nine month period ended August 31, 2025, the Company entered into another amendment to the NFT Licensing Agreement whereby a payment of $25,000 would be due on June 30, 2025, if the Company exercises its right to renew and further extend the term of the NFT Licenses. On May 1, 2025, the Company provided notice that it would not be exercising its right to renew. 6. Investment in film and television properties Cost Balance at November 30, 2022 400,0 --- 00 $ Amendment to consideration (250,000) Balance at November 30, 2023 150,000 Impairment of intangible asset (150,000) Balance at November 30, 2024 and August 31, 2025 - $ Properties in development Properties in progress Properties completed and released Total Balance, November 30, 2023 1,635,035 $ 2,196,847 $ 7,878,305 $ 11,710,187 $ Additions 462,102 3,748,704 7,155 4,217,961 Tax credits accrued - (2,387,874) (15,105) (2,402,979) Transferred to properties in progress (118,192) 118,192 - - Transferred to properties completed and released - (2,489,694) 2,489,694 - Impairment (205,685) (200,000) - (405,685) Amortization - - (2,656,581) (2,656,581) Balance, November 30, 2024 1,773,260 986,175 7,703,468 10,462,903 Additions 190,803 1,278,956 56,544 1,526,303 Tax credits accrued - (961,553) (92,798) (1,054,351) Transferred to properties in progress (48,929) 48,929 - - Transferred to properties completed and released - (1,288,047) 1,288,047 - Impairment (9,601) - (127,183) (136,784) Amortization - - (1,639,203) (1,639,203) Balance, August 31, 2025 1,905,533 $ 64,460 $ 7,188,875 $ 9,158,868 $ As at November 30, 2024 Cost 1,773,260 $ 986,175 $ 44,788,218 $ 47,547,653 $ Accumulated amortization - - (37,084,750) (37,084,750) Carrying amount 1,773,260 $ 986,175 $ 7,703,468 $ 10,462,903 $ As at August 31, 2025 Cost 1,905,533 $ 64,460 $ 45,912,828 $ 47,882,821 $ Accumulated amortization - - (38,723,953) (38,723,953) Carrying amount 1,905,533 $ 64,460 $ 7,188,875 $ 9,158,868 $ NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 14 6. Investment in film and television properties (continued) During the nine month period ended August 31, 2025, interest of $7,223 (2024 – $Nil) has been capitalized within the properties in progress and productions completed and released balances. As at August 31, 2025, the Company determined that the recoverability of certain properties in development and progress is less than their respective carrying values. As a result, the Company recognized an impairment of $136,784 (November 30, 2024 - $405,685) in profit or loss during the periods presented. 7. Line of credit The Company has available a line of credit agreement with a Canadian chartered bank which provides that the Company may borrow up to $300,000. Borrowing under the line of credit bears interest, payable monthly, at the bank’s prime rate plus 1.8% and is secured by a general security agreement over the property of the Company. The balances payable under this agreement are due on demand. As of Augst 31, 2025, outstanding borrowings were $280,000 (November 30, 2024 – $295,000). Refer to Note 17(b) for related interest expense. 8. Accounts payable Management periodically reviews accounts payable and may reverse a portion that has been outstanding for an extended period of time, if there has been no correspondence received by the Company from creditors for payment and the statute of limitations has expired. During the nine month period ended August 31, 2025, management derecognized $12,329 (2024 – $Nil) of accounts payable. 9. Production financing Interim production financing Certain subsidiaries of the Company have secured interim bank loans and/or third-party loans to finance the cost of producing their respective productions or related to certain of the Company’s productions. These loans bear interest at the rates ranging from --- the bank’s prime rate plus 1.50% to a rate of 12% per annum and are either short-term or repayable on demand. Each loan is secured by the tax credits receivable of the respective subsidiary and may also have a general security agreement over the assets of the Company. Refer to Note 17(b) for related interest expense. During the nine month period ended August 31, 2025, the Company repaid interim production financing of $1,574,308 and received additional financing of $1,378,580. Refer to Note 18. Production financing obligation During the nine month period ended August 31, 2025, the Company entered into independent, third party film financing agreements, pursuant to which the Company receives financing to fund a certain production. As of August 31, 2025, production has commenced, and the total financing has been received by the production subsidiary. As at August 31, 2025, the funding received or accrued exceeded the carrying amount of the related production costs. Accordingly, the excess amount of $559,418 has been recognized as a financial liability. The liability will be extinguished as future production costs are incurred. NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 15 10. Deferred revenue Deferred revenue represents distribution and development advances as well as contracted fees received or receivable prior to the contracted work being completed. Distribution advances will be taken into income upon completion of properties in progress. Development advances are from unrelated third parties for development of current and future properties. Repayment of the advances is contingent upon commencement of principal photography. In the event that the properties are not produced, the development advances are typically forgiven by the third party. The following table reflects the movement in deferred revenue: 11. Debt payable The Company has secured a $1,200,000 loan ("line of credit") from a chartered bank through the Export Development Canada COVID relief funding program. The line of credit is secured by a general charge over the assets of the Company, postponement and assignment of claim agreement and an intercreditor agreement. The line of credit accrues interest payable monthly, at the bank’s prime rate plus 0.25%. The term of the loan is 5 years from initial drawdown, commencing on February 1, 2021, with interest only for the first year, then converts to a term loan for the final 4 years. Refer to Note 17(b) for related interest expense. Principal repayments on debt payable are as follows: • $75,000 for the fiscal year ended November 30, 2025; and • $75,000 for the fiscal year ended November 30, 2026. Under the terms of the line of credit, the Company is required to maintain a debt service coverage ratio of not less than 1.1:1, tested annually. As at November 30, 2024, the Company was in compliance with the debt service coverage covenant. August 31, November 30, 2025 2024 Deferred revenue, beginning of period 2,010,628 $ 2,307,770 $ Revenue recognized that was included in the deferred revenue balance at the beginning of period (1,882,677) (1,797,976) Increase due to cash received, excluding amounts recognized as revenue during the period 1,441,572 1,500,834 Deferred revenue, end of period 1,569,523 $ 2,010,628 $ August 31, November 30, 2025 2024 Total debt payable 150,000 $ 375,000 $ Current po --- rtion (150,000) (300,000) Non-current portion of debt payable - $ 75,000 $ NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 16 12. Lease obligations The Company’s leases are comprised of the following: The following table presents a reconciliation of the Company’s undiscounted cash flows as at August 31, 2025 and November 30, 2024 to their present value for the Company’s lease obligations: Note Office Vehicle Equipment Total Lease obligations recognized at November 30, 2023 138,611 $ 6,316 $ 3,392 $ 148,319 $ Additions 319,370 38,468 196,953 554,791 Lease modifications 74,245 - - 74,245 Sale and leaseback - - 157,529 157,529 Interest expense 17(b) 27,255 905 7,415 35,575 Lease payments (276,289) (8,479) (77,218) (361,986) Lease obligations recognized at November 30, 2024 283,192 37,210 288,071 608,473 Less: non-current portion (68,006) (34,550) (212,599) (315,155) Current portion of lease obligations 215,186 $ 2,660 $ 75,472 $ 293,318 $ Lease obligations recognized at November 30, 2024 283,192 $ 37,210 $ 288,071 $ 608,473 $ Lease modification 26,946 - - 26,946 Interest expense 17(b) 9,441 3,157 6,604 19,202 Lease payments (200,147) (9,146) (69,803) (279,096) Lease obligations recognized at August 31, 2025 119,432 31,221 224,872 375,525 Less: non-current portion - (24,389) (136,192) (160,581) Current portion of lease obligations 119,432 $ 6,832 $ 88,680 $ 214,944 $ August 31, November 30, 2025 2024 Within one year 234,104 $ 333,112 $ Between one and five years 160,581 315,155 Total undiscounted lease obligations 394,685 648,267 Less: future interest charges (19,160) (39,794) Total discounted lease obligations 375,525 608,473 Less: current portion of lease obligations (214,944) (293,318) Non-current portion of lease obligations 160,581 $ 315,155 $ NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 17 13. Related parties Key management personnel are those persons having the authority and responsibility for planning, directing, and controlling activities of the entity, directly or indirectly. Related parties are defined as key management personnel as well as any companies that are controlled by Officers or Directors of the Company. During the nine month period ended August 31, 2025 and 2024, the Company paid or accrued wages and recognized share-based payments to key management personnel in the following manner: Recorded in accounts payable and accrued liabilities at August 31, 2025 are the following amounts: a) $6,300 (November 30, 2024 – $13,250) owed to a company controlled by an Officer of the Company. Amounts due to the related party are unsecured, non-interest bearing and due on demand. b) Pursuant to Executive Producer Agreements, as last amended on June 7, 2024: • $130,000 (November 30, 2024 – $96,342) in yearly executive producer (“EP”) fees, of which $33,658 (November 30, 2024 - $65,000) was recorded in production costs in profit and loss in the current period. The first instalment was payable on achieving particular production milestones of certain projects for which production has not yet commenced and payment of such fees was due on or before July 31, 2025 (Note 23); and • $Nil (November 30, 2024 – $25,000) in EP fees which was recorded as investment in f --- ilm and television properties. The fees were payable on achieving particular production milestones for productions that have commenced. c) Pursuant to an amendment to a Promissory Note agreement, an EP fee of $84,500 (November 30, 2024 - $79,625) of which $Nil (November 30, 2024 – $65,000) was recorded in production costs in profit and loss and $4,875 (November 30, 2024 – $14,625) in investment in film and television properties and payment of such fees was due on or before July 31, 2025 (Note 23). Promissory note On April 25, 2024, as last amended effective April 30, 2024, the Company entered into a Promissory Note agreement with certain Directors of the Company for a loan (the “Loan”) of up to $650,000. The Loan bears interest of 12% per annum and is secured by a general security interest over the assets and undertakings of the Company. Additionally, the Directors of the Company have agreed to a postponement and assignment of claim in favour of the line of credit lender (Note 11). As consideration for an amendment to the Loan, the Directors would receive a fee of $32,500, which was due on or before April 30, 2024. As at November 30, 2024, the fee was recorded in promissory note and as a financing expense in profit or loss and was paid during the year ended November 30, 2024. August 31, August 31, 2025 2024 Short-term employee benefits 536,181 $ 756,431 $ Share-based payments 17,092 42,678 553,273 $ 799,109 $ Recorded as: General and administrative expenses 36,000 $ 36,000 $ Share-based payments 17,092 42,678 Production costs 126,703 306,301 Investment in film and television properties 373,478 414,130 553,273 $ 799,109 $ Nine month period ended NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 18 13. Related parties (continued) Promissory note (continued) The Loan was due on April 30, 2024 and if not repaid by such date, the Directors would receive a further $65,000 as an EP fee which has been recorded in production costs in profit and loss during the year ended November 30, 2024 (Note 13(c)). Pursuant to an amendment, the Company and the Directors of the Company agreed upon an extension to July 31, 2025 at an interest rate of 12% per annum. As consideration, the Directors would receive an executive producer fee of $19,500 for every 12-month period the Promissory Note is outstanding, in lieu of incremental interest at a rate of 15%. During the nine month period ended August 31, 2025, $Nil (November 30, 2024 – $4,875) was paid and has been recorded in production costs in profit and loss and $19,500 (November 30, 2024 – $14,625) has been recorded in accounts payable and accrued liabilities and is included in investment in film and television properties (Note 13(c)). As at August 31, 2025 and November 30, 2024 the Company has drawn upon the total Loan of $650,000. During the nine month period ended August 31, 2025, the Company recorded $58,553 (2024 – $40,496) in interest and financing expense on the Promissory Note. As at August 31, 2025, a total of $71,549 (November 30, 2024 – $12,996) in interest and financing expense has been recorded in accounts payable and accrued liabilities (Note 23). 14. Share capital and share-based payment reserve (a) Authorized The Company has an unlimited number of authorized common shares and preferred shares with no par value. (b) Issued share capital The Company did not --- issue any common shares during the nine month period ended August 31, 2025 and year ended November 30, 2024. (c) Share-based payment reserve Pursuant to the Company’s equity-settled stock option plan, as last amended on April 4, 2024, the Board of Directors may, from time to time, authorize the granting of options to Directors, employees and consultants of the Company to a maximum of 20% of the then outstanding shares of the Company which is limited to a maximum of 3,564,940 options as approved by the shareholders of the Company. Options granted under the plan have contractual option terms not exceeding 10 years and vesting periods as determined by the Company’s Board of Directors. During the nine month period ended August 31, 2025, 85,000 (2024 – 10,000) stock options were cancelled or expired, resulting in a reclassification of amounts totalling $55,276 (2024 – $2,568) from share-based payment reserve to deficit. During the year ended November 30, 2024, all of the issued and outstanding stock options were amended to an exercise price of $0.30 per share and an expiration date of April 4, 2029. NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 19 14. Share capital and share-based payment reserve (continued) (c) Share-based payment reserve (continued) As at August 31, 2025, the following stock options are outstanding and exercisable: The Company did not grant any stock options during the nine month period ended August 31, 2025 or during the year ended November 30, 2024. The Company uses the Black-Scholes option-pricing model to determine the estimated fair value at the grant date of the options issued. In all the calculations the annual dividend yield was assumed to be $Nil, and expected volatility was based on historical volatility of the Company’s share price. All other weighted-average assumptions are summarized below: *Weighted average inputs to determine the fair value of amended options. For the nine month period ended August 31, 2025, the Company recognized share-based payments expense in relation to vested stock options of $27,023 (2024 – $94,920), which is included in profit or loss. Share-based payment reserve consists of the following amounts: Weighted Weighted Number of Ave. Exercise Number of Ave. Exercise Options Price Options Price Outstanding, beginning of period 2,696,333 0.30 $ 2,706,333 0.69 $ Cancelled (85,000) 0.30 $ (10,000) 0.30 $ Outstanding, end of period 2,611,333 0.30 $ 2,696,333 0.30 $ As at August 31, 2025 As at November 30, 2024 Number of options outstanding Number of options exercisable Exercise price Remaining life (yrs) Expiry 2,611,333 2,584,667 0.30 $ 3.59 April 4, 2029 Grant date / Amendment Options granted Exercise price Share price Annual volatility rate Risk free interest rate Fair value at grant date Expected life 2024* 2,706,333 0.30 $ 0.24 $ 98% 3.58% 0.24 $ 5.0 August 31, November 30, 2025 2024 Outstanding stock options 1,584,157 $ 1,612,410 $ Convertible debt 134,326 134,326 Share exchange for Network Entertainment Inc. (302,651) (302,651) 1,415,832 $ 1,444,085 $ NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 20 15. Revenue Of the Company’s $5,366,881 (2024 – $7,971,885) in revenue for the nine month period ended Augus --- t 31, 2025, $259,897 (2024 – $5,473,025) was attributable to external customers located in Canada, $4,915,147 (2024 – $2,424,323) was attributable to external customers located in the U.S., and $191,837 (2024 – $74,537) was attributable to other external customers. The Company had four customers (2024 – three customers) whose revenue individually represented 10% or more of the Company’s total revenue from contracts with customers. For the nine month period ended August 31, 2025, those four customers accounted for 85% of this revenue (2024 – three customers accounted for 92% of revenue). August 31, August 31, August 31, August 31, 2025 2024 2025 2024 Revenue recognized at a specific point in time Distribution revenue 880,000 $ 16,024 $ 1,130,287 $ 138,033 $ Production revenue - - 1,194,613 - 880,000 16,024 2,324,900 138,033 Contract production services revenue 1,969,848 2,820,076 3,041,981 7,833,852 Total revenue 2,849,848 $ 2,836,100 $ 5,366,881 $ 7,971,885 $ Nine month period ended Three month period ended Revenue recognized when performance obligations are satisfied over time NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 21 16. Expenses by nature The following sets out certain expenses by nature: August 31, August 31, August 31, August 31, 2025 2024 2025 2024 Insurance 13,179 $ 12,973 $ 38,249 $ 29,987 $ Interest and bank charges 29,429 21,529 72,898 63,851 Office and general 17,680 46,742 84,831 137,066 Professional fees 24,648 26,318 122,772 100,535 Salaries and wages 55,039 108,467 276,439 274,862 Technology and licenses 4,163 400 4,950 3,909 Telecommunications 2,862 920 8,298 6,967 Transfer agent and filing fees 10,821 13,578 34,726 35,583 Travel 10,088 32,481 23,760 40,576 General and administrative 167,909 $ 263,408 $ 666,923 $ 693,336 $ Distribution and relicensing 180,747 $ - 184,949 $ 82,673 $ Media and advertising 2,523 - 9,525 - Royalty payments - 15,049 - 15,049 Selling and distribution 183,270 $ 15,049 $ 194,474 $ 97,722 $ Nine month period ended Three month period ended NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 22 17. Supplemental statement of net and comprehensive loss disclosure (a) Employee benefit expenses Total salaries and wages recognized in profit or loss for the nine month period ended August 31, 2025 is $1,533,448 (2024 – $1,906,952) of which $1,257,009 was recorded as production costs (2024 – $1,632,090) and $276,439 was recorded as general and administrative (2024 – $274,862). (b) Financing expense Financing expense is comprised of the following: 18. Supplemental cash flow information i. Non-cash investing and financing activities ii. Interest and income taxes paid Interest paid during the nine month period ended August 31, 2025 was $71,961 (2024 – $261,069). The Company paid $Nil (2024 – $4,313) in income taxes during the nine month period ended August 31, 2025. Interest expense on line of credit 4,376 6,274 13,557 $ 18,834 $ Interest expense on production financing 16,623 3,759 68,523 17,946 Interest expense on lease obligations 4,305 9,937 19,202 26,318 Interest expense on debt payable 2,931 12,432 14,780 39,905 Interest and financing expense on promissory note 19,660 (46,729) 58,553 58,767 Financing expense 47,895 $ (14, --- 327) $ 174,615 $ 161,770 $ Nine month period ended Three month period ended August 31, 2024 August 31, 2024 August 31, 2025 August 31, 2025 Tax credits receivable included in production costs $ 3,445,339 3,113,764 $ Amount included in prior year projects in progress transferred to productions completed and released $ 1,288,047 - $ Accounts payable included in production costs $ 809,913 2,034,279 $ Fair value of cancelled or expired stock options $ 55,276 2,568 $ Nine month period ended August 31, 2024 August 31, 2025 NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 23 18. Supplemental cash flow information (continued) iii. Reconciliation of liabilities arising from financing activities 19. Government assistance Refundable tax credits relating to production activities of the Company are claimed from the federal and provincial governments in Canada. The refundable tax credits for the nine month period ended August 31, 2025, were recorded as follows: • Reduction to investment in film and television properties of $1,054,351 (2024 – $1,446,719); and • Reduction to production costs of $827,364 (2024 – $141,417). Nine month period ended August 31, 2024: Cash flows Line of credit 285,000 $ (3,834) $ 18,834 $ - $ - $ - $ 300,000 $ Production financing 1,574,755 (1,043,606) 17,946 - - - 549,095 Lease obligations 148,319 (262,811) 26,318 516,323 74,245 157,529 659,923 Debt payable 795,000 (384,905) 39,905 - - - 450,000 Promissory note 695,536 (91,053) 58,767 - - - 663,250 Total liabilities from financing activities 3,498,610 $ (1,786,209) $ 161,770 $ 516,323 $ 74,245 $ 157,529 $ 2,622,268 $ Opening balance Ending balance Sale and leaseback Non-cash changes Accrued interest and financing expense Additions Lease modifications Nine month period ended August 31, 2025: Cash flows Line of credit 295,000 $ (28,557) $ 13,557 $ - $ - $ 280,000 Production financing 1,234,243 (195,728) 75,746 - 559,418 1,673,679 Lease obligations 608,473 (279,096) 19,202 26,946 - 375,525 Debt payable 375,000 (239,780) 14,780 - - 150,000 Promissory note 662,996 - 58,553 - - 721,549 Total liabilities from financing activities 3,175,712 $ (743,161) $ 181,838 $ 26,946 $ 559,418 $ 3,200,753 $ Opening balance Ending balance Production financing obligation Accrued interest and financing Lease modification Non-cash changes NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 24 20. Financial instruments The Company’s financial assets and liabilities are classified as follows: Financial instrument Classification Cash Restricted cash Amortized cost Amortized cost Receivables from broadcasters Amortized cost Line of credit Amortized cost Accounts payable and accrued liabilities Amortized cost Production financing Amortized cost Debt payable Amortized cost Promissory note Amortized cost The fair values of the Company’s financial instruments approximate the carrying values, due to their short terms to maturity or attached market rates of interest. The Company has no financial instruments measured at FVTPL. The fair values of the Company’s financial instruments approximate the carrying values, due to their short terms to maturity or attached market rates of interest. The Company classifies the fair value of these tran --- sactions according to a hierarchy that prioritizes the inputs to fair value measurement. The three levels of the fair value hierarchy are: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 – Inputs that are not based on observable market data. Risks arising from financial instruments The Company is exposed to various risks related to its financial instruments as follows: (i) Market risk Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will affect the Company’s net income and the value of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable limits, while maximizing returns. Market risk is comprised of foreign exchange risk, interest rate risk and other price risk. The Company is not exposed to material other price risk. The Company's exposure to market risk is as follows: Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has not entered into foreign exchange purchase contracts to manage its foreign exchange risk, because, in management’s view, the cost of setting up the contracts is in excess of the risks associated with a sudden change in the exchange rates. Management continually monitors the exchange rates and will enter into risk prevention measures when warranted. NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 25 20. Financial instruments (continued) (i) Market risk (continued) Currency risk (continued) A five percent fluctuation in the U.S. dollar rate impacting U.S. dollar revenues during the nine month period ended August 31, 2025 would result in a $140,209 (2024 – $124,943) impact to profit or loss. The Company is also exposed to currency risk on its cash, accounts receivable and accounts payable balances that are denominated in U.S. dollars, being, respectively, $1,833,793 (November 30, 2024 – $1,309,614), $1,257,423 (November 30, 2024 – $966,816) and $287,045 (November 30, 2024 – $894,786). A five percent fluctuation in the U.S. dollar closing rate at August 31, 2025 would result in a net change to profit or loss of $255,349 (2024 – $53,597). The Company's exposure to and management of foreign exchange risk, has not changed materially from that of the prior year. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate risk arises on interest-bearing financial instruments recognized in the consolidated statement of financial position such as line of credit, interim financing, debt payable and promissory note. If the market interest rates had changed 100 basis points, the Company’s cost of capital would have fluctuated by $59,920 (2024 – $59,090). The Company's exposure to and management of interest rate risk has not changed materially from that of the prior year. (ii) Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. T --- he Company is subject to credit risk with respect to cash and accounts receivable. The Company’s maximum exposure to credit risk at the end of the reporting period is the carrying value of these assets. Substantially all of the Company’s customers are in the entertainment industry and are subject to normal industry credit risks. Credit risk is managed through a credit approval process and monitoring procedures, and there are no expected credit losses. All cash balances are held at a major Canadian banking institution. As at August 31, 2025, four broadcasters (November 30, 2024 – three) represented receivables from broadcasters, as such, the Company is exposed to concentration of credit risk for receivables. As of August 31, 2025, there are $29,687 (November 30, 2024 – $158,824) of accounts receivable due over 61 days, but not considered impaired. Refer to Note 3 for a breakdown. The Company's exposure to and management of credit risk has not changed materially from that of the prior year. NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 26 20. Financial instruments (continued) (iii) Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company’s liquidity needs can be met through a variety of sources. The Company generates cash from operations, by borrowing against earned tax credits through interim financing, and by issuances of common shares. The Company manages liquidity risk by continuously monitoring actual and forecast cash flows. The Company will require additional capital in order to meet the payment expectations related to its debts. Accounts payable and accrued liabilities are due on standard commercial terms. The timing of payments required for accounts payable and debt in the next 5 years, by year, is as follows: The Company's exposure to and management of liquidity risk has not changed materially from that of the prior year. 21. Capital management The Company’s objectives when managing capital are to safeguard its assets, maintain a competitive cost structure, continue as a going concern in order to pursue the development of its film and television properties, and provide a return to its shareholders in the form of capital appreciation. The Company defines capital as the aggregate of its shareholders’ equity and long-term debt less cash. Capital as at August 31, 2025 was $8,658,068 (November 30, 2024 – $8,973,692). In order to facilitate management of capital, the Company continues to prepare annual expenditure budgets that are updated as necessary and dependent on various factors, including successful deployment of capital and industry conditions. The annual and updated budgets are approved by the Board of Directors. There were no changes in the Company’s approach to capital management during the nine month period ended August 31, 2025. The Company is subject to an externally imposed capital requirement (Note 11). 22. Contingent liabilities The Company and its subsidiaries may from time to time, be a party to certain legal disputes and claims arising from employment or commercial issues in the normal course of business. During the nine month period ended August 31, 2025, the Company received notice of two infringement legal claims --- . The amount and timing of settlement of these claims are unknown as at the date of approval of these consolidated financial statements. 2025 2026 2027 2028 2029 Line of credit 280,000 $ - $ - $ - $ - $ Accounts payable and accrued liabilities 4,577,780 14,711 5,604 16,812 32,421 Production financing 1,673,679 - - - - Debt payable 150,000 - - - - Promissory note 721,549 - - - - 7,403,008 $ 14,711 $ 5,604 $ 16,812 $ 32,421 $ NETWORK MEDIA GROUP INC. Notes to the Condensed Interim Consolidated Financial Statements For the nine month period ended August 31, 2025 and 2024 Expressed in Canadian dollars (Unaudited) 27 22. Contingent liabilities (continued) The Company and its subsidiaries may, from time to time, enter into royalty or rights agreements for the use of images, stock footage, names and similar items. The Company is liable to pay for the use of these rights contingent on achieving particular production milestones. As these milestones are achieved, the Company accrues the related royalties and rights payable which are no longer contingent. 23. Subsequent events Subsequent to August 31, 2025, the Company: (a) Received interim production financing of $125,000 (Note 9); (b) Closed a non-brokered private placement of unsecured convertible debentures for gross proceeds of $350,000. The convertible debenture bears interest at 12% per annum and is convertible at any time before maturity, at the option of the holder, into common shares of the Company at $0.50 per share for a term of 2 years from the date of issuance. Closing of the transaction was subject to certain conditions, including the approval and consent of the TSX Venture Exchange (the “TSX-V”), which was subsequently received; and (c) The Company entered into a Debt Settlement Agreement with certain Directors of the Company, pursuant to which $350,000 of the total outstanding principal of the Loan was repaid. The remaining principal balance of $300,000 was converted into an unsecured convertible debenture. See Note 13. The convertible debenture bears interest at 12% per annum and is convertible at any time before maturity, at the option of the holder, into common shares of the Company at $0.50 per share for a term of 2 years from the date of issuance. Concurrently, the Company issued a total of 1,150,000 common shares to certain Directors of the Company, at a deemed price of $0.15 per common share in full settlement and final payment of all other amounts owing for EP fees and interest totaling $279,424 (Note 13). Closing of the transaction was subject to certain conditions, including the approval and consent of the TSX-V, which was subsequently received.