SEDAR Interim Financial Statements

WIRE & WIRE PRODUCTS ESTABLISHED IN 1964 Consolidated Financial Statements September 30, 2025 INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ………………………… SHAREHOLDER INFORMATION ……..…………………………………………………………………………………… Since 1964, Tree Island Steel has been making products from steel wire for a diverse range of customers for industrial, residential construction, commercial construction and agricultural applications. Our products include welded wire mesh, fencing, galvanized wire, bright wire, a broad array of fasteners, stucco reinforcing products, and other fabricated wire products. We market these products under the Tree Island®, Halsteel®, TrueSpec®, K-Lath®, TI Wire®, ToughStrand® and ToughPanel® brand names. Listed on the Toronto Stock Exchange (“TSX”), our shares trade under the symbol TSL. 2 back cover 1 INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 September 30, 2025 and 2024 INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS Under National Instrument 51-102 “Continuous Disclosure Obligation”, Part 4, Subsection 4.3(3a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying interim condensed consolidated financial statements of Tree Island Steel have been prepared by and are the responsibility of Tree Island Steel’s management. Tree Island Steel’s independent auditor, KPMG LLP, has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor. November 13, 2025 Tree Island Steel Q3 2025 2 INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ($'000 unless otherwise stated) As at September 30, As at December 31, Notes Cash & cash equivalents 5 Accounts receivable 6, 13.1 Inventory 7 Prepaid expenses Income taxes recoverable Other current assets Current assets Property, plant and equipment 8 Right of use assets 9.1 Income taxes recoverable 14.1 Other non-current assets Total assets Senior revolving credit facility 10.1 Accounts payable and accrued liabilities Dividends payable Current portion of ROU lease liabilities 9.2 Current liabilities ROU Lease liabilities 9.2 Other non-current liabilities Deferred income tax liabilities Total liabilities Shareholders’ equity Total liabilities and shareholders’ equity Approved on behalf of Tree Island Steel. [Signed] "Amar S. Doman" Executive Chairman of the Board of Directors 56,531 51,955 5,014 5,429 678 530 2025 2024 2,806 8,697 23,387 24,277 1,674 1,652 4,227 4,189 165,196 168,817 5,640 - 90,090 92,540 45,514 46,879 18,570 20,422 6,795 4,787 389 781 1,508 1,431 13,524 16,498 23,774 25,522 21,061 18,710 114,635 118,862 165,196 168,817 169 166 5,557 5,557 50,561 49,955 See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements Tree Island Steel Q3 2025 3 INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 CONSOLIDATED STATEMENTS OF OPERATIONS ($'000 unless otherwise stated) Notes Revenue 6, 13.1, 20.1 Freight and distribution costs Subtotal Cost of sales 7 Depreciation 8, 9.1 Gross profit Selling, general and administrativ --- e expenses Operating income (loss) Foreign exchange gain (loss) Loss on disposition of property, plant and equipment Other expenses Interest income Financing expenses 11 Income (loss) before income taxes Income tax (expense) recovery 14.1 Net loss Net loss per share 18 Dividends per share Weighted average number of shares 18 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ($'000 unless otherwise stated) Net loss Comprehensive Loss 38,724 54,949 136,519 173,256 Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 36,839 51,614 129,368 162,153 (33,658) (48,179) (115,630) (146,600) (1,885) (3,335) (7,151) (11,103) (2,916) (3,340) (9,352) (10,019) (1,103) (1,289) 258 1,468 (1,368) (1,384) (4,128) (4,066) 1,813 2,051 9,610 11,487 (350) (33) (749) (44) (65) (89) 78 495 (47) - (92) - (622) (659) (1,674) (1,787) 46 80 97 415 (2,141) (1,990) (2,082) 547 - 144 - (1,158) (2,141) (1,846) (2,082) (611) (0.08) (0.07) (0.08) (0.02) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 0.015 0.030 0.045 0.090 25,940,614 26,113,570 25,983,920 26,628,953 (2,141) (1,846) (2,082) (611) Unrealized gain (loss) on foreign exchange translation 423 (328) (717) 592 (1,718) (2,174) (2,799) (19) See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements Tree Island Steel Q3 2025 4 INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Accumulated Shareholders' Other Capital Retained Comprehensive ($'000 unless otherwise stated) Note 12 Deficit Income (Loss) Total Balance as at December 31, 2024 Repurchase of shares Net loss Dividends Other comprehensive loss Balance as at March 31, 2025 Repurchase of shares Net Income Dividends Other comprehensive loss Balance as at June 30, 2025 Repurchase of shares Net loss Dividends Other comprehensive income Balance as at September 30, 2025 Balance as at December 31, 2023 Repurchase of shares Net Income Dividends Other comprehensive income Balance as at March 31, 2024 Repurchase of shares Net Income Dividends Other comprehensive income Balance as at June 30, 2024 Repurchase of shares Net loss Dividends Other comprehensive loss Balance as at September 30, 2024 215,459 (97,581) 984 118,862 - (390) - (390) - - (22) (22) (20) - - (20) - (13) - (13) - 71 - 71 - (389) - (389) 215,439 (97,984) 962 118,417 (133) - - (133) (106) - - (106) - - (1,119) (1,119) 215,306 (98,302) (156) 116,848 - (2,141) - (2,141) - (389) - (389) - - 423 423 215,200 (100,832) 267 114,635 218,973 (90,511) (1,080) 127,382 (92) - - (92) - - 656 656 218,881 (90,699) (424) 127,758 - 625 - 625 - (813) - (813) - (784) - (784) - - 264 264 (3,048) - - (3,048) - 610 - 610 - (1,846) - (1,846) - (782) - (782) 215,833 (90,873) (160) 124,800 (262) - - (262) - - (328) (328) 215,571 (93,501) (488) 121,582 See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements Tree Island Steel Q3 2025 5 INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 CONSOLIDATED STATEMENTS OF CASH FLOWS ($'000 unless otherwise stated) Notes Net loss Depreciation 8, 9.1 Loss on disposition of property, plant and equipment Tax reassessement deposit and refundable surtaxes / duties paid Change in non-current assets Net financing costs Deferred income tax expense Working capital adjustments Accounts receivable Inventories Accounts payable and accrued liabilities Prepaid expe --- nses Income and other taxes Other Net cash used in operating activities Investment income on cash equivalents Property, plant and equipment expenditures Net cash used in investing activities Lease interest paid Lease principal payments Other interest paid Deferred financing fees Advance on senior revolving credit facility Dividend paid Repurchase of common shares Net cash provided by (used in) financing activities Effect of exchange rate change on cash Decrease in cash Cash and cash equivalents - beginning of period Cash and cash equivalents - end of period Three Months Ended September 30, 2025 2024 2025 2024 Nine Months Ended September 30, (2,141) (1,846) (2,082) (611) 1,368 1,384 4,128 4,066 Unrealized foreign exchange (gain) loss on revaluation of lease liability 156 (324) (183) 479 47 - 91 - 608 578 1,619 1,371 641 - (739) - (404) (1,010) (2,687) (3,909) 704 3,086 213 (4,591) - 52 - 170 (2,718) (3,136) (4,548) (2,835) (2,644) 458 (2,829) 2,626 116 86 (135) (38) (3,639) (423) (4,877) (2,959) 2,029 444 917 (670) (21) (195) (22) 983 (473) (155) (1,721) (1,569) (430) (82) (1,641) (1,180) 43 73 80 389 (285) (299) (882) (862) (257) (319) (651) (858) (358) (324) (1,062) (937) (389) (784) (1,560) (2,411) (106) (258) (259) (3,338) - (14) (43) (14) 4,981 - 5,640 - 98 (79) (556) 501 (385) (2,582) (5,891) (12,057) 3,586 (1,998) 1,183 (8,420) See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements 3,191 10,865 8,697 20,340 2,806 8,283 2,806 8,283 Tree Island Steel Q3 2025 6 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 1 BASIS OF PREPARATION 2.1 BASIS OF PREPARATION FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY NATURE OF BUSINESS These interim unaudited condensed consolidated financial statements of Tree Island Steel Ltd. (”Tree Island” or the “Company”) for nine months ended September 30, 2025 and 2024 were authorized for issue in accordance with a resolution of the Board of Directors on November 13, 2025. The Company is headquartered at 3933 Boundary Road, Richmond, British Columbia, Canada and the Shares are publicly traded on the Toronto Stock Exchange (“TSX”) under the symbol TSL. 2 The interim unaudited condensed consolidated financial statements as at and for the nine months ended September 30, 2025 and 2024 have been prepared in accordance with the IFRS Accounting Standards ("IFRS"). Certain comparative information has been reclassified to conform to the presentation adopted during the year. These interim unaudited condensed consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments categorized as fair value through profit or loss. In addition, these interim unaudited condensed consolidated financial statements have been prepared using the accrual basis of accounting. 2.2 The functional and presentation currency of the Company is the Canadian dollar. All amounts have been rounded to the nearest thousand, except as otherwise indicated. TI Canada's wholly-owned subsidiaries, TIWH and TI USA use the U.S. Dollar as their functional currency. Tree Island Steel Q3 2025 7 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 3 4 5 Cash Cash equivalents Total cash and cash equivalents 2,641 6,788 165 1,909 2,806 8,697 FUTURE IFRS STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE Tree Island prepares its audited consolidated financial statements --- in accordance with IFRS standards. At this time, new standards, interpretations or amendments to existing accounting standards are either not applicable or not expected to have a significant impact on Tree Island’s consolidated financial statements in the current year. CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of cash on hand, demand deposits, and highly liquid money market mutual fund investments. These investments are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value. None of the balances represent restricted funds. The carrying amount of cash and cash equivalents approximates their fair value due to the short-term nature of these instruments. Information about credit risk is presented in Note 16.1. The following table presents Tree Island's cash and cash equivalent balances: As at December 31, 2024 As at September 30, 2025 The International Accounting Standards Board (IASB) has issued IFRS 18, which introduces new requirements related to presentation and disclosure for financial statements. The Company will be assessing the impact of this new standard on its financial reporting. MATERIAL ACCOUNTING POLICIES, CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES The accounting policies, methods of application and critical judgements and estimates used in the preparation of these interim unaudited condensed consolidated financial statements are consistent with those disclosed in the annual consolidated financial statements as at December 31, 2024. Tree Island Steel Q3 2025 8 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 6 REVENUE AND ACCOUNTS RECEIVABLE Below is the composition and aging of Tree Island’s accounts receivable: Current Over 30 days past due Total accounts receivable Allowance for doubtful accounts Net accounts receivable See Note 16.1 on credit risk of trade receivables to understand how credit quality of accounts receivable, that are neither past due nor impaired, are managed and measured. Accounts receivable are non-interest bearing and are generally due on 30-day to 90-day terms. The credit risk that Tree Island was exposed to by way of its accounts receivable is equal to the net amount of $23.4 million as at September 30, 2025 ($24.3 million as at December 31, 2024). At the end of each reporting period a review of the allowance for bad and doubtful accounts is performed. It is an assessment of the expected credit loss associated with trade accounts receivable after the consolidated statement of financial position date. The assessment is made by reference to age, status and risk of each receivable, current economic conditions and historical information. The trade accounts receivable balance is reduced through the use of the allowance for doubtful accounts and the amount of the loss is recognized in the consolidated statement of operations. Reversals to the allowance for doubtful accounts occur when previously allowed for trade accounts receivable are collected. Individual trade accounts receivable, together with any associated allowance previously recognized, are written off when there is no realistic prospect of future recovery. Accounts receivable with related parties are discussed in Note 13.1. 23,794 24,434 (407) (157) 23,387 24,277 For both the sale of goods and contract manufacturing, stated revenue includes freight, where applicable, and is net of early payment discounts and rebates grante --- d. Freight costs, incurred for the purpose of shipping product out to customers, represent flow through costs for the Company and are passed on to the end customer. These recoverable amounts of the costs are included in the Company's top-line revenue. Since these flow through costs can vary significantly, from customer to customer and year to year, changes in revenue may not be indicative of the Company's revenue trends. Therefore, the Company also presents revenue net of freight and distribution costs. As at September 30, 2025 As at December 31, 2024 22,994 22,408 800 2,026 Tree Island Steel Q3 2025 9 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 7 INVENTORIES Tree Island had the following categories of inventory: Raw materials Finished and semi-finished products Consumable supplies and spare parts Total inventory Opening inventory Material purchases Conversion costs Closing inventory Cost of sales The reserves for slow moving inventory as at September 30, 2025 were $1.5 million ($1.5 million at December 31, 2024). (56,531) (54,578) (56,531) (54,578) 33,658 48,179 115,630 146,600 24,089 36,332 79,350 103,423 12,287 14,983 40,856 45,684 2025 2024 2025 2024 53,813 51,442 51,955 52,071 17,089 16,726 56,531 51,955 For the nine months ended September 30, 2025 and 2024, Tree Island recognized, in income, inventory costs for the following: Three Months Ended September 30, Nine Months Ended September 30, As at September 30, 2025 As at December 31, 2024 12,227 11,211 27,215 24,018 Tree Island Steel Q3 2025 10 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 8 PROPERTY, PLANT AND EQUIPMENT The net book value of the Company’s property, plant and equipment is detailed below: Land & Building & Machinery & Capital in Improvement Improvement Equipment Progress Total Cost As at December 31, 2023 Additions Disposals Foreign exchange translation As at December 31, 2024 Additions Disposals Foreign exchange translation As at September 30, 2025 Depreciation and impairment As at December 31, 2023 Depreciation Disposals Foreign exchange translation As at December 31, 2024 Depreciation Disposals Foreign exchange translation As at September 30, 2025 Net book value as at December 31, 2024 September 30, 2025 13,338 11,806 21,262 473 46,879 13,338 10,695 20,255 1,226 45,514 - (66) (103) - (169) - 37,765 29,907 - 67,672 - - (258) - (258) - 36,800 28,614 - 65,414 - 1,031 1,654 - 2,685 - 152 252 - 404 - 1,376 2,246 - 3,622 - - (27) - (27) - 35,272 26,143 - 61,415 - (146) (143) (2) (291) 13,338 48,460 50,162 1,226 113,186 - - 747 755 1,502 - - (318) - (318) - 364 343 6 713 13,338 48,606 49,876 473 112,293 - 577 3,016 (1,693) 1,900 - - (27) - (27) From time to time the Company makes investments to update, replace or make additions to existing capital assets, which includes, but is not limited to, the buildings occupied and capital equipment. These investments are part of the normal course of business activity. 13,338 47,665 46,544 2,160 109,707 The carrying value of property, plant and equipment is reviewed each reporting period. For the purposes of testing for impairment, or the reversal of impairment, Tree Island Steel’s assets are grouped and tested at the Cash Generating Unit level. Tree Island considers both qualitative and quantitative factors when determining whether an asset may be impaired, or when a reversal of impairment is required. Where the carr --- ying value of the assets is not expected to be recoverable from future cash flows, they are written down to their recoverable amount. Tree Island has noted no indicators of impairment as at September 30, 2025. Tree Island Steel Q3 2025 11 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 9 LEASES 9.1 RIGHT OF USE ASSETS Machinery & Total right-of-use Land & buildings equipment assets Cost As at December 31, 2023 Additions Disposals Foreign exchange translation As at December 31, 2024 Additions Disposals Foreign exchange translation As at September 30, 2025 Depreciation and impairment As at December 31, 2023 Depreciation Disposals Foreign exchange translation As at December 31, 2024 Depreciation Disposals Foreign exchange translation As at September 30, 2025 Carrying value as at: December 31, 2024 September 30, 2025 18,788 1,634 20,422 17,112 1,458 18,570 278 7 285 (9,608) (864) (10,472) (1,103) (341) (1,444) - 159 159 (648) (19) (667) (8,783) (689) (9,472) (1,428) (422) (1,850) 443 1,212 1,655 26,720 2,322 29,042 (7,150) (1,460) (8,610) - (173) (173) (851) (18) (869) 27,571 2,323 29,894 - 190 190 (443) (1,212) (1,655) 2,117 47 2,164 Below is a table of the carrying amounts of Tree Island’s right-of-use assets and lease liabilities and the related movements during the period: 24,405 2,550 26,955 1,492 938 2,430 Tree Island Steel Q3 2025 12 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 9.2 LEASE LIABILITY Machinery & Total lease Land & buildings equipment liabilities Lease liability As at December 31, 2023 New contracts and renewals Interest expense Payment of lease liability Foreign exchange translation Lease liability as at December 31, 2024 New contracts and renewals Contract disposal Interest expense Payment of lease liability Foreign exchange translation As at September 30, 2025 Less: current portion Total As at September 30, 2025 SENIOR CREDIT FACILITY • • 10.1 SENIOR REVOLVING CREDIT FACILITY The Senior Credit Facility includes a $5.0 million Letter of Credit sub-facility which enables TI Canada and TI USA to open documentary and standby letters of credit. There was a $4.1 million Letter of Credit outstanding as at September 30, 2025. 10 The Company's senior secured committed banking facility with current lender Wells Fargo Capital Finance Corporation Canada ("WellsFargo") matures on July 1, 2026 and is comprised of: $25.0 million of Senior Revolving Credit facility; and $10.0 million of Senior Term facility. The Senior Credit Facility is secured by a first charge over the Company's assets supported by the appropriate guarantees and pledges and assignments, and requires that certain covenants be met by Tree Island. The Senior Credit Facility has defined covenants, the primary one being that a certain amount of credit availability be maintained. Only if this amount falls below a certain threshold, then other covenants, which include a defined fixed charge coverage ratio, are tested. In addition, there are other restrictive covenants that limit the discretion of management with respect to certain business matters. (1,098) (410) (1,508) 22,635 1,139 23,774 (783) (2) (785) 23,733 1,549 25,282 801 81 882 (1,546) (398) (1,944) - 190 190 - (14) (14) 1,973 26 1,999 25,261 1,692 26,953 1,069 97 1,165 (1,952) (488) (2,439) 22,679 1,117 23,796 1,492 938 2,431 Tree Island Steel Q3 2025 13 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOL --- IDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 Revolving portion of the senior credit facility Deferred financing costs Total 10.2 SENIOR TERM FACILITY 11 FINANCING EXPENSES Notes Interest and fees on senior credit facility 10.1 Interest on lease liability Other interest and financing costs Amortization of deferred financing costs Total 22 12 52 34 622 659 1,674 1,787 285 299 882 863 175 345 515 880 140 3 225 10 September 30, September 30, 2025 2024 2025 2024 Deferred financing costs are included in other non-current assets on the consolidated statement of financial position. The Senior Credit Facility has financial tests and other covenants with which the Company and its subsidiaries must comply, the primary one being based on the remaining funds within the senior credit facility that is available (“Availability Test”). Only if the Availability Test falls below a certain threshold then other covenants, which include a rolling four quarters defined fixed charge coverage ratio of 1:1, are tested. As well, the Senior Credit Facility contains restrictive covenants that limit the discretion of the Company’s management with respect to certain business matters. These covenants place restrictions on, among other things, the ability of the Company’s operating subsidiaries to incur additional indebtedness, to create liens or other encumbrances, or make certain other payments, investments, loans and guarantees and to sell or otherwise dispose of assets and merge or consolidate with another entity. As at September 30, 2025, the Company was in compliance with its financial covenants on the Senior Credit Facility. Under the terms of the Senior Term Facility, the Company has designated portions up to a total of $10 million denominated in either Canadian or U.S. dollars. There is no balance outstanding as of September 30, 2025. Three Months Ended Nine Months Ended 5,640 - (66) (76) 5,574 (76) The amount available under the revolving portion of the Senior Credit Facility is limited to the amount of the calculated borrowing base as prescribed in the Senior Credit Facility, less issued Letters of Credit. Interest payable on funds borrowed in Canadian or U.S. currency is at variable rates. The following amounts are outstanding under the Senior Revolving Credit portion of the Senior Credit Facility: As at September 30, 2025 As at December 31, 2024 Tree Island Steel Q3 2025 14 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 12 SHAREHOLDERS' CAPITAL Shares Gross Issuance Cost Net Shareholders' capital - December 31, 2023 Repurchase of common shares Shareholders' capital - December 31, 2024 Repurchase of common shares Shareholders' capital - September 30, 2025 12.1 NORMAL COURSE ISSUER BID 13 RELATED PARTY TRANSACTIONS 13.1 TRANSACTIONS WITH ASSOCIATED COMPANIES Based on Tree Island Steel’s outstanding Shares as at September 30, 2025, Futura owns 38.0% of the fully diluted Shares of the Company. In addition, Mr. Doman is Chairman and CEO of Doman Building Materials Group Ltd. ("DBM"). For the three and nine months ended September 30, 2025, Tree Island sold, net of rebates, approximately $0.4 million and $1.5 million ($0.4 million and $1.6 million in 2024) of goods to DBM and trade accounts receivable owing from DBM as at September 30, 2025 is approximately $127 thousand ($107 thousand in 2024). Outstanding trade accounts receivable from DBM at period end are unsecured, interest free and settlemen --- t occurs in cash (Note 6). The Company has an ongoing normal course issuer bid (the “Bid”). The Company has renewed its Bid, effective November 12, 2025 to November 11, 2026. The renewed Bid allows the Company to purchase up to 1,290,000 Shares over the term. Tree Island has no obligation to purchase any Shares under the Bid. For the period January 1, 2025 to September 30, 2025 the Company cancelled 101,509 Shares purchased under the Bid at a total cost of $259 thousand (at an average price of $2.55 per Share). The Futura Corporation (“Futura”) is considered to be a related party to the Company because of its share ownership interest and the fact that Mr. Doman, the sole shareholder and president of Futura, sits on the Board of Directors. (101,509) (259) - (259) 25,916,357 226,600 11,400 215,200 (1,109,560) (3,514) - (3,514) 26,017,866 226,859 11,400 215,459 Tree Island is authorized to issue an unlimited number of common shares with no par value. Shares issued and outstanding are as follows: 27,127,426 230,373 11,400 218,973 Tree Island Steel Q3 2025 15 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 13.2 TRANSACTION WITH KEY MANAGEMENT PERSONNEL 14 INCOME TAXES 14.1 INCOME TAX EXPENSE The income tax expense is divided between current and deferred taxes as follows: Current tax (expense) recovery Deferred tax expense Total in the Consolidated Statement of Operations To appeal the reassesments, TII Canada has paid 50% of the Tax Amount as a deposit to the Canada Revenue Agency and Alberta Tax and Revenue Administration. Included in the Income Tax Recoverable amount on the Statement of Financial Position non- current section is a deposit amount of $6.8 million paid as of September 30, 2025. - (52) - (170) - 144 - (1,158) 2025 2024 2025 2024 - 196 - (988) Included in the definition of key management for purposes of disclosure of related party transactions are members of Board of Directors and officers of Tree Island Steel. Amounts for key management personnel for the three and nine months ended September 30, 2025 were approximately $0.2 million and $0.7 million ($0.3 million and $0.9 million in 2024) which includes wages, salaries and retirement contributions, paid annual and sick leave, vehicle costs and also includes directors’ fees paid to members of the Board. Three Months Ended September 30, Nine Months Ended September 30, Tree Island Steel Q3 2025 16 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 15 FINANCIAL INSTRUMENTS 15.1 FAIR VALUE OF FINANCIAL INSTRUMENTS • • • Cash Cash equivalents Accounts receivable Tax reassessment, duties and tariffs receivable Total financial assets Senior revolving credit facility Accounts payable, accrued & other current liabilities Lease liabilities Total financial liabilities 44,446 44,446 43,451 43,451 25,282 25,282 26,953 26,953 13,524 13,524 16,498 16,498 35,183 35,183 39,328 39,328 5,640 5,640 - - 165 165 1,909 1,909 8,990 8,990 6,353 6,353 Carrying Amount Fair Value Carrying Amount Fair Value 2,641 2,641 6,788 6,788 23,387 23,387 24,277 24,277 Cash, cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate their carrying amounts largely due to the short-term nature of these instruments; Fair value of the forward exchange forward contracts is estimated using observable foreign exchange spot and forward rates. The Company does not consider interest rate --- s or the credit quality of counterparties as significant inputs to the valuation; and Fair value on the Company's lease liabilities are based on estimated market interest rate on similar borrowings. The carrying value of the lease liabilities approximates fair value as the interest rates approximate market. As at September 30, As at December 31, 2024 2025 Tree Island records certain of its financial instruments at fair value using various techniques. These include estimates of fair values based on prevailing market rates (bid and ask prices, as appropriate) for instruments with similar characteristics and risk profiles or internal or external valuation models, such as discounted cash flow analysis and option pricing models, using, to the extent possible, observable market-based inputs. The fair values of the financial assets and financial liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values: Tree Island Steel Q3 2025 17 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 15.2 FAIR VALUE HIERARCHY The three levels of fair value estimation are: Level 1: Level 2: Level 3: 16 RISK EXPOSURE AND MANAGEMENT 16.1 CREDIT RISK Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. The only financial estimates carried at fair value are commodity purchase derivatives, which are level 2 financial instruments. As of September 30, 2025, the Company did not hold any of these financial instruments. Tree Island is exposed to various risks associated with its financial instruments. These risks are categorized as credit risk, liquidity risk and market risk. Credit risk consists of credit losses arising in the event of non-payment of accounts receivable of customer accounts. However, the credit risk is minimized through selling to well-established customers of high-credit quality. The credit worthiness of customers is assessed using credit scores supplied by a third party and through direct monitoring of their financial well-being on a continual basis. Management establishes guidelines for customer credit and appropriate precautions are taken to manage credit risk. Provisions for potential credit losses (allowance for doubtful accounts) are maintained and any such losses to date have been within management’s expectations. Cash is held by financial institutions with a superior-quality credit rating and as a result, Tree Island considers that the risk of non-performance of such instruments is negligible. The financial instruments have been categorized on a fair value hierarchy based on whether the inputs to those valuation techniques are observable (inputs reflect market data obtained from independent sources) or unobservable (inputs reflect the Company’s market assumptions). Quoted (unadjusted) market prices in active markets for identical assets or liabilities; Tree Island Steel Q3 2025 18 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 16.2 LIQUIDITY RISK Senior revolving credit facility Accounts payable, accrued and other liabilities Lease liability A --- s at September 30, 2025 Accounts payable, accrued and other liabilities Lease liability As at December 31, 2024 16.3 FOREIGN CURRENCY RISK For the nine months ended September 30, 2025, a $0.01 increase (decrease) in the Canadian dollar to U.S. dollar exchange rate would have increased (decreased) net comprehensive income by $0.1 million. 43,451 54,933 19,117 2,640 33,176 Tree Island’s U.S. dollar-denominated cash, accounts receivable, accounts payable and accrued liabilities and Senior Credit Facility are exposed to foreign currency exchange rate risk because the value of these financial instruments will fluctuate with the changes in the U.S./Canadian dollar exchange rate. The Company enters into U.S. dollar currency forward contracts for periods consistent with a portion of U.S. dollar currency transaction exposures, generally from one to three months. These are not designated as cash flow, fair value or net investment hedges. As of September 30, 2025, the Company had no outstanding U.S. dollar currency forward contracts. 26,953 38,435 2,619 2,640 33,176 16,498 16,498 16,498 - - 25,282 35,533 2,609 2,367 30,557 44,446 54,697 21,773 2,367 30,557 5,640 5,640 5,640 - - 13,524 13,524 13,524 - - The main factors that affect liquidity include realized sales prices, production levels, cash production costs, working capital requirements, future capital expenditure requirements, scheduled payments on financial liabilities and lease obligations, credit capacity and expected future debt and equity capital market conditions. Liquidity requirements are met through a variety of sources including cash balances on hand, cash generated from operations, existing credit facilities, and debt and equity capital markets. Management monitors and manages liquidity risk by preparing annual budgets, monthly projections to the end of the fiscal year and regular monitoring of financial liabilities against the constraints of the available revolving credit facilities. The table below summarizes the future undiscounted contractual cash flow requirements for financial liabilities (including scheduled interest payments on interest bearing liabilities) as at September 30, 2025. Carrying Amount Contractual Cash Flow Less Than 1 Year 1 - 2 Years Greater Than 2 Years Liquidity arises from our financial obligations and in the management of our assets, liabilities and capital structure. This risk is managed by regular evaluation of our liquid financial resources to fund current and long-term obligations and to meet its capital commitments in a cost-effective manner. Tree Island Steel Q3 2025 19 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 16.4 INTEREST RATE RISK 16.5 RAW MATERIAL PRICE RISK 17 MANAGEMENT OF CAPITAL The Company’s objectives when managing its capital are: • • Total shareholders' equity Senior revolving credit facility Lease liabilities Total capital 145,557 145,815 5,640 - 25,282 26,953 The Company manages the capital structure in accordance with these objectives, with considerations given to changes in economic conditions and the risk characteristics of the underlying assets in particular, by closely monitoring cash flows and compliance with external debt covenants. The table below is what management considers capital: As at September 30, As at December 31, 2025 2024 114,635 118,862 Tree Island is exposed to changes in the price of the materials used in its production process and, from time to time, e --- nters into forward contracts to purchase a portion of the zinc used. These are not designated as cash flow or fair value hedges. As at September 30, 2025, the Company had no outstanding zinc forward contracts. To maintain a capital base so as to preserve and enhance investor, creditor, and market confidence and to sustain viability and future development of the business; and To manage capital in a manner that will comply with the financial covenants on the Senior Credit Facility and Senior Term Loan agreements as described further in Notes 10.1 and 10.2. A one percent increase in the interest rates charged on the Senior Revolving Credit Facility would have a minimal effect. Tree Island does not use derivative instruments to manage the interest rate risk. Tree Island is exposed to interest rate risk on its Senior Revolving Credit Facility. Interest payable on the funds advanced under the Senior Credit Facility are based on Canadian Overnight Repo Rate Average (CORRA) for Canadian dollar borrowings and Secured Overnight Financing Rate (SOFR) for U.S. dollar borrowings. Tree Island Steel Q3 2025 20 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 18 NET LOSS PER SHARE The following reflects the loss and Share data used in the earnings per Share computations: Net loss Net loss per share ($/share) 19 PROVISIONS AND COMMITMENTS 19.1 CRA REASSESSMENT NOTICE (0.08) (0.07) (0.02) TI Canada received Notices of Reassessment (NORs) from the Minister of National Revenue under the Income Tax Act (Canada) and from Alberta Corporate Tax Act for the tax years 2015 through 2018. These NORS indicate that the tax liability, including interest, for the 2015 to 2018 taxation years is approximately $11.8 million (the “Tax Amount”) under the NORs and approximately $680,000 under the Alberta NORs. The Company disagrees with the disallowance of the bad debt deductions and capital losses and has contested the NORs and the Alberta NORs by filing notices of objection to start the appeals process and paying 50% of the Tax Amount as a deposit. Should TI Canada be successful in defending some or all of its tax filing position, any amounts paid to the CRA and TRA in relation to the Tax Amount in respect of which such defence was successful will be payable to the Company by the CRA and TRA with interest. If TI Canada is not successful, then any remaining federal or provincial taxes payable plus interest would have to be remitted by TI Canada, less the amounts already submitted to the CRA and TRA under the payment plan. There can be no assurance regarding the outcome of the appeals process or when a resolution may be reached. The Company has not recorded accruals in connection with the NORs or the Alberta NORs. See financial statement note 14.1. (2,141) (1,846) (2,082) (611) Weighted average number of shares outstanding: 25,940,614 26,113,570 25,983,920 26,628,953 (0.08) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Basic earnings (loss) per Share amount is calculated by dividing net income (loss) for the year by the weighted average number of Shares outstanding during the year. Diluted earnings per Share amount is calculated by dividing the net income for the year by the weighted average number of Shares outstanding during the year plus the weighted average number of Shares that would be issued on conversion of all the dilutive potential units into Shares. As at September 30, 20 --- 25, the Company does not have any instruments issued that could be dilutive. Tree Island Steel Q3 2025 21 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 19.2 DUTIES ON CERTAIN US WIRE EXPORTS 19.3 LITIGATION AND CLAIMS 19.4 PURCHASE COMMITMENTS 20 SEGMENTED INFORMATION 20.1 MARKET SEGMENTS Industrial Commercial Agricultural Residential Total revenue, net of freight and distribution costs 10,202 20,454 40,525 59,510 11,854 13,054 38,924 38,961 Revenues, net of freight and distribution costs, for each group for the three and nine months ended September 30, 2025 and 2024 were as follows: Three Months Ended September 30, 2025 2024 2025 2024 From time to time Tree Island is party to certain legal actions and claims. In the period there are no known claims, other than as disclosed in Note 19.1 and 19.2 which individually, or in the aggregate, is expected to have a material adverse effect on its financial position, consolidated statement of operations or cash flows. As at September 30, 2025, Tree Island’s wholly owned subsidiaries have committed to production material purchases (including finished goods), totalling $11.8 million ($27.3 million in 2024). 36,839 51,614 129,368 162,153 Tree Island operates primarily within one industry, the steel wire products industry, with no separately reportable operating segments. Tree Island groups its products into the following: Industrial, Commercial Construction, Agricultural and Residential Construction. For the nine months ended September 30, 2025, one customer in the Commercial Construction group generated revenue of $14.2 million, representing approximately 10% of the total gross revenue. The Company has been advised that certain shipments of wire produced in Canada and then subsequently sold to the U.S. from 2019 onwards should be subject to unpaid U.S. duties. The Company disagrees and is appealing the matter. Nine Months Ended September 30, 4,078 4,626 18,817 22,460 10,705 13,480 31,102 41,222 Tree Island Steel Q3 2025 22 NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 and 2024 20.2 GEOGRAPHIC SEGMENTS United States Canada International Total revenue, net of freight and distribution costs United States Canada Total non-current assets 21 TRADE EVENTS 21.1 U.S. AND CANADIAN TARIFFS 21.2 ANTI-DUMPING INVESTIGATION ON WIRE IMPORTED FROM CERTAIN COUNTRIES INTO CANADA On September 4, 2025, The CBSA issued a preliminary duty rates for all ten countries. Those duty rates range from 3.5% to 138.6%, depending on the country and exporter. The formal investigation continues, and a final determination is expected in early 2026. 66,459 64,227 54,324 53,830 Three Months Ended September 30, Nine Months Ended September 30, 75,106 76,276 Non-current assets for this purpose consist of property, plant and equipment, right-of-use assets and other non-current assets. These assets are attributed to geographic areas based on the locations of the subsidiary Company owning the assets. As at September 30, As at December 31, 2025 2024 With the evolving U.S. and Canada tariff environment, the Company continues to adjust its sales, operations and sourcing strategies. 2025 2024 The products are sold primarily to customers in the United States and Canada and are attributed to geographic areas based on the location of customers: 728 649 2,600 2,467 36,839 51,614 129,368 On April 22, 2025, Canada Border Services Agency (“CBSA”) i --- nitiated an investigation regarding the alleged dumping of carbon and alloy steel wire originating in or exported from the People’s Republic of China, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, the Republic of India, the Italian Republic, the Federation of Malaysia, the Portuguese Republic, the Kingdom of Spain, the Kingdom of Thailand, the Republic of Türkiye, and the Socialist Republic of Vietnam. As one of the primary Canadian producers of carbon steel wire, the Company is a supporter of this case. 2025 2024 162,153 15,316 31,541 60,309 95,459 20,795 19,424 20,782 22,446 Tree Island Steel Q3 2025 23 SHAREHOLDER INFORMATION TREE ISLAND STEEL Board of Directors: Amar S. Doman – Executive Chairman of the Board Peter Bull Sam Fleiser Joe Downes Executive Officers: Nancy Davies Chief Operating Officer Brian Liu Vice President, Finance and CFO Shares: Market Information Tree Island Steel is listed on the Toronto Stock Exchange trading symbol: TSL. Registrar and Transfer Agent Computershare Investor Services Inc. Corporate Head Office: 3933 Boundary Road Richmond, B.C. Canada, V6V 1T8 Website: www.treeisland.com Investor Relations: Ali Mahdavi Investor Relations (416)-962-3300 [email protected] Auditors: KPMG LLP Vancouver, B.C.