SEDAR Interim Financial Statements

STEEP HILL INC. CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 UNAUDITED (Expressed in Canadian Dollars) NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed an audit or review of these condensed interim consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada. - 1 - Steep Hill Inc. Condensed Interim Consolidated Statements of Financial Position Unaudited (Expressed in Canadian dollars) NATURE OF OPERATIONS AND GOING CONCERN (Note 1) COMMITMENTS (Note 12) SUBSEQUENT EVENTS (Note 14) Approved on behalf of the board of directors: “Ian Morton” “Jane Wright-Mitchell” Director Director The accompanying notes are an integral part of these condensed interim consolidated financial statements. As at Note September 30, 2025 December 31, 2024 Assets Current Cash 10 181,338 $ 213,927 $ Term deposits 4 1,850,000 2,000,000 Prepaids 19,271 18,678 Accounts receivable and other 5 26,334 43,759 Total Assets 2,076,943 $ 2,276,364 $ Liabilities Current Accounts payable and accrued liabilities 6,9,10 162,298 $ 254,613 $ Income tax payable 10 - 3,949 Total Liabilities 162,298 258,562 Shareholders' Equity Share capital 7 12,012,773 12,012,773 Reserves 8 144,553 104,660 Accumulated other comprehensive loss - (23,585) Deficit (10,242,681) (10,076,046) Total Shareholders' Equity 1,914,645 2,017,802 Total Liabilities and Equity 2,076,943 $ 2,276,364 $ - 2 - Steep Hill Inc. Condensed Interim Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income Unaudited (Expressed in Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. Note 2025 2024 2025 2024 Restated (Note 13) Expenses Amortization of property, plant and equipment - $ 3,843 $ - $ 11,529 $ Consulting fees 9 36,154 7,020 77,285 84,525 Office and general expenses 13,387 12,219 29,751 66,074 Professional fees 19,591 13,527 55,313 40,091 Regulatory, filing and listing fees 4,838 3,827 22,832 19,381 Salaries and wages - - - 2,929 Share-based compensation 8 64,610 - 64,610 - Loss before other (expenses) income (138,580) (40,436) (249,791) (224,529) Other (expenses) income Interest income 8,269 11,212 30,584 35,494 Foreign exchange (loss) gain (12,621) 8,696 (12,496) (23,081) Net loss from continuing operations (142,932) (20,528) (231,703) (212,116) Discontinued operations Net income from discontinued operations 10 20,580 266,648 40,351 373,894 Net income from discontinued operations 20,580 266,648 40,351 373,894 Net (loss) income (122,352) 246,120 (191,352) 161,778 Other comprehensive (loss) income Foreign currency translation adjustment from discontinued operations 10 12,017 (3,474) 14,028 (6,991) (110,335) $ 242,646 $ (177,324) $ 154,787 $ Weighted average number of shares outstanding - basic and diluted 16,178,653 16,189,641 16,178,653 16,178,653 Basic and diluted net (loss) income per share - Continuing op --- erations (0.01) $ (0.00) $ (0.01) $ (0.01) $ - Discontinued operations 0.00 0.02 0.00 0.02 Basic and diluted net (loss) income per share (0.01) $ 0.02 $ (0.01) $ 0.01 $ For the three months ended September 30, For the nine months ended September 30, Net (loss) income and comprehensive (loss) income - 3 - Steep Hill Inc. Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity Unaudited (Expressed in Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. Number of Shares Share Capital Share Based Payments Warrants Accumulated Other Comprehensive (Loss) Income Deficit Total Shareholders' Equity Balance, December 31, 2024 16,178,653 $ 12,012,773 $ 104,660 $ - $ (23,585) $ (10,076,046) $ 2,017,802 Options expired - - (24,717) - - 24,717 - Share-based compensation (Note 8) - - 64,610 - - - 64,610 Other comprehensive income - - - - 14,028 - 14,028 Net loss from continuing operations - - - - - (231,703) (231,703) Reclassification of cumulative translation adjustment on dissolution of discontinued operations - - - - 9,557 - 9,557 Net income from discontinued operations - - - - - 40,351 40,351 Balance, September 30, 2025 16,178,653 12,012,773 $ 144,553 $ $ - $ - (10,242,681) $ 1,914,645 $ Balance, December 31, 2023 16,178,653 $ 12,012,773 $ 143,477 $ 215,847 $ (52,514) $ (10,668,424) $ 1,651,159 Warrants expired - - - (215,847) - 215,847 - Other comprehensive loss - Restated (Note 13) - - - - (6,991) - (6,991) Net loss from continuing operations - - - - - (212,116) (212,116) Net income from discontinuing operations - Restated (Note 13) - - - - - 373,894 373,894 Balance, September 30, 2024 16,178,653 12,012,773 $ 143,477 $ $ - (59,505) $ (10,290,799) $ 1,805,946 $ RESERVES - 4 - Steep Hill Inc. Condensed Interim Consolidated Statements of Cash Flows Unaudited (Expressed in Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. Note 2025 2024 Restated (Note 13) Operating activities Net loss for the period (191,352) $ 161,778 $ Net income from discontinued operations 10 40,351 373,894 Net loss from continuing operations (231,703) $ (212,116) $ Non-cash items: Amortization of property, plant and equipment - 11,529 Share-based compensation 8 64,610 - Foreign exchange loss 12,496 23,081 Changes in non-cash working capital items: Prepaids (593) 7,192 Accounts receivable and other 5 17,425 54,924 Accounts payable and accrued liabilities 6 10,823 (163,517) Income tax payable (3,949) - Cash used in operating activities - continuing operations (130,891) (278,907) Cash used in operating activities - discontinuing operations (48,522) (75,214) Cash used in operating activities (179,413) (354,121) Investing activity Redemption of term deposit 4 150,000 - Cash generated from investing activity 150,000 - Financing activity: Payments of lease liability - (15,603) Cash used in financing activity - (15,603) Decrease in cash during the period (29,413) (369,724) Effects of exchange rate changes on cash - discontinuing operations (3,176) (3,745) Cash, beginning of the period 213,927 613,412 Cash, end of the period 181,338 $ 239,943 $ For the nine months ended September 30, Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For the Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars) - 5 - 1. NATURE OF OPERATIONS AND GOING CONCERN Steep Hill Inc. (the “C --- ompany” or “Steep Hill”) was incorporated under the Canadian Business Corporations Act on October 4, 2018. On February 28, 2022, the Company changed its name from Canbud Distribution Corporation to Steep Hill Inc. The Company is a publicly listed company on the Canada Securities Exchange ("CSE") and trades under the ticker symbol “STPH”. The Company is domiciled in Canada and its registered office is located at 30 Commercial Road, East York, Ontario, M4G 1Z4. The Company was incorporated to provide hemp-based science-backed differentiated products and services, including analytical testing services within the hemp and cannabis market sectors in Canada. In the beginning of January 2022, the Company began its operation in United States, through acquisition of Steep Hill, Inc. (“Steep Hill US”), a cannabis-science company focused on research and development, licensing, and consulting services in United States. In March 2023, the Company terminated all the licensing agreements in Steep Hill US and subsequently, shut down its operation. Consequently, the Company has no operations in Canada and US. These condensed interim consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. The Company's ability to continue as a going concern is dependent upon its ability to attain profitable operations and generate funds to meet current and future obligations. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due. The Company has not yet achieved profitable operations and incurred a net loss from continuing operations of $231,703 (September 30, 2024 - $212,116 (Restated (Note 13)) during the nine months ended September 30, 2025, and the Company has an accumulated deficit of $10,242,681(December 31, 2024 - $10,076,046). As at September 30, 2025, the Company has a working capital of $1,914,645 (December 31, 2024 - $2,017,802) and for the nine months ended September 30, 2025, the cash flows used in operating activities from continuing operations was $130,891 (September 30, 2024 - $278,907 (Restated (Note 13))). These conditions along with whether, and when, the Company can attain profitability and positive cash flows from operations has material uncertainty, which may cast significant doubt upon the Company's ability to continue as going concern. The application of the going concern assumption is dependent upon the Company's ability to generate future profitable operations and by raising capital to fund its operations. Accordingly, these condensed interim consolidated financial statements do not give effect to adjustments, if any, that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities in other than the normal course of business and at amounts which differ from those shown in these condensed interim consolidated financial statements. 2. BASIS OF PREPARATION Statement of Compliance These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standard 34 Interim Financial Reporting (“IAS 34”) as issued by the International Accoun --- ting Standards Board (“IASB”) and do not include all the information required for full annual consolidated financial statements required by IFRS as issued by the IASB and interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”). These condensed interim consolidated financial statements should be read in conjunction with the Company’s audited annual financial statements for the year ended December 31, 2024. Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For The Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars) - 6 - 2. BASIS OF PREPARATION (continued) These condensed interim consolidated financial statements were approved by the Board of Directors and authorized for issue on November 28, 2025. Basis of measurement These condensed interim consolidated financial statements have been prepared on the historical cost basis. Basis of consolidation These condensed interim consolidated financial statements include the account of the Company and its subsidiary controlled by the Company from the date that control commenced until the date that control ceases. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity and expose itself to the variable returns from the entity’s activities. The Company had one wholly owned subsidiary, Steep Hill US, which was acquired through an acquisition in January 2022 and subsequently dissolved on September 30, 2025 (Note 10). Steep Hill US was incorporated and registered in the state of Delaware, United States. Intercompany balances, and any unrealized gains and losses or income and expenses arising from transactions with subsidiary, are eliminated in preparing these condensed interim consolidated financial statements. Unrealized losses are eliminated to the extent of the gains, but only to the extent that there is no evidence of impairment. Functional and presentation currency The condensed interim consolidated financial statements and the accompanying notes are presented in Canadian dollars, unless otherwise noted. The Company’s functional currency (the currency of the primary economic environment in which the Company operates in) is Canadian dollars while the Company’s subsidiary, Steep Hill US, functional currency is U.S. dollars. 3. MATERIAL ACCOUNTING POLICIES The material accounting policies followed in the condensed interim consolidated financial statements for the nine months ended September 30, 2025 and 2024 are consistent with those applied in the Company’s audited consolidated financial statements for the year ended December 31, 2024. Adoption of new standards, interpretations and amendments There was no new standards effective January 1, 2025 that impacted these condensed interim financial statements. Recent accounting pronouncements and changes in accounting policies The IASB has issued the following new standard and amendment that have not yet been adopted by the Company and could have an impact on future periods. The Company is in the process of reviewing these changes to determine the impact on the condensed interim consolidated financial statements. ? IFRS 18, Presentation and Disclosure in Financial Statements replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces three sets of new requirements to improve companies' reporting of financial performance and give investors a better basis for analyzin --- g and comparing companies. The new standard is effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted. Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For The Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars) - 7 - 4. TERM DEPOSITS Term deposits of $1,850,000 (December 31, 2024 - $2,000,000) are held at a reputable banking institution. These deposits bear interest ranging from 2.00 to 2.25% (December 31, 2024 - 2.25%) per annum and have a term of 12 months and are redeemable on demand. 5. ACCOUNTS RECEIVABLE AND OTHER As at September 30, 2025 December 31, 2024 Interest receivable $ 18,337 $ 35,138 Harmonized Sales Tax recoverable 7,997 8,621 Total $ 26,334 $ 43,759 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES As at September 30, 2025 December 31, 2024 Accounts payable $ 76,519 $ 225,143 Accrued liabilities 85,779 29,470 Total $ 162,298 $ 254,613 7. SHARE CAPITAL The Company is authorized to issue an unlimited number of common shares. Number of shares Amount Balance, December 31, 2023, December 31, 2024 and September 30, 2025 16,178,653 $ 12,012,773 Net loss per share Basic net loss per share is calculated by dividing the loss attributable to shareholders of the Company by the weighted average number of shares outstanding, made up of common shares. Diluted net loss per share is calculated by adjusting the loss for the period and number of shares for the effects of dilutive options and other dilutive potential ordinary shares. However, there were no options, warrants or financial instruments with dilutive potential ordinary shares as at September 30, 2025 (September 30, 2024 – Nil). Thus, the diluted net loss per share was the same as the calculated basic net loss per share. The weighted average number of shares outstanding used in the computation of net loss per share for the nine months ended September 30, 2025 was 16,178,653 (September 30, 2024 – 16,178,653). For the nine months ended September 30, 2025 2024 Restated (Note 13) Loss from continuing operations $ (231,703) $ (212,116) Income from discontinued operations $ 40,351 $ 373,894 Basic and diluted net (loss) income per share - Continuing operations $ (0.01) $ (0.01) - Discontinued operations 0.00 0.02 Total basic and diluted net (loss) income per share $ (0.01) $ 0.01 Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For The Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars) - 8 - 8. RESERVES Reserves include (i) the accumulated fair value of stock options recognized as share-based compensation, and (ii) the fair value of warrants issued in private placements and for share issue costs. Reserves are increased by the fair value of these items as they vest and are reduced by corresponding amounts when the options or warrants expire or are exercised or cancelled. SHARE-BASED COMPENSATION The Company has a common share 10% Rolling Plan (the “Plan”) for designated directors, officers, employees, and consultants. Pursuant to the Plan, option awards are recommended by the Compensation Committee of the Board and then reviewed by the Board of Directors. Under the Plan, options on common shares may be issued for up to a cumulative amount that may not exceed 10% of shares outstanding at any given time. The following table summarizes the continuity of stock options: Number of options Weighted average exercis --- e price $ Outstanding, December 31, 2023 213,667 1.38 Expired (i) (30,000) 1.69 Outstanding, December 31, 2024 183,667 1.34 Expired (116,667) 1.20 Issued (ii) 1,300,000 0.65 Outstanding, September 30, 2025 1,367,000 0.14 (i) During the year ended December 31, 2024, 30,000 options expired as a result of the option holders no longer holding an active position within the Company. (ii) On August 19, 2025, the Company granted 1,300,000 stock options to its directors, officers and consultants, vested immediately and exercisable at $0.065 per share for five years. The fair value of the options granted was valued at $64,610 using the Black-Scholes option pricing model, with the following assumptions: Volatility – 149.14%, Expected life – 5 years, Risk-free interest rate: 2.95%, Forfeiture rate – 0% and Expected dividend yield – 0%. During the nine months ended September 30, 2025, the Company recognized a total of $64,610 (2024 - $Nil) of share-based compensation. The following stock options are outstanding and exercisable as at September 30, 2025: Options outstanding and exercisable Exercise price $ Number of Options Remaining contractual life in years Weighted average exercise price $ 1.88 13,333 0.15 0.02 1.50 53,667 0.85 0.06 0.065 1,300,000 4.89 0.06 1,367,000 4.68 0.14 Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For The Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars) - 9 - 8. RESERVES (continued) WARRANTS Warrant activity is presented below: Number of warrants Weighted average exercise price $ Outstanding, December 31, 2023 263,920 4.50 Expired (263,920) 4.50 Outstanding, December 31, 2024 and September 30, 2025 - - 9. RELATED PARTY TRANSACTIONS Compensation awarded to key management personnel The Company has defined key management personnel as senior executive officers, as well as the Board of Directors. The total remuneration of key management personnel and the Board of Directors in the continued and discontinued operations are as follows: For the nine months ended September 30, 2025 2024 Salaries, benefits and consulting fees $ 49,450 $ 142,855 Director fees - (6,000) $ 49,450 $ 136,855 As of September 30, 2025, the Company had $24,436 (December 31, 2024 - $44,805) of unpaid consulting fees to key management personnel included in accounts payable and accrued liabilities. During the nine months ended September 30, 2025, the Company incurred document storage fees of $Nil (September 30, 2024 - $12,000) and consulting fees of $10,950 (September 30, 2024 - $34,275) from Summerhill Group Inc (“SGI”). SGI is a company in which the Company’s Chairman and director, Ian Morton, is the majority shareholder. 10. DISCONTINUED OPERATIONS Steep Hill US In March 2023, the Company, through Steep Hill, Inc., entered into settlement and release agreements with various licensees to terminate the license agreements. Following the settlement agreements, the Company determined that Steep Hill, Inc.’s operations were no longer commercially sustainable and subsequently ceased its U.S. operations. Accordingly, the operating results and operating cash flows of Steep Hill, Inc.’s are presented as discontinued operations, separate from the Company’s continuing operations, until its dissolution on September 30, 2025 (Note 2). Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For The Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars --- ) - 10 - 10. DISCONTINUED OPERATIONS (continued) The assets and liabilities of the discontinued operations are as follows: Net income of the discontinued operations is as follows: (i) During the nine months ended September 30, 2025, the Company recognized a gain on extinguishment of accounts payable and accrued liabilities in the amount of $164,392 (September 30, 2024 - $400,154), which has been included in other income within net income from discontinued operations. (ii) Steep Hill US was dissolved on September 30, 2025. As a result, the Company deconsolidate Steep Hill US by removing Steep Hill US’s carrying value of assets and liabilities from the Company’s consolidated statements of financial position. The Company recognized a loss on deconsolidation of $9,557 within the net income from discontinued operations in the consolidated statement of (loss) income and comprehensive (loss) income for the nine months ended September 30, 2025. Net cashflows from discontinued operations: As at September 30, 2025 December 31, 2024 Assets Cash - $ 48,522 $ Total assets of discontinued operations - $ 48,522 $ Liabilities Accounts payable and accrued liabilities - $ 169,079 $ Income tax payable - 3,949 Total liabilities of discontinued operations - $ 173,028 $ 2025 2024 Restated (Note 13) Expenses Consulting, salaries and wages 61,954 $ 80,553 $ Office and general expenses 20,852 (54,293) Professional fees 31,678 - Loss before other income (114,484) (26,260) Other Income Gain on extinguishment of accounts payable and accrued liabilities (i) 164,392 400,154 Loss on dissolution of discontinued operations (ii) (9,557) - Net income from discontinued operations 40,351 373,894 Other comprehensive income (loss) Foreign currency translation adjustment 14,028 (6,991) 54,379 $ 366,903 $ For the nine months ended September 30, discontinued operations Net income and comprehensive income from 2025 2024 Cash used in operating activities - discontinued operations (48,522) $ (75,214) $ For the nine months ended September 30, Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For The Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars) - 11 - 11. FINANCIAL RISK MANAGEMENT The Company's objective is to maintain sufficient capital to maintain investor, creditor and customer confidence and to sustain future development of the business and to provide the ability to continue as a going concern. Management defines capital as the Company's shareholders' equity. The Board of Directors does not establish quantitative return on capital criteria for management. The Company has not paid any dividends to its shareholders. The Company is not subject to any externally imposed capital requirements. As at September 30, 2025, the Company's total managed capital comprised of $1,914,645 (December 31, 2024 - $2,017,802). There were no changes in the Company's approach to capital management during the period. (a) Fair value Financial instruments included in the condensed interim consolidated statement of financial position as at September 30, 2025 and 2024 consist of cash, term deposits, accounts receivable and other, and accounts payables and accrued liabilities with period-end carrying amounts which approximates their respective fair values. (b) Interest rate risk The Company does not have any debts or borrowings from any banks or institutional lenders as at September 30, 2025. (c) Currency risk As the Company operated in th --- e United States (U.S.) during the period up to the dissolution of Steep Hill US (Note 10), certain of the Company’s assets, liabilities, and transactions were denominated in United States funds. As at September 30, 2025, the Company had no net monetary assets or liabilities denominated in U.S. funds and therefore, is exposed to minimal foreign currency risk. (d) Credit risk Credit risk is the risk of loss associated with the counterparty's inability to fulfil its payment obligations. Financial instruments that potentially subject the Company to concentrations of credit risks consist principally of cash, term deposits and trade receivables and other. All of the Company’s cash and term deposits are held at financial institutions which are Canadian Chartered Banks in which management believes that the risk of loss is minimal, but the Company is subject to concentration of credit risk. As of September 30, 2025 and December 31, 2024, the Company had no trade and other receivables. (e) Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivery of cash or another financial asset. The Company manages the liquidity risk resulting from accounts payable and accrued liabilities by ensuring that it documents when authorized payments are due and maintaining adequate cash reserves to meet its obligations as they come due. Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For The Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars) - 12 - 11. FINANCIAL RISK MANAGEMENT (continued) The Company has the following undiscounted contractual obligations as at September 30, 2025 and December 31, 2024, which are expected to be payable in the following respective periods: September 30, 2025 Within 1 year Over 1 year Total Accounts payable and accrued liabilities $ 162,298 - $ 162,298 December 31, 2024 Within 1 year Over 1 year Total Accounts payable and accrued liabilities $ 254,613 - $ 254,613 As of September 30, 2025, the Company had cash of $181,338 (December 31, 2024 - $213,927), term deposits of $1,850,000 (December 31, 2024 - $2,000,000) and total equity attributable to the equity holders of the Company of $1,914,645 (December 31, 2024 - $2,017,802). The Company manages its capital structure and makes adjustments in light of changes in its economic environment and the risk characteristics of the Company’s assets. To effectively manage the entity’s capital requirements, the Company has in place a planning, budgeting, and forecasting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. There are no externally imposed capital requirements to which the Company has not complied. 12. COMMITMENTS On February 12, 2025, the Company entered into a share purchase agreement (the “Purchase Agreement”), with a number of arm's length vendors (the "Vendors") to acquire (the "Acquisition") 100% of the issued and outstanding shares of Lir Life Sciences Inc. ("Lir") in consideration for an aggregate of 136,054,422 common shares of the Company (the "Consideration Shares") at a deemed price of $0.147 per Consideration Share. The Acquisition would represent a reverse take-over of the Company. On July 3, 2025, the Company terminated the Purchase Agreement with Lir. 13. RESTATEMENT OF PRIOR PERIOD COMPARATIVES The Comp --- any has restated its comparative financial results to correct the accounting treatment of certain accounts payable that were statute-barred and no longer legally enforceable. Following a detailed legal review, management concluded that these liabilities met the criteria for derecognition under IFRS, as the obligations have effectively expired as of September 30, 2024. As a result, the Company has recognized a gain on extinguishment of accounts payable and accrued liabilities totaling $400,154 in the comparative period. Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For The Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars) - 13 - 13. RESTATEMENT OF PRIOR PERIOD COMPARATIVES (continued) The following summarizes the impact of the restatement on the affected line items in the condensed interim consolidated financial statements: These restatements have no impact on the condensed interim consolidated statements of financial position presented in these financial statements, as those statements exclude balances as of September 30, 2024. The condensed interim consolidated statements of cash flows for period ending September 30, 2024 reflect an increase in the net income for the period by $400,154 as a result of the increase in net income from discontinued operations for the same $400,154 and a corresponding decrease in cash used in operating activities – discontinuing operations, for a no net impact to the cash used in operating activities after the restatement. These restatements have increased the basic and diluted net (loss) income per share from discontinued operations from ($0.00) to $0.02. These restatements have also impacted the condensed interim consolidated statements of changes in shareholders’ equity for the period ending September 30, 2024 by decreasing the accumulated other comprehensive loss from $56,449 to $59,505 and decreasing the deficit from $10,690,952 to $10,290,798. 14. SUBSEQUENT EVENTS On November 13, 2025, the Company entered into an amalgamation agreement (the "Amalgamation Agreement") dated effective November 12, 2025, with Good Purpose Investments Inc. ("Good Purpose") and 1561117 B.C. Ltd. ("Subco"), a wholly owned subsidiary of the Company incorporated subsequent to September 30, 2025. Under the agreement, the Company will acquire all of the issued and outstanding securities of Good Purpose, through a three-cornered amalgamation involving Subco (the "Transaction"). Good Purpose shareholders will exchange their Good Purpose Shares for post-Consolidation common shares of the Resulting Issuer on a one-for one basis, up to a maximum of 62,005,820. Upon completion, the Transaction will constitute in a reverse takeover of the Company, and the Resulting Issuer's primary business will be that of the business of Good Purpose. In connection with the Transaction, the Company intends to: (i) change its name to "Good Purpose Investments Inc." or another mutually agree name; (ii) change its stock exchange ticker symbol (iii) consolidate its issued and outstanding common shares on the basis of one post-consolidation common shares for every three pre-consolidation common shares of the Company; and (iv) reconstitute its board of directors and management team. Condensed Interim Consolidated Statements of Income (loss) and Comprehensive Income (loss) For the nine months ended September 30, 2024 Previous Adjustments Restated Discontinued operations (Loss) income from --- discontinued operations (26,260) $ 400,154 $ 373,894 $ Net (loss) income (26,260) 400,154 373,894 Other comprehensive (loss) income Loss on translation of discontinued operations (3,935) (3,056) (6,991) Total (loss) income and comprehensive (loss) income (161,092) $ 397,098 $ 236,006 $ Steep Hill Inc. Notes to Condensed Interim Consolidated Financial Statements For The Nine Months Ended September 30, 2025 and 2024 Unaudited (Expressed in Canadian dollars) - 14 - 14. SUBSEQUENT EVENTS (continued) In connection with the Transaction, Good Purpose intends to undertake a non-brokered private placement offering of Good Purpose Shares, at an effective price per Good Purpose Share that is equal to $0.40 per Resulting Issuer Share at the time of completion of the Transaction, for aggregate gross proceeds of a minimum of $3,000,000 and a maximum of $10,000,000 (the "Good Purpose Financing"). The Shares issued as part of the Good Purpose Financing will subsequently be exchanged for Resulting Issuer Shares in accordance with the Exchange Ratio at the time of completion of the Transaction.