SEDAR Interim Financial Statements

Black Swan Graphene Inc. Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (Expressed in Canadian Dollars) (unaudited) NOTICE OF NO AUDITOR REVIEW 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 interim consolidated financial statements have not been reviewed by an auditor. The accompanying unaudited 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 a review of these condensed interim consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada (CPA Canada) for a review of interim financial statements by an entity’s auditor. Black Swan Graphene Inc. Condensed Interim Consolidated Statements of Financial Position Expressed in Canadian Dollars (Unaudited) 1 September 30, December 31, As at: 2025 2024 Note $ $ ASSETS Current Cash and cash equivalents 3 7,218,018 3,003,901 Amounts receivable 356,917 606,086 Prepaid expenses 11,441 402 Total current assets 7,586,376 3,610,389 Non-current assets Intangible assets 4 5,596,735 6,306,180 Investment 5 795,249 795,249 Total assets 13,978,360 10,711,818 LIABILITIES Current Accounts payable and accrued liabilities 336,763 272,632 Total liabilities 336,763 272,632 SHAREHOLDERS' EQUITY Share capital 6 34,664,866 28,114,107 Contributed surplus 6 537,190 537,190 Option reserve 6 2,378,338 1,698,624 Warrant reserve 6 1,399,506 - Deficit (25,338,303) (19,910,735) Total shareholders' equity 13,641,597 10,439,186 Total liabilities and shareholders' equity 13,978,360 10,711,818 Nature of operations and going concern (Note 1) Commitments and contingenices (Note 10) Subsequent events (Note 11) Approved on behalf of the Board of Directors: Signed: “Simon Marcotte” , Director Signed: “Peter Damouni” , Director The accompanying notes are an integral part of these financial statements. Black Swan Graphene Inc. Condensed Interim Consolidated Statements of Loss and Comprehensive Loss Expressed in Canadian Dollars (Unaudited) 2 September 30, September 30, 2025 2024 2025 2024 Note $ $ $ $ Expenses Management, director and consulting fees 1,022,260 253,906 1,989,564 780,851 Project development expenses 618,784 152,432 1,341,551 606,628 Amortization of intangible assets 4 236,481 236,482 709,445 709,446 Share based compensation 6 - - 822,561 - Professional fees 130,320 36,117 378,454 189,626 Investor relations 35,561 16,385 239,818 69,893 Office and general (5,440) 22,532 42,959 70,389 Interest income (49,995) (39,699) (96,784) (94,559) Net loss and comprehensive loss for the period (1,987,971) 678,155 (5,427,568) (2,332,274) Basic and diluted loss per share (0.04) 0.02 (0.11) (0.06) Weighted average number of common shares outstanding Basic and diluted 6 50,243,214 37,716,260 48,135,599 37,716,260 Three Months Ended Nine Months Ended The accompanying notes are an integral part of these financial statements. Black Swan Graphene Inc. Condensed interim Consolidated Statements of Changes in Shareholders’ Equity Expressed in Canadian Dollars (Unaudited) 3 Common Shares Share Capital Contributed Surplus Option Reserve Warrant Reserve Deficit Shareholders' Equity # $ $ $ $ $ $ Bal --- ance, December 31, 2023 37,716,260 28,114,107 537,190 1,698,624 - (16,516,840) 13,833,080 Loss for the period - - - - (2,332,274) (2,332,274) Balance, September 30, 2024 37,716,260 28,114,107 537,190 1,698,624 - (18,849,114) 11,500,806 Common Shares Share Capital Contributed Surplus Option Reserve Warrant Reserve Deficit Shareholders' Equity # $ $ $ $ $ $ Balance, December 31, 2024 37,716,260 28,114,107 537,190 1,698,624 - (19,910,735) 10,439,186 Share adjustment (3) - - - - - - Private placement 12,000,000 6,000,000 - - 1,908,418 - 7,908,418 Share issue costs - (1,926,000) - - - - (1,926,000) Share based compensation - - - 822,561 - - 822,561 Warrant exercises 1,600,000 2,108,912 - - (508,912) - 1,600,000 Option exercises 225,000 367,847 - (142,847) - - 225,000 Loss for the period - - - - - (5,427,568) (5,427,568) Balance, September 30, 2025 51,541,257 34,664,866 537,190 2,378,338 1,399,506 (25,338,303) 13,641,597 The accompanying notes are an integral part of these financial statements. Black Swan Graphene Inc. Condensed Interim Consolidated Statements of Cash Flows Expressed in Canadian Dollars (Unaudited) 4 For the periods: September 30, September 30, 2025 2024 Note $ $ Cash (used in)/provided by: Operating activities Net loss (5,427,568) (2,332,274) Items not involving cash Share based compensation 6 822,561 - Amortization of patents 4 709,445 709,446 Changes in non-cash working capital Change in amounts receivable 249,169 (2,959) Change in prepaid expenses (11,039) (21,609) Change in accounts payable and accrued liabilities 64,131 74,486 Net cash flow (used in) operating activities (3,593,301) (1,572,911) Financing activities Proceeds from private placement of common shares 6 5,982,418 - Warrant exercises 6 1,600,000 - Option exercises 6 225,000 - Net cash flow provided by financing activities 7,807,418 - Net change in cash and cash equivalents during the period 4,214,117 (1,572,911) Cash and cash equivalents, beginning of period 3,003,901 5,323,893 Cash and cash equivalents, end of period 7,218,018 3,750,982 The accompanying notes are an integral part of these financial statements. Black Swan Graphene Inc. Notes to the Condensed Interim Consolidated Financial Statements For the periods ending September 30, 2025 and 2024 Expressed in Canadian Dollars (Unaudited) 5 1. NATURE OF OPERATIONS AND GOING CONCERN Black Swan Graphene Inc., (formerly Dragonfly Capital Corp.) (the “Company”, or “Black Swan”) is focused on the large-scale production and commercialization of patented high-performance and low-cost graphene products aimed at several industrial sectors, including concrete, polymers, Li-ion batteries, and others, which are expected to require large volumes of graphene. The Company is listed on the TSXV as a Tier 2 Industrial Issuer under the name “Black Swan Graphene Inc.” The Common Shares trade on the TSXV under the symbol “SWAN”. The Company will have future needs for equity financing for working capital and the development of its business. Because of continuing operating losses, the Company's continuance as a going concern is dependent upon its ability to obtain adequate financing and to reach profitable levels of operation. It is not possible to predict whether financing efforts will be successful or if the Company will attain profitable levels of operation. These condensed interim consolidated financial statements have been prepared using accounting policies applicable to a going concern, which contemplates the realization o --- f assets and settlement of liabilities in the normal course of operations. Accordingly, they 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 liquidate its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying condensed interim consolidated financial statements. Such adjustments could be material. Approval of the consolidated financial statements These condensed interim consolidated financial statements of the Company for the three and nine months ended September 30, 2025 and 2024 were reviewed, approved and authorized for issue by the Board of Directors of the Company on November 27, 2025. 2. BASIS OF PRESENTATION These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34, Interim Financial Reporting. These condensed interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company’s annual financial statements as at and for the year ended December 31, 2024. In particular, the Company’s significant accounting policies were summarized in Note 3 of the financial statements for the year ended December 31, 2024, and have been consistently applied in the preparation of these condensed interim consolidated financial statements. 3. CASH AND CASH EQUIVALENTS September 30, 2025 December 31, 2024 $ $ Cash 7,218,018 503,901 Guaranteed investment certificate ("GIC"), bearing interest rate at 4.50% per annum maturing March 6, 2025 - 2,500,000 Cash and cash equivalents 7,218,018 3,003,901 Black Swan Graphene Inc. Notes to the Condensed Interim Consolidated Financial Statements For the periods ending September 30, 2025 and 2024 Expressed in Canadian Dollars (Unaudited) 6 4. INTANGIBLE ASSETS The Company acquired certain intangible asset related to a patented graphene processing technology from Thomas Swan and Co. Ltd. (“Thomas Swan”), and a license from Trinity College Dublin for the production of exfoliated defect-free, non-oxidized 2-D materials in large quantities (the “TCD License”), which license was previously held by Thomas Swan. In addition, Black Swan Graphene and Thomas Swan have entered into a License Agreement and a Sub-License Agreement, pursuant to which Black Swan Graphene has granted Thomas Swan a license to graphene processing technology for production of up to 1,000 tonnes per year and Black Swan Graphene has sub-licensed the TCD License to Thomas Swan, respectively. The TCD License is subject to an incremental royalty rate ranging from 3.0% up to 9.0% of net sales when greater than €20,000,000 ($27,345,000) and have lives of 15 or 20 years from the commencement of commercial sales related to such licenses. Intangible assets are amortized over a ten-year period and have a balance of $5,596,735 as at September 30, 2025 (December 31, 2024 - $6,306,180). Intangible Assets Balance December 31, 2022 8,198,036 Amortization of Intangible assets (945,928) --- Balance December 31, 2023 7,252,108 Amortization of Intangible assets (945,928) Balance December 31, 2024 6,306,180 Amortization of Intangible assets (709,445) Balance September 30, 2025 5,596,735 GEIC Membership Agreement On March 9, 2022, Black Swan and the University of Manchester entered into the GEIC Membership Agreement, granting the Company a “Tier 2” membership in the Graphene Engineering Innovation Centre (“GEIC”) established by the University. The GEIC Membership Agreement grants the Company a license to occupy a shared laboratory space and book hot desk space at the University. Black Swan shall retain or be passed title to all intellectual property, know-how and results generated from such collaborative projects with the University of Manchester, subject to a 5% royalty, Black Swan must pay to the University of Manchester for a period of 15 years if Black Swan commercially exploits such intellectual property, know-how or results. Pursuant to the terms and conditions set out in the GEIC Membership Agreement, the University of Manchester may publish the results obtained from the collaborative projects. 5. LONG TERM INVESTMENT On April 5, 2023, under an Equity Swap, Nationwide Engineering Research and Development Ltd (“CONCRETENE”) issued to Black Swan 7,177 seed preferred shares (“CONCRETENE Shares”), ranking senior to all other shares in the share capital of CONCRETENE, at a deemed price per share of £220 for an aggregate deemed subscription price of approximately £1.58 million or approximately CAD$2.65M. and representing a 5.0% ownership stake in CONCRETENE as of April 5, 2023. Black Swan paid for the CONCRETENE Shares by way of issuance of 2,046,438 common shares in the capital of Black Swan. The value of the Investment in CONCRETENE was based on the closing price of the Company’s common shares on the TSX-V on April 5, 2023 which was $2,455,726. On the date of the acquisition the value of the investment was $2,455,726. As at December 31, 2024, after a fair value adjustment, based on a subsequent financing, Black Swan Graphene Inc. Notes to the Condensed Interim Consolidated Financial Statements For the periods ending September 30, 2025 and 2024 Expressed in Canadian Dollars (Unaudited) 7 the value of the investment is $795,249 and the Company’s ownership interest is 4.93%. As at September 30, 2025, the value of the investment was $795,249. As part of the transaction, the Company issued 200,000 compensation warrants with an expiry date of April 5, 2026 and an exercise price of $1.20. 6. SHARE CAPITAL AND CONTRIBUTED SURPLUS Authorized On September 30, 2025, the authorized share capital consisted of an unlimited number of common shares, each carrying one vote. Issued and Outstanding On September 30, 2025, the Company had 51,541,257 common shares issued. Common share activity during the period ended September 30, 2025 was as follows: Number of shares outstanding Amount Balance, December 31, 2023 and 2024 37,716,260 28,114,107 Share adjustment (3) - Private placement (i) 12,000,000 6,000,000 Share issue costs - (1,926,000) Warrant exercise (ii) 1,600,000 2,108,912 Stock option exercise (iii) 225,000 367,847 Balance, September 30, 2025 51,541,257 34,664,866 i. On February 10, 2025, the Company completed a private placement financing by issuing 12,000,000 units at a price of $0.50 per unit for gross proceeds of $6,000,000. Each unit is comprised of one common share of the Company and one-half common share purchase warrant, entitl --- ing the holder to acquire one common share at a price of $1.00 for a period of 18 months. The grant date fair value of the warrants issued was estimated at $1,908,418 using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; share price of $0.82; expected volatility of 94.5%; risk-free interest rate of 4.12% and expected life of 1.5 years. ii. During the period ended September 30, 2025, the Company issued 1,600,000 common shares upon the exercise of 1,600,000 warrants for gross proceeds of $1,600,000. iii. During the period ended September 30, 2025, the Company issued 225,000 common shares upon the exercise of 225,000 stock options for gross proceeds of $225,000. Stock Options, Restricted Share Units and Warrants Black Swan established an equity incentive plan to be known as the Omnibus Equity Incentive Plan (as the same may be amended from time to time in accordance with its terms, (the “Plan”). The Plan permits the grant of Options to purchase common shares, Restricted Share Units, Deferred Share Units and Performance Share Units. The Plan was approved by the Board on August 2, 2022. The exercise price and vesting period of any option is fixed by the Board of Directors on the date of grant, in accordance with applicable stock exchange or Black Swan Graphene Inc. Notes to the Condensed Interim Consolidated Financial Statements For the periods ending September 30, 2025 and 2024 Expressed in Canadian Dollars (Unaudited) 8 other regulatory requirements, if applicable. The maximum aggregate number of common shares under option at any time under the Plan cannot exceed 10% of the issued shares. The following schedule details stock options outstanding as at September 30, 2025: Estimated Weighted Number Exercise grant date Risk- Expected Expected average outstanding Grant Expiry price fair value Volatility interest remaining dividend Remaining # date date $ $ rate life yield life 1,625,000 25-Oct-21 25-Oct-31 $1.20 1,746,550 103% 2.71% 9.24 0% 6.07 271,875 19-Nov-21 19-Nov-27 $1.20 292,211 109% 2.85% 4.28 0% 2.14 131,250 07-Nov-22 07-Nov-27 $1.20 141,068 109% 3.77% 5.00 0% 2.10 62,500 02-May-23 02-May-28 $1.36 67,145 106% 2.95% 5.00 0% 2.59 1,070,625 21-Feb-25 21-Feb-30 $1.00 679,714 95% 4.12% 5.00 0% 4.40 3,161,250 2,926,688 On February 21, 2025, the Company granted a total of 1,295,625 stock options to directors, management and consultants of the Company pursuant to it’s stock option plan. The options vest immediately and may be exercised at a price of $1.00 per option until February 21, 2030. The fair value of the stock options issued was estimated at $822,561 using the Black-Scholes option pricing model. Officers and directors were granted 693,125 options valued at $440,048. On the Transaction date, outstanding options of Black Swan were cancelled and replaced with 1,896,875 options exercisable at $1.20 per share, and 984,375 Restricted Share Units, vesting over one year. The cancellation and replacement of these share-based payment instruments is identified as a modification for accounting purposes in accordance with IFRS2, Share-based payment. In accordance with modification accounting, the value of the share based payments previously outstanding was re-estimated at the modification date using the Black-Scholes option pricing model and the following assumptions: expected life of 9.6 years or 4.6 years, expected volatility of 83%, risk free interest rate of 3%, current stock price based on --- the price of the shares in the subscription receipt financing ((Note 3(b), as the concurrent subscription receipt price was assessed as being the best estimate of the fair value of the shares), and expected dividend yield of 0%); - the value of the share based payments outstanding after the modification were estimated at the modification date whereby: the value of options was estimated using the Black-Scholes option pricing model and the following assumptions: expected life of 9.6 years or 4.6 years, expected volatility of 83%, risk free interest rate of 3%, current stock price based on the price of the shares in the subscription receipt financing ((Note 3(b), as the concurrent subscription receipt price was assessed as being the best estimate of the fair value of the shares), and expected dividend yield of 0%); and on the value of the RSUs was estimated based on the price of the shares in the subscription receipt financing ((Note 3(b), as the concurrent subscription receipt price was assessed as being the best estimate of the fair value of the shares). Based on this analysis, it was determined that an incremental fair value of $577,589 results due to the modification. Black Swan Graphene Inc. Notes to the Condensed Interim Consolidated Financial Statements For the periods ending September 30, 2025 and 2024 Expressed in Canadian Dollars (Unaudited) 9 Restricted Share Units The Company has a restricted share unit plan (“RSU Plan”) administered by the Board of Directors and which permits the Company to grant awards of RSUs. Pursuant to the terms of the RSU Plan, the RSUs will be redeemed, upon vesting, within 30 days of the applicable redemption date at the option of the Company, for: (i) the number of common shares equal to the numbers of RSUs vested on the redemption date; (ii) a cash amount equal to the number of common shares multiplied by the fair market value of the common shares on the redemption date; or (iii) a combination of (i) and (ii) as determined by the Company. The redemption date in respect of any RSU is the date provided for in the agreement granting the RSUs or if no date is set, the third anniversary of the grant date, unless otherwise provided for in the RSU Plan. The Company has the discretion to stipulate the length of time for vesting and to determine various performance objectives based on certain business criteria as a pre-condition to an RSU vesting. The Company’s intention is to always settle its RSUs with issuance of common shares of the Company. At September 30, 2025, the Company has RSUs outstanding as follows: Number of Issue date Vesting date RSUs August 2, 2022 August 9, 2025 984,375 Feburay 21, 2025 August 21, 2026 450,000 1,434,375 On February 21, 2025, the Company granted 450,000 restricted share units (“RSU’s”) to Directors and Officers of the Company. The RSU’s vest on August 21, 2026, subject to the terms of the Omnibus Incentive Plan. A summary of changes in the Company’s RSUs follows: Number of RSUs # Balance, December 31, 2023 and 2024 984,375 Grant, February 2025 450,000 Balance, September 30, 2025 1,434,375 984,375 RSU’s have vested as at September 30, 2025 for issuance. Black Swan Graphene Inc. Notes to the Condensed Interim Consolidated Financial Statements For the periods ending September 30, 2025 and 2024 Expressed in Canadian Dollars (Unaudited) 10 Warrants The changes in warrants issued during the period ended September 30, 2025 was as follows: Number Weighted average exercise price Outs --- tanding, December 31, 2024 200,000 1.20 $ Issued, February 10, 2025 4,400,000 1.00 $ Outstanding, September 30, 2025 4,600,000 1.01 $ The following table summarizes the warrants outstanding as at September 30, 2025: Estimated Number Exercise grant date Risk-free Expected Expected outstanding Grant Expiry price fair value Volatility interest life (Yrs) dividend Remaining # date date $ $ rate # yield life 200,000 05-Apr-23 05-Apr-26 $1.20 147,062 96% 3.32% 3.00 0% 0.51 4,400,000 10-Feb-25 10-Aug-26 $1.00 1,908,418 95% 4.12% 1.50 0% 0.86 4,600,000 2,055,480 7. CAPITAL MANAGEMENT The Company manages and adjusts its capital structure based on available funds in order to support the acquisition, exploration and development of mineral properties. The Board does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company considers its capital to consist of common shares. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no significant changes in the Company’s approach to capital management during the periods ended September 30, 2025 and 2024. The Company is not subject to any capital requirements imposed by a lending institution or regulatory body, other than of the TSX Venture Exchange (“TSXV”) which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months. As of September 30, 2025 and December 31, 2024, the Company believes it is compliant with the policies of the TSXV. 8. FINANCIAL INSTRUMENTS Financial instruments recorded at fair value on the statement of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: a) Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; b) Level 2 - Inputs other than quoted prices that are observable for assets or liabilities, either directly or indirectly; and c) Level 3 - Inputs for assets and liabilities that are not based on observable market data. Black Swan Graphene Inc. Notes to the Condensed Interim Consolidated Financial Statements For the periods ending September 30, 2025 and 2024 Expressed in Canadian Dollars (Unaudited) 11 The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value. The Company’s financial instruments include cash, amounts receivable and accounts payable and accrued liabilities. The carrying values of these financial instruments reported in the statements of financial position approximate their respective fair values due to the relatively short-term nature of these instruments. As at September 30, 2025 and December 31, 2024, the Company had no instruments to classify in the fair value hierarchy. The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below: (a) Credit risk Counterparty credit risk is the risk that the financial benefits of contracts with a specific counterparty will b --- e lost if a counterparty defaults on its obligations under the contract. This includes any cash amounts owed to the Company by those counterparties, less any amounts owed to the counterparty by the Company where a legal right of set-off exists and also includes the fair values of contracts with individual counterparties which are recorded in the financial statements. a. Trade credit risk The Company is not exposed to significant trade credit risk. b. Cash In order to manage credit and liquidity risk the Company’s policy is to invest only in highly rated investment grade instruments that have maturities of nine months or less. Limits are also established based on the type of investment, the counterparty and the credit rating. (b) Currency risk Currency risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will fluctuate because of changes in foreign exchange rates. The Company’s foreign currency risk arises primarily with respect to UK sterling and US dollars from operations. Fluctuations in the exchange rates between these currencies and the Canadian dollar could have a material effect on the Company’s business, financial condition and results of operations. The Company does not engage in any hedging activity to mitigate this risk. (c) Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at September 30, 2025, the Company had a cash balance of $7,218,018 (December 31, 2024 - $3,003,901) to settle current liabilities of $336,763 (December 31, 2024 - $272,632). The Company’s trade payables have contractual maturities of less than 30 days and are subject to normal trade terms. 9. RELATED PARTY TRANSACTIONS Compensation of key management personnel of the Company In accordance with IAS 24, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company. During the three and nine months ended September 30, 2025, the remuneration of directors and other key management personnel was $242,500 and $674,326 respectively Black Swan Graphene Inc. Notes to the Condensed Interim Consolidated Financial Statements For the periods ending September 30, 2025 and 2024 Expressed in Canadian Dollars (Unaudited) 12 (three and nine months ended September 30, 2024 - $215,000 and $645,000, respectively). For the three and nine months ended September 30, 2025, a total of $nil and $440,048, respectively was recorded in share- based payments expense for stock options and RSU’s issued to directors and officers (three and nine months ended September 30, 2024 - $nil). 10. COMMITMENTS AND CONTINGENCIES Management Contracts The Company is party to certain management contracts. These contracts require payments of approximately $1,405,000 upon the occurrence of a change in control of the Company, as defined by each officer’s respective consulting agreement. The Company is also committed to payments upon termination of approximately $815,000 pursuant to the terms of these contracts. As a triggering event has not taken place, the contingent payments have not been reflected in these consolidated financial statements. 11. SUBSEQUEN --- T EVENTS Subsequent to September 30, 2025, 1,500,000 common shares of the Company were issued following the exercise of 1,500,000 warrants for gross proceeds of $1,500,000.