SEDAR Interim Financial Statements

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (EXPRESSED IN CANADIAN DOLLARS) MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING The condensed interim consolidated financial statements of Pedro Resources Ltd. (the “Company”) are the responsibility of the Company’s management. The condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting under International Financial Reporting Standards as issued by the International Accounting Standards Board, and reflect management’s best estimates and judgments based on information currently available. The Board of Directors is responsible for ensuring that management fulfills its responsibilities. “Brian Stecyk” “Ronald Mercier” Brian Stecyk, Director Ronald Mercier, Director Pedro Resources Ltd. Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian dollars) 2 See accompanying notes to the condensed interim consolidated financial statements September 30, December 31, Note 2025 2024 Assets Current Assets Unaudited Audited Cash Cash held in trust with lawyer 4 7,274 0 1 6,492 HST Receivables 7c 5,688 Total Current Assets 12,962 6,493 Mineral Claims Total Assets 8 1 12,962 1 6,494 Liabilities and Shareholders’ Deficiency Current Liabilities Accounts payable and accrued liabilities 10 856,416 682,261 Consideration payable 8.10 2,858 2,858 Promissory note payable Due to related party 9 5 31,536 - 22,911 - Total Current Liabilities 890,810 708,030 Non-Current Liabilities Convertible debentures Promissory note payable 8 9 555,071 10,139 483,091 9,696 Total Non-Current Liabilities 565,210 492,787 Total Liabilities 1,456,020 1,200,817 Shareholders’ Deficiency Share capital 11 9,818,040 9,818,040 Contributed surplus 11 186,367 186,367 Equity component of convertible debentures 10 129,115 129,115 Accumulated deficit (11,576,580) (11,327,845) Total Shareholders’ Deficiency (1,443,058) (1,194,323) Total Liabilities and Shareholders’ Deficiency 12,962 6,494 Nature of Business and Going Concern (Note 1) Approved by the Board "Ronald Mercier" "Brian Stecyk" On November 30, 2025 Director (Signed) Director (Signed) Pedro Resources Ltd. Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian dollars) 3 See accompanying notes to the condensed interim consolidated financial statements Expenses Three months ended Sept. 30 Nine months ended Sept. 30, Notes 2025 2024 2025 2024 Unaudited Unaudited Unaudited Unaudited Advertising & promotion - 1,600 - 27,105 Consulting fees - 10,500 - 167,130 General and administration 50 6,735 403 21,572 Professional fees 12 35,484 35,150 71,457 175,550 Regulatory and transfer agent fees 3,669 4,946 17,327 15,233 Shareholder communications 13,333 - 13,333 7,417 Travel Bank Charges HST – Audit/Appeal - 113 13 72,033 708 - 130 647 -- 72,033 14,568 1,062 - Loss before finance and other items Finance expenses (124,682) 10 (10,067) (59,769) (175,200) (9,525) (28,481) (429,636) (34,368) Accretion expense 10 (15,018) - (45,054) - Net loss and comprehensive loss for the period (149,767) (69,294) (248,735) (464,005) Loss per common share - basic and diluted (0.002) (0.005) (0.002) (0.01) Weighted average number of common shares outstanding – basic and diluted 39,810,830 36,570,830 39,810,830 35,570,830 Pedro Resources Ltd. Condensed Interim Consolidated Statements of Changes in --- Shareholders’ Deficiency (Expressed in Canadian dollars) Note Common Share Convertible Contributed Warrant Accumulated Total Shareholders’ Shares Capital Debentures Surplus Reserve Deficit Deficiency # $ $ $ $ $ $ $ Balance at December 31, 2022 32,579,830 9,449,540 - - 158,231 (10,397,741) (796,970) Net loss and comprehensive loss for the year - - - - - (229,065) (229,065) Share based compensation 11 - - - 292,796 - (292,796) - Transfer of expiry of warrants - - - 151,231 (151,231) - - Transfer of cancellation of options - - - (257,660) - 257,660 - Private placement 11 250,000 12,500 - - - - 12,500 Balance at December 31, 2023 32,820,830 9,462,040 - 186,367 - (10,661,942) (1,013,535) Net loss and comprehensive loss for the year - - - - - (665,903) (665,903) Share based payment 11 - - - 6,500 - - 6,500 Exercise of stock options 11 200,000 16,500 - (6,500) - - 10,000 Equity portion of convertible debenture 10 - - 129,115 - - - 129,115 Private placements 11 6,790,000 339,500 - - - - 339,500 Balance at December 31, 2024 39,810,830 9,818,040 129,115 186,367 - (11,327,845) (1,194,323) Net loss and comprehensive loss for the period (248,735) (248,735) Balance at September 30, 2025 39,810,830 9,818,040 129,115 186,367 - (11,576,580) (1,443,058) See accompanying notes to the condensed interim consolidated financial statements 4 Pedro Resources LTD. Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian dollars) For nine months ended Sept 30 Note 2025 2024 Operating activities unaudited Unaudited Net loss for the period (248,734) (479,560) Accretion expense 45,054 - - Share-based compensation Financing expense Items not affecting cash: Prepaid Accounts payable and accrued liabilities - 30,835 - 170,247 5,448 - - 30,000 73,263 HST receivables Cash held in trust with lawyer Cash flow used in operating activities (5,688) - (8,286) (4,198) - (375,047) Financing activities Advances of Promissory Payables 9,067 (31,500) Proceeds from private placement - 350,500 Advance from related party - - Cash flow provided by financing activities 9,067 (382,000) Net increase (decrease) in cash for the period 781 (6,953) Cash at beginning of the period 6,493 2,212 Cash at end of the period 7,274 9,165 See accompanying notes to the condensed interim consolidated financial statements 5 Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 6 1. Nature of Business and Going Concern Pedro Resources Ltd. (the “Company”) was a publicly traded company actively engaged in the acquisition, exploration and development of mineral properties. It is currently undertaking a change of business as discussed below. The address of the Company’s corporate office and principal place of business is Suite 2200, HSBC Building, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8. The operational office is Irwin Lowy LLP 217 Queen Street West Suite 401Toronto, ON M5V 0R2 These consolidated financial statements have been prepared using International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) on a going concern basis which assumes the Company will be able to meet its obligations and continue its operations for the next 12 months. During the nine months ended September 30, 2025, the Company incurred a net loss and comprehensive loss of $248,735, (2024 – $464,005, --- ) and, at September 30, 2025, had a shareholders’ deficit of $11,576,580 (December 31, 2024 – $11,327,845) and had a working capital deficit of $1,443,058, (December 31, 2024 – $1,194,323). The Company’s continuation as a going concern is dependent upon the successful implementation of its collaboration agreements with Fixed Earth Innovations Ltd., Dirty Dirt Services Ltd., OIL-OUT Ltd. and FCS Solutions Ltd. The Company is undertaking a change of business through the redeployment of its assets and resources from the mining exploration business towards the development of biotechnology for the remediation and reclamation of contaminated sites and properties and the use of microbes by the agricultural industry for the health and growth of plants. There is no assurance that the Company will continue to be able to obtain adequate financing in the future, or that such financing will be on terms acceptable to the Company. These material uncertainties may cast significant doubt about the Company’s ability to continue as a going concern. 2. Basis of Presentation (i) Statement of Compliance These condensed interim consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”). (j) Principles of Consolidation These condensed interim consolidated financial statements include the accounts of Pedro Resources Ltd. and its wholly-owned subsidiary, Voisey’s Bay West Nickel & Cobalt Corp. (“Voisey’s Bay”). All intercompany balances and transactions have been eliminated upon consolidation. (k) Basis of Measurement These condensed interim consolidated financial statements have been prepared on a going concern basis, under the historical cost convention except for certain financial instruments that have been measured at fair value. In addition, these condensed interim consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The principal accounting policies and critical estimates and judgements used when compiling these consolidated financial statements are set out below. These consolidated financial statements were approved by the Board of Directors on November 30 2025. 3. Significant Accounting Policies a) Critical Accounting Estimates, Judgements and Assumptions The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the condensed interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these judgments, estimates and assumptions could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future periods. The significant areas of estimation uncertainty considered by management in preparing the condensed interim consolidated Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherw --- ise noted) For the nine months ended September 30, 2025 and 2024 7 financial statements were as follows: Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 8 (i) Stock-based compensation expense: The Company uses the Black-Scholes option pricing model to determine the fair value of options in order to calculate stock-based compensation expense. The Black-Scholes model involves six key inputs to determine the fair value of an option: risk-free interest rate, exercise price, market price at the date of issue, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of stock-based compensation expense. (ii) Valuation of warrants: The Company uses the Black-Scholes option pricing model to calculate the value of warrants issued using the relative fair value method as part of the Company’s private placements. As noted above, the Black- Scholes model requires six key inputs to determine a value for a warrant: risk free interest rate, exercise price, market price at date of issue, expected dividend yield, expected life and expected volatility. Certain of the inputs are estimates which involve considerable judgment and are, or could be, affected by significant factors that are out of the Company’s control. For example, a longer expected life of the warrant or a higher volatility number used would result in an increase in the warrant value. The significant areas of judgment considered by management in preparing the condensed interim consolidated financial statements are as follows: (i) Going concern: The Company’s management has made an assessment of its ability to continue as a going concern and the consolidated financial statements continue to be prepared on a going concern basis. However, management does not believe the Company has sufficient cash on hand to meet the Company’s operating expenditures beyond September 30, 2025 unless it completes a private placement and raises new capital. As a result, this may cast significant doubt upon the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. (ii) Deferred tax assets: Deferred tax assets are recognized in respect of tax losses and other temporary differences to the extent it is probable that taxable income will be available against which the losses can be utilized. Judgment is required to determine the amount of deferred tax assets that can be recognized based upon the likely timing and level of future taxable income together with future tax planning strategies. b) Loss per common share Basic loss per common share is computed by dividing the loss for the year by the weighted average number of common shares outstanding during the year. The computation of diluted loss per common share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a --- dilutive effect on the loss per common share. The calculation proved to be anti-dilutive for the years ended September 30, 2025 and 2024. c) Stock-based compensation The Company grants stock options to buy common shares of the Company to directors, officers, employees and service providers. The Company’s Board of Directors grants such options for periods of up to five years, with vesting periods determined at its sole discretion and at prices equal to or greater than the closing market price on the day preceding the date the options were granted. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee. Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 9 d) Stock-based compensation (continued) The fair value of options granted to directors, officers or employees is measured at the grant date using the Black- Scholes option pricing model, and is expensed over the period during which the share purchase options vest. The fair value of the share purchase options granted is measured taking into account the terms and conditions upon which the share purchase options were granted. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instrument issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share purchase options that are expected to vest. e) Impairment At the end of each reporting period the carrying amounts of the Company’s assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in the statement of loss for the period. For an asset that does not generate independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but only to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. f) Mineral Proper --- ties and Exploration Expenditures The Company expenses all costs relating to the acquisition of, exploration for and development of mineral claims. Such costs include, but are not limited to, acquisition costs, geological, geophysical studies, exploratory drilling and sampling. Once a project has been established as commercially viable and technically feasible, related development expenditures are capitalized. This includes costs incurred in preparing the site for mining operations. The Company announced in 2023 that it would no longer be in the mining business and Voisey Bay claims were not renewed. g) Financial Assets and Liabilities IFRS 9 – Financial instruments (“IFRS 9”) includes guidance on the classification and measurement of financial assets. Under IFRS 9, financial assets are classified and measured either at amortized cost, fair value through profit or loss (“FVTPL”) or fair value through other comprehensive income (“FVTOCI”) based on the business model in which they are held and the characteristics of their contractual cash flows. Financial assets Financial assets are classified as either financial assets recorded at FVTPL, amortized cost, or FVTOCI. The Company determines the classification of its financial assets at initial recognition. i. Financial assets recorded at FVTPL Financial assets classified as FVTPL are measured at fair value with changes in fair value on those items recognized in net loss and comprehensive loss. Financial assets are classified as FVTPL if they do not meet the criteria of amortized cost or FVTOCI. ii. Amortized Cost Financial assets classified as amortized cost are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are carried at amortized cost less any provision for impairment. Individually significant receivables are considered for impairment when they are past due or when other objective Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 10 evidence is received that a specific counterparty will default. The Company’s cash and taxes and other receivables are classified as financial assets measured at amortized cost. iii. Financial assets recorded at FVTOCI Financial assets are recorded at FVTOCI when the change in fair value is attributable to changes in the Company’s credit risk. The Company did not hold any financial assets measured at FVTOCI as at September 30, 2025 and December 31, 2024. Financial liabilities Financial liabilities are classified as either financial liabilities at FVTPL or at amortized cost. The Company determines the classification of its financial liabilities at initial recognition. i. Amortized cost Financial liabilities measured at amortized cost, including borrowings, are initially measured at fair value, net of transaction costs. Financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest recognized on an effective yield basis. The effective yield basis is a method of calculating the amortized cost of a financial liability and of allocating interest costs over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the net carrying amount on initial recognition. The Company’s accounts payable and a --- ccrued liabilities, and due to consideration payable approximate their amortized cost. ii. Financial liabilities recorded at FVTPL Financial liabilities are classified as FVTPL if they do not fall into the amortized cost category detailed above. Transaction costs Transaction costs associated with financial instruments carried at FVTPL are expensed as incurred, while transaction costs associated with all other financial instruments are included in the initial carrying amount of the asset or the liability. Recognition and measurement Instruments classified as FVTPL are measured at fair value with gains and losses arising from the changes in fair value of the instruments presented in the statement of loss and comprehensive loss as the net unrealized gains or losses in the period they arise. Instruments classified as amortized cost are measured at amortized cost using the effective interest rate method. Instruments classified as FVOCI are measured at fair value with unrealized gains and losses recognized in other comprehensive loss. Determination of fair values The determination of fair value requires judgement and is based on market information, where available and appropriate. At the end of each financial reporting period, the Company’s management estimates the fair value of securities based on quoted trading prices at the end of the reporting period or the closing trade price on the last day the security traded if there were no trades at the end of the reporting period. Derecognition of financial liabilities The Company de-recognizes financial liabilities when the obligations are discharged, cancelled or expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in the condensed interim consolidated statement of loss and comprehensive loss. Impairment of financial assets Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 11 Financial assets not measured at FVTPL are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the financial assets have been negatively impacted. Evidence of impairment could include significant financial difficulty of the issuer or counterparty; default or delinquency in interest or principal payments; or the likelihood that the borrower will enter bankruptcy or financial reorganization. The carrying amounts of the Company’s financial assets are reviewed at each reporting date to determine if there is any indication of impairment. As of September 30, 2025 and September 30, 2024, the fair values of the financial assets classified at amortized cost approximated their carrying value due to their short-term nature. Financial instruments recorded at fair value Financial instruments recorded at fair value on the condensed interim consolidated statements 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: • Level 1 – valuation based on unadjusted quoted prices in active --- markets for identical assets or liabilities; • Level 2 – valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and • Level 3 – valuation techniques using inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs). h) Valuation of Private Placement Units Issued The Company follows the relative fair value method with respect to the measurement of common shares and warrants issued as private placement units. The proceeds from the issuance of units are allocated between share capital and warrants. Unit proceeds are allocated to shares and warrants using the Black-Scholes option pricing model and the share price at the time of financing. If and when the warrants are exercised, the applicable relative fair value recognized in warrants is transferred to share capital. Any consideration paid on the exercise of the warrants is credited to share capital. For those warrants that expire unexercised on maturity, the recorded value is transferred to contributed surplus. i) Deferred taxes Deferred tax assets and liabilities are recognized for deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted or substantively enacted tax rates expected to apply when the asset is realized or the liability settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or loss in the period that substantive enactment occurs. A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, the deferred tax asset is reduced. j) New Accounting Standards and Amendments Certain pronouncements have been issued by the IASB that are effective for annual periods beginning on or after January 1, 2024. The Company has assessed the amendments and determined that there is no material impact on the accounting and presentation of the consolidated financial statements. Certain pronouncements have been issued by the IASB that are applicable for accounting periods after June 30, 2025. All other IFRSs and amendments issued but not yet effective have been assessed by the Company and are not expected to have a material impact on the Company’s condensed interim consolidated financial statements. Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 12 4. Cash Cash comprises cash on hand, demand deposits and cash held in trust with the lawyer. The Company does not have the cash equivalents as at September 30, 2025 and 2024. 5. Due to Related Party The are no amounts due to a shareholder during the nine months ended September 30, 2025. 6. Capital Management The capital structure of the Company consists of shareholders’ equity or deficit. The Company’s objectives when managing capital are to ensure sufficient liquidity for operations and adequate funding for growth and capital expenditures while maintaining an efficient balance between debt and --- equity. The Company makes adjustments to its capital structure upon approval from its Board of Directors, in light of economic conditions and the Company’s working capital requirements. There were no changes in the Company’s approach to capital management during the 1st quarter of 2025. The Company does not presently utilize any quantitative measures to monitor its capital. There are no external restrictions on capital. 7. Financial Instruments The Company is exposed in varying degrees to a variety of financial instrument related risks. The Company’s Board of Directors approves and monitors its risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows: a. Fair Values For the Company’s financial instruments, including cash, other receivables, due to related parties, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their immediate or short-term maturity. b. Currency Risk The Company currently does not have any significant exposure to foreign currency risk. c. Credit Risk Credit risk arises from cash held with banks and financial institutions, and credit exposure to clients or tax authorities, including outstanding receivables. The maximum exposure to credit risk is equal to the carrying value of the financial assets. To reduce credit risk, cash is held at major financial institutions. d. Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company tries to ensure that there are sufficient funds to meet its short-term business requirements, considering its anticipated cash flows from operations and its holdings of cash. Currently, the Company’s main source of funding is from the issuance of equity securities for cash, primarily through private placements. As at June 30, 2025, the Company had cash of $1,126 (June 30, 2024 - $799), cash held in trust with lawyer at June 30, 2025 $18,666. ( June 30, 2024 – 6,492), accounts payable and accrued liabilities of $673,033 (March 31, 2024 - $89,960) and due to related party of $0 (June 30, 2024 - $0). 8. Mineral Claims The Company has an ownership interest in one mining exploration project, namely its Voisey’s Bay property. Mineral claims on September 30, 2025 are valued at $1. The company has not renewed mineral claims from the time of the acquisition. Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 13 Voisey’s Bay Acquisition On July 14, 2021, the Company acquired (the “Transaction”) all of the issued and outstanding common shares in the capital of Voisey's Bay. The Transaction was carried out by way of a share purchase agreement dated November 27, 2020 between the Company, Voisey's Bay and the shareholders of Voisey's Bay (collectively, the "Vendors"). Voisey's Bay is a private company formed under the laws of Ontario, whose sole asset at the time of acquisition was its 100% interest in 13 prospective mineral licenses, comprising 721 claims (18,025 hectares) (the "Property"), 4.5 km south of Vale's --- Voisey's Bay Mine in the province of Newfoundland and Labrador, Canada (the "Vale Property"). As consideration for the Transaction, the Company issued an aggregate of 8,000,000 common shares in the capital of the Company (the "Consideration Shares") at a fair value of $0.125 per Consideration Share to the vendors and committed to make cash payments of $155,000 on each of the first three anniversaries of the closing of the Transaction. The total cash consideration payable of $465,000 was recorded in the consolidated statement of financial position using a discounted rate of 6%, for a present value of $414,317 on initial recognition. All securities issued pursuant to the Transaction were subject to a statutory hold period of four months and one day from the issuance thereof, as applicable, in accordance with applicable securities laws. In connection with the Transaction, the Company granted a 2.5% net smelter returns royalty ("NSR") in favour of a syndicate, subject to the ability of the Company to purchase 1.5% of the NSR (resulting in the remaining NSR being 1%) for a purchase price of $1,500,000 at any time before the fifth anniversary of the date hereof. On December 13, 2023, the share purchase agreement dated November 27, 2020 was amended to allocate the amounts payable to the Voisey Bay vendors to a shareholder of the company for compensation of expenses between the vendor that occurred prior to the Voisey Bay purchase. In addition, the officer of the Company to be paid $465,000 in three equal annual installments of $155,000 each. (a) In January 2024, the Company completed a non-brokered private placement of a convertible debenture (the “Debenture”) amounting to $725,000 to a shareholder of the Company (see Note 10). An amount of $457,325 was allocated to the convertible debentures from the consideration payable for the purchase of the Voisey Bay with the remaining balance of $2,858 payable to the shareholders who have not yet signed the amended agreement to transfer their consideration to the shareholder of the Company. 9. Promissory Notes Payable The Promissory notes are due to two directors and officers of the Company, bear interest at 6% per annum and have no fixed terms of repayment. The amounts and maturity dates are as follows: Promissory note payable on demand $ 31,536 Promissory note payable, due Feb. 27, 2026 10,139 $ 41,675 As at September 30, 2025 the accrued interest on promissory notes was $2,036 and $639, respectively (2024 – $911 and $175) for the total outstanding as at June 30, 2025. On September 03, 2025 a director increased their note - payable on demand from $24,500 to $29,500 an increase of $5,000. 10. Convertible Debentures On December 19, 2023, the Company entered into a non-brokered private placement of an unsecured convertible debentures (the “Debenture) at a price of $725,000 per debenture for gross proceeds of $725,000 with a shareholder of the Company. The Debenture matures in 3 years following the date of issue and bear interest at 7.2% per annum. Commencing on December 19, 2023. The Debenture matures in 3 years following the date of issue and bear interest at 7.2% per annum. Commencing on December 31, 2024, (i) in cash: or (ii) the equivalent value in common shares based on the price per common share $0.05 per common share. The holder of the debenture will have the right from time to time and at any time after the date of issuance, to the maturity date, to convert all or any portion of the outstanding --- principal amount into common shares, at a conversion price of $0.05 per share subject to adjustment as herein provided. The above convertible debenture is a compound financial instrument. The Company allocated $595,884 of the net issuance costs of the debt to the liability component and $129,115 to the equity component., Management estimated the fair value of the debt using a discount rate of 1.5% applicable to the Company’s business, with the Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 14 residual value allocated to the equity component. December 31, 2024 Funds Received Interest Accretion September 30, 2025 $ $ $ $ $ 1 43,388 23,000 - - 66,388 2 2,858 - - - 2,858 3 483,091 - 26,926 45,054 555,071 1 Balance due to the shareholder of the Company included in accounts payable and accrued liabilities 2 Consideration payable Note 8 3 Convertible Debenture 11. Shareholders’ Deficiency (i) Share Capital The Company’s authorized share capital includes an unlimited number of Class “A” common shares having no par value. At September 30, 20225, 39,810,830 common shares (December 31, 2025 – 39,810,830) were issued and outstanding. Please refer to the consolidated statements of changes in shareholders’ deficiency for movements in share capital during the years ended December 31, 2024 and December 31, 2023. In May 2024, the Company issued 5,530,000 common shares for total proceeds of $276,500 through a non- brokered private placement as tranche 1 incurring nil share issue costs. In June 2024, the Company issued 940,000 common shares for total proceeds of $47,000 through a non- brokered private placement as tranche 2 incurring nil share issue costs. For the period from June 2024 to December 31, 2024, the Company issued 320,000 common shares for total proceeds of $16,000 to certain shareholders of the Company. (j) Share purchase options In 2011, the Company adopted a stock option plan (“SOP”) pursuant to which the Company is able to grant to directors, officers, employees and service providers options to purchase common shares of the Company. The maximum number of options which may be outstanding at any point in time is 10% of the Company’s then outstanding common shares. Generally, options granted will have a maximum term of ten years and a vesting period determined by the Company’s Board of Directors. On March 3, 2022, the Company granted 2,500,000 stock options to certain directors, officers, employees and consultants of the Company. The stock options entitle the holders to purchase the same number of common shares of the Company at a price of $0.15 per share for a period of five years. 50% of the options vested immediately on the date of grant, while the remaining 50% vested on September 3, 2023. The fair value of the stock options granted was estimated to be $292,796, which amount was expensed in 2023. On December 15, 2023, 2,200,000 options were cancelled by the Company. The fair market value of the cancelled options totaled $257,660, which amount was transferred from contributed surplus to accumulated deficit. On August 8, 2024, the Company granted 200,000 stock options to a consultant of the Company. The stock options entitle the holders to purchase the same number of common shares of the Company at a price of $0.05 per share for a period of 2 years with immediate vesting on the date of grant. The --- fair value of the stock options granted was estimated to be $6,400 which amount was expensed in 2024. After August 8, 2024, the consultant exercised the stock options for gross proceeds of $10,000. Contributed surplus records items recognized as share-based compensation expense until such time that the Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 15 stock options are exercised, at which time the corresponding amount will be transferred to share capital. If the options expire unexercised or are cancelled, the amount recorded is transferred to the accumulated deficit. (k) Stock Options Outstanding The following is a summary of stock option movements during the years ended December 31, 2025 and 2024: September 30, 2025 December 31, 2024 Number of Options Weighted Avg Exercise Price Number of Options Weighted Avg Exercise Price Balance at January 1 - $ - 2,500,000 $ 0.15 Granted (August 08, 2024) Exercised (August 10, 2024) 200,000 200,000 $ 0.05 $ 0.05 - - Cancelled (Dec. 15, 2024) - - (2,200,000) 0.15 Balance at June 30 200,000 $ 0.05 300,000 $ 0.15 All the options outstanding at December 31, 2024 were vested except for 300,000 (December 31, 2023 - 2,500,000). These options expire on March 3, 2027, or other such time in accordance with the Company’s stock option plan. The fair value of the 2,500,000 stock options granted on March 3, 2023 was estimated using the Black-Scholes option pricing model for pricing options using the following assumptions: Risk-free interest rate 1.43% Expected stock volatility 108% Expected life 5 years Dividend yield 0% The fair value of the 200,000 stock options granted on August 8, 2024 was estimated using the Black-Scholes option pricing model for pricing options using the following assumption: Risk-free interest rate 2.8% Expected stock volatility 248% Expected life 2 Years Dividend yield 0% (l) Warrants The Company has issued warrants as part of equity financing. The following table summarizes movements in outstanding warrants during the three months ended June 30, 2025, and 2024: Number outstanding Weighted Average Exercise Price Balance at January 1, 2023 and 2024 2,035,780 $0.30 Expired (September 15, 2024) (2,035,780) 0.30 Balance at December 31, 2024 - - - - Balance at September 30, 2025 - - 12. Key Management Personnel and Related Party Transactions Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel Pedro Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements (Expressed in Canadian dollars, unless otherwise noted) For the nine months ended September 30, 2025 and 2024 16 consists of executive and non-executive members of the Company’s Board of Directors as well as corporate officers, including the Company’s Chief Executive Officer and Chief Financial Officer and/or their companies. The only officer that any compensation during the period was the Chief Financial Officer. Compensation of key management personnel for the nine months ended September 30, 2025 and 2024 was as follows: 2025 2024 Short term compensation $ 12,500 $ 32,500 13. HST Payable Revenue Canada performed an Audited on all quarterly filings for the years 2020 to 2023. As a result of this audit all returns --- have been reversed and a balance of $72,033.41 has been assessed. Pedro is in the process of appealing the decision and has submitted all requested documents to the CRA.