SEDAR Interim Financial Statements

TELESCOPE INNOVATIONS CORP. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2026 AND FEBRUARY 28, 2025 (UNAUDITED) TELESCOPE INNOVATIONS CORP. Condensed Consolidated Interim Statements of Financial Position (Expressed in Canadian Dollars) As at February 28, 2026 and August 31, 2025 (Audited) 5 Note February 28, 2026 August 31, 2025 (Audited) ASSETS Current assets Cash $ 2,746,118 $ 2,701,390 Accounts receivable 435,591 197,460 Contract assets and grants recoverable 14 295,317 213,500 Inventory 5 358,924 597,515 Sales taxes recoverable 33,311 32,987 Prepaid expenses and deposits 1,145,468 100,659 Total current assets 5,014,729 3,843,511 Equipment 7 1,351,890 1,383,790 Right of use asset 11 1,981,341 2,051,113 Total assets $ 8,347,960 $ 7,278,414 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 649,007 $ 1,150,734 Amounts due to related parties 10 4,645 529,852 Loan payable to shareholders 10,18 502,666 1,210,511 Lease liabilities – short term 11 173,663 134,292 Deferred revenue 176,904 131,616 Total current liabilities 1,506,885 3,157,005 Lease liabilities – long term 11 2,081,689 2,116,879 Total liabilities 3,588,574 5,273,884 EQUITY Share capital 8 17,068,598 10,341,585 Subscriptions received 8 - 1,822,047 Equity reserves 9 4,000,717 3,470,114 Accumulated deficit (16,309,929) (13,629,216) Total equity 4,759,386 2,004,530 Total liabilities and equity $ 8,347,960 $ 7,278,414 Nature of operations and going concern (Note 1) Commitments (Note 17) Approved by the Board on April 13, 2026: “Robert Mintak” “James Andrew Robinson” Director Director (The accompanying notes are an integral part of these consolidated financial statements) TELESCOPE INNOVATIONS CORP. Condensed Consolidated Interim Statements of Comprehensive Income (Loss) (Expressed in Canadian Dollars) For the Three and Six Months Ended February 28, 2026, and 2025 6 Three months ended Six months ended Note 2026 2025 2026 2025 Revenues Sales of products and services 12 $ 1,506,382 $ 723,584 $ 4,201,840 $ 1,868,283 Grant income 13 134,904 280,537 139,631 340,035 1,641,286 1,004,121 4,341,471 2,208,318 Expenses Advertising and promotion 445,271 5,144 479,537 31,613 Amortization 329,997 177,351 445,586 340,514 Consulting 10 394,882 293,853 817,120 502,614 Foreign exchange loss (gain) 16,040 (35,087) 32,782 (19,374) Insurance 13,443 19,089 26,874 36,420 Interest on right of use asset 11 94,624 63,348 137,821 124,832 Lab operations and supplies 123,001 111,111 520,527 189,120 Management fees 10 50,580 50,580 386,874 101,000 Office and miscellaneous 120,277 71,153 222,645 114,387 Parts 5 256,613 72,410 1,257,580 241,549 Professional fees 201,291 102,745 452,757 180,529 Regulatory and transfer agent fees 12,255 14,418 25,664 30,016 Rent (69,806) 14,985 17,729 29,970 Salaries and wages 710,671 646,517 1,366,834 1,170,286 Share-based payments 9 317,318 65,900 527,936 65,900 Travel 90,313 43,953 303,918 125,828 (3,106,770) (1,717,470) (7,022,184) (3,265,204) Net income (loss) and comprehensive income (loss) $ (1,465,484) $ (713,349) $ (2,680,713) $ (1,056,886) Basic and diluted earnings (loss) per share $ (0.02) $ (0.01) $ (0.03) $ (0.02) Weighted average number of common shares outstanding. – basic and diluted 80,805,298 53,665,569 80,805,298 53,679,333 (The accompanying notes are an integral part of these consolidated financial statements) TELESCOPE INNOVATIONS CORP. Condensed Consolidated Interim Statements of Ch --- anges in Equity (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026, and 2025 7 Number of Common Shares Share Capital Amount Subscriptions Received Equity Reserves Accumulated Deficit Total Equity Balance, September 1, 2024 53,665,569 $ 10,337,105 $ - $ 3,246,581 $ (12,066,404) $ 1,517,282 Share-based payments (Note 9) - - - 65,900 - 65,900 Exercise of share options 32,000 4,480 - - 4,480 Net and comprehensive loss for the period - - - - (1,056,886) (1,056,886) Balance, February 28, 2025 53,697,569 $ 10,341,585 $ - $ 3,312,481 $ (13,123,290) $ 530,776 Balance, September 1, 2025 53,697,569 $ 10,341,585 $ 1,822,047 $ 3,470,114 $ (13,629,216) $ 2,004,530 Share-based payments (Note 9) - - - 527,936 - 527,936 Subscriptions received (Note 8) - - (1,822,047) - - (1,822,047) Shares issued (Note 8) 27,107,729 6,834,126 - - - 6,834,126 Share issuance cost (Note 8) - (107,113) - - - (107,113) Restricted share units (Note 9) - - 2,667 - 2,667 Net and comprehensive loss for the period - - - - (2,680,713) (2,680,713) Balance, February 28, 2026 80,805,298 $ 17,068,598 $ - $ 4,000,717 $ (16,309,929) $ 4,759,386 (The accompanying notes are an integral part of these consolidated financial statements) TELESCOPE INNOVATIONS CORP. Condensed Consolidated Interim Statements of Cash Flow (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026, and 2025 8 2026 2025 CASH PROVIDED BY (USED IN): Operating Activities Net loss $ (2,680,713) $ (1,056,886) Adjustments for non-cash items: Share-based payments 530,603 65,900 Amortization 384,720 340,515 Change in non-cash working capital items: Sales taxes recoverable (324) 50,459 Accounts receivable (238,131) 1,277,808 Prepaid expenses (1,044,809) 43,420 Contract assets and grants recoverable (81,817) 32,217 Interest on right of use asset 137,821 124,832 Inventory 238,591 87,591 Due to related parties (525,207) 51,391 Accounts payable and accrued liabilities (501,727) 280,553 Deferred revenue 45,288 18,567 Cash provided (used) in operating activities (3,735,705) 1,316,367 Investing Activities Purchases of equipment (283,048) (694,543) Sale of equipment - - Cash provided (used) in investing activities (283,048) (694,543) Financing Activities Loan from shareholders (707,845) - Lease payments (133,640) - Subscriptions received (1,822,047) - Shares issued (net of issuance costs) 6,727,013 - Exercise of share options - 4,480 Cash provided by financing activities 4,063,481 4,480 Increase in cash during the period 44,728 626,304 Cash, Beginning 2,701,390 337,008 Cash, Ending $ 2,746,118 $ 963,312 Supplemental Cash Flow Information: Interest paid $ 29,994 $ - (The accompanying notes are an integral part of these consolidated financial statements) TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 9 1. NATURE OF OPERATIONS AND GOING CONCERN Telescope Innovations Corp. (the “Company” or “Telescope”) was incorporated under the British Columbia Business Corporations Act on March 25, 2019. The Company is focused on doing business as a Contract Research Organization (“CRO”) to develop intellectual property, contract research and build automation products. The address of the Company’s corporate office and principal place of business is 301 – 2386 East Mall, Vancouver, BC, V6T 1Z3, Canada. The Company’s common shares trade on the Canadian Securities Exchange (“CSE”) under the symbol “TELI”, --- on the OTCQB under the symbol “TELIF” and on the Frankfurt Stock Exchange ("FSE") under the symbol "J4U". These consolidated financial statements have been prepared on a going concern basis which assumes the continued realization of assets and satisfaction of liabilities and commitments in the normal course of business. During the period ended February 28, 2026, the Company incurred a net loss of $2,680,713 and had an accumulated deficit of $16,309,929, which has been funded primarily by equity financing. The Company has had a history of significant losses, accumulated deficits and negative cash flows from operations. The Company’s ability to continue as a going concern is dependent upon its ability to continue to be profitable and generate positive cash flows, obtaining additional financing or maintaining continued support from its creditors. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in these consolidated financial statements. Such adjustments could be material. 2. MATERIAL ACCOUNTING POLICIES a) Statement of compliance These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The consolidated financial statements were approved and authorized for issuance by the Board of Directors on April 13, 2026. b) Basis of consolidation These consolidated financial statements include the assets and operations of the Company and its wholly owned subsidiaries 1280225 B.C. Ltd and Telescope Innovations USA Corp. All significant intercompany transactions and balances have been eliminated upon consolidation. On August 30, 2022, the Company amalgamated with its wholly owned subsidiary ClearMynd Technology Solutions Corp. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 10 2. MATERIAL ACCOUNTING POLICIES (continued) c) Basis of measurement These consolidated financial statements have been prepared on the historical cost basis, with the exception of financial instruments which are measured at fair value, as explained in the accounting policies set out below. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The functional and presentation currency of the Company and its subsidiaries is the Canadian dollar. d) Cash and cash equivalents Cash in the statements of financial position is comprised solely of cash held in bank accounts. The Company did not have any cash equivalents as of February 28, 2026 and 2025. e) Income taxes i) Current income tax Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the statement of financial position date, and includes any adjustments to tax payable or receivable in respect of previous years. ii) Deferred income tax Deferred income taxes are recorded using the liability metho --- d whereby deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the statement of financial position date. Deferred tax is not recognized for temporary differences which arise on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting, nor taxable profit or loss. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. f) Revenue from contracts with customers The Company applies IFRS 15, Revenue from Contracts with Customers. Accordingly, revenue is recognized when a customer obtains control of the goods or services. Determining the timing of the transfer of control – at a point in time or over time – requires judgement. Revenue is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The Company generates revenues through contracts with customers to provide the sale of automation products and contract research. Revenue relating to the sale of products and services is recognized when control and ownership of the product has transferred or the deliverable for services is provided to the customer and an amount that reflects the consideration the Company expects to receive in exchange for the goods and services. Revenues from contract research are recognized upon the achievement of agreed to milestones or periodically over the term of the contract when invoiced to the customer by the Company. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 11 2. MATERIAL ACCOUNTING POLICIES (continued) In instances where the Company cannot reasonably measure progress towards completing its performance obligations but expects to recover its costs incurred, the Company recognizes revenue only to the extent of costs incurred until it can reasonably measure the outcome of its performance obligations. Deferred revenues represent amounts invoiced in excess of revenues recognized. For contracts with multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. g) Grant income The Company applies IAS 20, Accounting for Government Grants and Disclosure of Government Assistance. Accordingly, government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises expenses for the related costs for which the grants are intended to compensate. A government grant is recognised only when there is reasonable assurance that (a) the entity will comply with any conditions attached to the grant and (b) the grant will be received. Res --- earch grants relating to income are reported separately. Amounts recognized as grant income which have not been received are recorded as grants recoverable h) Inventory Parts, work in process, and finished goods inventories are stated at the lower of cost and net realizable value, with cost being determined using first-in-first-out (“FIFO”) method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. The Company maintains three categories of inventory: parts, work in process, and finished goods. i) Financial instruments Financial Assets On initial recognition, financial assets are recognized at fair value and are subsequently classified and measured at: (i) amortized cost; (ii) fair value through other comprehensive income (“FVOCI”); or (iii) fair value through profit or loss (“FVTPL”). The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. A financial asset is measured at fair value net of transaction costs that are directly attributable to its acquisition except for financial assets at FVTPL where transaction costs are expensed. All financial assets not classified and measured at amortized cost or FVOCI are measured at FVTPL. On initial recognition of an equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 12 2. MATERIAL ACCOUNTING POLICIES (continued) The classification determines the method by which the financial assets are carried on the statement of financial position subsequent to inception and how changes in value are recorded. The Company measures cash at FVTPL. The Company’s accounts receivable is measured at amortized cost Impairment of Financial Assets IFRS 9 uses the expected credit loss (“ECL”) model. The credit loss model groups receivables based on similar credit risk characteristics and days past due in order to estimate bad debts. The ECL model applies to the Company’s receivables. An ECL impairment model applies which requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset’s original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period. In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at --- the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. Financial Liabilities Financial liabilities are designated as either: (i) fair value through profit or loss; or (ii) amortized cost. All financial liabilities are classified and subsequently measured at amortized cost except for financial liabilities required to be measured at FVTPL or if the Company has opted to measure them at FVTPL. The classification determines the method by which the financial liabilities are carried on the statement of financial position subsequent to inception and how changes in value are recorded. Accounts payable, leases, and due to related parties are measured at amortized cost. The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and/or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. j) Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or corporate entities. A transaction is considered to be a related party when there is a transfer of resources or obligations between related parties. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 13 2. MATERIAL ACCOUNTING POLICIES (continued) k) Equipment Equipment is recorded at historical cost less accumulated amortization and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Residual values and useful economic lives are reviewed at least annually and are adjusted if appropriate at each reporting date. Subsequent expenditures relating to an item of equipment are capitalized when it is probable that future economic benefits from the use of the assets will be increased. All other subsequent expenditures are recognized as repairs and maintenance expenses during the period in which they are incurred. Gains and losses on disposal of equipment are determined by comparing the proceeds from disposal with the carrying amount of the asset and are recognized net within other income in the consolidated statement of comprehensive loss. Amortization is recognized in profit or loss and equipment is amortized using the straight-line method over their estimated useful lives of five years. l) Research and development expenditures Research expenditures are expensed in the period incurred. Product development expenditures are expensed in the period incurred unless the product under development meets specific criteria related to technical, market and financial feasibility for deferral and amortization. The Company’s policy is to amortize deferred product development expenditures over the expected future life of the product once product revenues or royalties are recorded. m) Lease and right-of-use asset The Company applies IFRS 16, Leases. Accordingly, the standard provides a single lessee accounting m --- odel, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Upon lease commencement a lessee recognises a right-of-use asset and a lease liability. The right-of-use asset is initially measured at the amount of the lease liability plus any initial direct costs incurred by the lessee. Adjustments may also be required for lease incentives, payments at or prior to commencement and restoration obligations or similar. After lease commencement, a lessee shall measure the right-of-use asset using a cost model, unless: i. the right-of-use asset is an investment property and the lessee fair values its investment property under IAS 40; or ii. the right-of-use asset relates to a class of Property, Plant, and Equipment to which the lessee applies IAS 16’s revaluation model, in which case all right-of-use assets relating to that class of Property, Plant, and Equipment can be revalued. Under the cost model a right-of-use asset is measured at cost less accumulated depreciation and accumulated impairment. The lease liability is initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease if that can be readily determined. If that rate cannot be readily determined, the lessee shall use their incremental borrowing rate. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 14 2. MATERIAL ACCOUNTING POLICIES (continued) Variable lease payments that depend on an index or a rate are included in the initial measurement of the lease liability and are initially measured using the index or rate as at the commencement date. Amounts expected to be payable by the lessee under residual value guarantees are also included. The Company applies the practical expedient in IFRS 16.15, electing not to separate non-lease components from lease components. Instead, the Company accounts for each lease component together with its associated non-lease components as a single lease component, in accordance with IFRS 16. The lease liability is subsequently remeasured to reflect changes in the lease term (using a revised discount rate); the assessment of a purchase option (using a revised discount rate); the amounts expected to be payable under residual value guarantees (using an unchanged discount rate); or future lease payments resulting from a change in an index or a rate used to determine those payments (using an unchanged discount rate). The remeasurements are treated as adjustments to the right-of-use asset. Lease modifications may also prompt remeasurement of the lease liability unless they are to be treated as separate leases. n) Share capital The Company records the proceeds received net of direct issuance costs from the issuance of its common shares as equity. Proceeds received on the issuance of units, consisting of common shares and warrants are allocated between the common share and warrant component. The Company has adopted the residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the most easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component. o) Share-based payment transactions Employees receive remuneration in the form o --- f share-based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions). The cost of equity-settled transactions is recognized, together with a corresponding increase in share-based payment reserves in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in statement of loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in share-based payments expense. No expense is recognized for awards that do not ultimately vest, except for equity-settled transactions, for which vesting is conditional upon a market or non-vesting condition. These are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 15 2. MATERIAL ACCOUNTING POLICIES (continued) When the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction or is otherwise beneficial to the employee as measured at the date of modification. When an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. The Company determined that the fair value of the services received could be reliably measured based on the contractual equity compensation arrangement and accordingly measured the share- based payment based on the fair value of the services received. p) Income (loss) per share The Company presents basic and diluted net income or loss per share data for its common shares, calculated by dividing the net income or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted net income or loss per share does not adjust the net income or loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive. q) Foreign currency Transactions and balances in currencies other than the Canadian dollar, the currency of the primary economic environment in which the Company and its subsidiaries operate (“the functional currency”), are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and --- losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at exchange prevailing on the statement of financial position date are recognized in the statement of comprehensive loss. 3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of these consolidated financial statements requires management to make judgments and estimates and form assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected. Information about significant judgments and estimates in applying accounting policies that have the most significant effect of amounts recognized in the consolidated financial statements is as follows: Accounting estimates a) Allowance for doubtful accounts Management applies judgement in evaluating its accounts receivable for doubtful accounts based on the length of time an account has been outstanding and history of collection. In measuring doubtful accounts, management uses an estimate reflecting its expected recoverable amount. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 16 3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (continued) b) Share-based compensation Management uses the Black-Scholes option pricing model to determine the fair value of stock options and standalone share purchase warrants issued. This model requires assumptions of the expected future price volatility of the Company’s common shares, expected life of options and warrants, future risk-free interest rates, and the dividend yield of the Company’s common shares. c) Inventory allowance In the valuation of inventory, management considers the net realizable value of its inventory which includes an estimate of expected future sales prices. When the sales amount expected to be realized exceed the carrying value of inventory based on cost, a provision is recorded to write- down the value of inventory to its net realizable value. d) Useful lives of property and equipment The Company estimates the useful lives of property and equipment based on the period over which the assets are expected to be available for use. The estimated useful lives are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of relevant assets. In addition, the estimation of the useful lives is based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in estimated useful lives would increase the recorded expenses and decrease the non-current assets. e) Lease and right-of-use asset discount rate The Company estimat --- es a discount rate pertaining to lease and right of use asset. The lease liability is initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease if that can be readily determined. If that rate cannot be readily determined, the lessee shall use their incremental borrowing rate. The discount rate is reviewed annually and present value of lease payments adjusted accordingly. Accounting judgements f) Revenue recognition Revenue is recognized when performance obligations are identifiable and recorded when goods or services are delivered to customers. Transaction prices are derived from specific selling prices either at the time of delivery or when the contract is signed with the customer for future delivery of products or services. The Company determines revenue to be recognized at a point in time when the physical asset or service is immediately transferred or consumed by the end customer. Revenue is considered to be transferred over a period of time when a series of activities are performed over a longer period of time to deliver a service or good to the customer. The Company applies the revenue recognition criteria set out below to each separately identifiable component of the sales transaction. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 17 3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (continued) Contract Research Services Once a contract is sufficiently advanced and the outcome of the contract can be measured reliably, contract revenue, costs and profits are recognized over the period of the contract by reference to the stage of completion of each contract. Revenue is recognized over time when one of the following criteria is met: I. the customer simultaneously receives the benefits provided by the Company’s performance as the Company performs; II. the Company’s performance does not create an asset with an alternative use to the Company; III. the Company has an enforceable right to payment for performance completed to date. The stage of completion of a contract is determined based upon the proportion of work performed and timeline to complete each phase. Prior to this recognition, stage receipts from customer are recorded in the statement of financial position as deferred revenue which is contract liability. If contract costs are expected to exceed contract revenue, the expected loss is recognized immediately in the statement of operations. Contract revenue includes an assessment of the amounts agreed in the contract, plus or less any variations in contract work and claims to the extent that they are approved and can be measured reliably. Once revenue has started to be recognized on an individual contract, the Company reports the position for each contract as either an asset or a liability. In instances where amounts recognized in revenue are in excess of amounts invoiced a contract asset is recognized. Similarly, a contract liability is recognized where billings to date exceed revenue recognized. The carrying amount of contract asset and revenue recognized from contract research services reflect management’s best estimate about each contract’s outcome and stage of completion but is subject to estimation uncertainty. g) Going concern As disclosed in Note 1, these consolidated financial statements have been prepared under the assumptions applicable --- to a going concern. If the going concern assumption were not appropriate for these consolidated financial statements then adjustments would be necessary to the carrying value of assets and liabilities, the reported expenses and the consolidated statement of financial position classifications used and such adjustments could be material. The Company reviews the going concern assessment at the end of each reporting period. h) Valuation of deferred tax assets and liabilities Deferred tax assets and liabilities require management judgment in order to determine the amounts to be recognized. This includes assessing the timing of the reversal of temporary differences to which deferred income tax rates are applied. Deferred tax assets are estimated with consideration given to the timing, sources and amounts of future taxable income. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 18 3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (continued) i) Renewal period for leases The Company defines the lease term as the non-cancellable duration of the lease, including any periods covered by options to extend if it is reasonably certain they will be exercised, or options to terminate if it is reasonably certain they will not be exercised. Several of the Company's lease agreements include such extension and termination options. The Company uses judgment to assess whether it is reasonably certain to exercise these options, taking into account all relevant factors that may create economic incentives for renewal or termination. After the lease commencement date, the Company reassesses the lease term if significant events or changes in circumstances arise that are within its control and may impact its decision to exercise the renewal or termination options. j) Accrual of grant income The Company accrues grant income as grants recoverable when management believes there is reasonable assurance the Company will comply with the relevant conditions and the grant will be received. Management applies significant judgment in determining whether costs incurred qualify as eligible expenditures for reimbursement, ensuring that grant income is recognized in the period that matches the related costs. 4. ACCOUNTING PRONOUNCEMENTS a) New and amended IFRS standards that are effective for the current year In the current year, the Company has applied the below amendment to IFRS Standards and Interpretations issued by the IASB that was effective for annual periods that begin on or after January 1, 2026. Its adoption has not had any material impact on the on the amounts reported in these financial statements, only on disclosure headings. Amendments to IFRS 7 and 9 - Classification & Measurement of Financial Instruments The amendments change the requirements in IFRS 7 and IFRS 9 seek to clarify the date of recognition and derecognition of some financial assets and liabilities with a new exception for some financial liabilities settled through an electronic cash transfer system and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion. Further, the amendments will add new disclosures for certain instruments with contractual terms that can change cash flows such as instruments with features linked to the achievement of environment, social and governance (ESG) targets and update the disclosures for eq --- uity instruments designated at fair value through other comprehensive income (FVOCI). The amendment was applied effective January 1, 2026, and did not have a material impact on the Company's Financial Statements. b) New accounting pronouncements issued but not yet effective Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates for mandatory adoption. Management is assessing the impact of new accounting pronouncements and will complete its assessment prior to effective dates. Introduction of IFRS 18 - Presentation and Disclosure in Financial Statements IFRS 18 is the new standard on financial statement presentation and disclosure with a focus on updates to the statement of profit or loss. IFRS 18 will replace IAS 1, Presentation of Financial TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 19 4. ACCOUNTING PRONOUNCEMENTS (continued) Statements, and retains many of the existing principles in IAS 1. IFRS 18 will define the structure for the statement of profit or loss. The new standard will require disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial statements (that is, management-defined performance measures); and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. IFRS 18 will be effective for years beginning on or after January 1, 2027. Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant effect on the Company’s consolidated financial statements. The Company did not adopt any new accounting pronouncements during the period ended February 28, 2026, which had a significant impact on the consolidated financial statements. 5. INVENTORY Inventory is stated at the lower of cost and net realizable value, with cost being determined using the first in fist out method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. The Company maintains three categories of inventory: parts, work in process, and finished goods. The Company’s inventory consists of: February 28, 2026 August 31, 2025 Parts $ 358,924 $ 349,838 Work in process - 219,580 Finished goods - 28,097 Total inventory $ 358,924 $ 597,515 The amount of inventory recognized as expense during the period ended February 28, 2026, was $1,257,580 (February 28, 2025 - $241,549). 6. TECHNOLOGY ASSIGNMENT AGREEMENT On November 29, 2021, the Company entered into an agreement with the University of British Columbia ("UBC") in which UBC has agreed to assign all interest in and to a provisional patent application related to the development of scalable synthetic psilocybin and other tryptamine compounds. The Company was also granted the option by UBC to acquire additional technological developments related to the patent application in the future. In consideration for the assignment of the interest, and the grant of the option, on January 10, 2022, the Company issued 1,000,000 common shares with a fair value of $850,000 to UBC which was included in expenses as patent costs. The Company continues to hold the provisional pat --- ent as at the period ended February 28, 2026. 7. EQUIPMENT During the period ended February 28, 2026, the Company purchased $942,351 of furniture and lab equipment (August 31, 2025 - $924,719). The equipment is being depreciated using the straight-line method over a five useful life of the equipment. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 20 7. EQUIPMENT (continued) Office and Lab Equipment Cost Balance, August 31, 2024 $ 1,878,663 Additions 924,719 Balance, August 31, 2025 2,803,382 Additions 942,351 Dispositions (659,304) Balance, February 28, 2026 $ 3,086,429 Accumulated amortization Balance, August 31, 2024 $ 950,913 Additions 468,679 Balance, August 31, 2025 1,419,592 Additions 341,014 Dispositions (26,067) Balance, February 28, 2026 $ 1,734,539 Net book value Balance, August 31, 2025 $ 1,383,790 Balance, February 28, 2026 $ 1,351,890 8. SHARE CAPITAL Authorized The Company is authorized to issue an unlimited number of common shares without par value. Share issuance and subscriptions On September 12, 2025, the Company closed a first tranche private placement and issued a total of 20,813,184 common shares at a price of $0.25 per common share for total proceeds, less share issuance costs, of $5,099,684. The Company paid finders’ fees of $103,613 related to the private placement, which was recorded as share issuance costs upon closing. On October 10, 2025, the Company closed a second tranche private placement and issued a total of 5,186,816 common shares at a price of $0.25 per common share for total proceeds, less share issuance costs, of $1,293,204. The Company paid finders’ fees of $3,500 related to the private placement, which was recorded as share issuance costs upon closing. On October 15, 2025, the Chief Executive Officer of the Company agreed to settle outstanding indebtedness owing to him in the amount of $100,000 (Note 18) through the issuance of 303,030 common shares at a deemed price of $0.33 per common share. The Company has also approved the issuance of common shares in settlement of a portion of director fees owed to its independent directors. A total of 67,045 common shares were issued at a deemed price of $0.33 per common share, in satisfaction of $22,125 in accrued fees owing to the independent directors of the Company. On October 22, 2025, the Company agreed to settle certain outstanding indebtedness through the issuance of 689,654 common shares of the Company. Pursuant to the debt settlement, the Company, the Chief Technology Officer, and a director of the Company agreed to settle an aggregate of $100,000 in outstanding indebtedness incurred for services previously provided to the Company. The indebtedness was satisfied through the issuance of 344,827 shares of the Company at a deemed price of $0.29 per common share. The Company also agreed to settle $100,000 of a loan (Note 18), through the issuance of 344,827 shares at a deemed price of $0.29 per common share. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 21 8. SHARE CAPITAL (continued) The Company received $1,822,047 of share subscriptions for a non brokered private placement that was not closed as at the year ended August 31, 2025. Subsequent to the year ended August 31, 2025, the private placement closed and the amount received was recogni --- zed as shares issued. On December 31, 2025, the Chief Executive Officer of the Company has agreed to settle outstanding indebtedness owing to him in the amount of $12,000 (Note 18) through the issuance of 48,000 common shares at a deemed price of $0.25 per common share. During the year ended August 31, 2025, the Company issued 32,000 common shares related to the exercise of options. 9. OPTIONS, WARRANTS, AND RESTRICTED SHARE UNITS Options The Company has a stock option plan in place under which it is authorized to grant options to officers, directors, employees, consultants, and management company employees enabling them to acquire up to 16,161,060 common shares of the Company. Under the plan, the exercise price of each option shall not be less than the price permitted by the CSE stock exchange. The options can be granted for a maximum term of 10 years. a. On November 1, 2023, the Company issued 357,550 stock options to employees with an exercise price of $0.20 for a period of five years. The options vested immediately. b. On February 15, 2024, the Company issued 400,000 stock options to employee and director of the Company with an exercise price of $0.36 for a period of five years. The options vest over a term of five years. c. On October 24, 2024, the Company issued 807,000 stock options to employees with an exercise price of $0.43 for a period of five years. The options vest over a term of three years and commence vesting on March 1, 2025. d. On June 23, 2025, the Company issued 85,761 stock options to employees with an exercise price of $0.36 for a period of five years. The options vest over a term of three years. e. On September 2, 2025, the Company issued 518,140 stock options to employees with an exercise price of $0.43 for a period of five years. The options vest over a term of three years. f. On October 15, 2025, the Company issued 1,544,000 stock options to employees with an exercise price of $0.40 for a period of five years. The options vest over a term of three years. g. On December 31, 2025, the Company issued 250,000 stock options to a consultant with an exercise price of $0.33 for a period of five years. The options vest over a term of three years. The value of stock options granted is determined using the Black-Scholes model and is accounted for as share-based payments reflected in expenses and equity reserves. The following assumptions were used for the Black-Scholes valuation of stock options granted: TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 22 9. OPTIONS, WARRANTS, AND RESTRICTED SHARE UNITS (continued) *As the Company does not have publicly traded information for 5 years, volatility was estimated using publicly traded comparable companies. Stock option transactions are summarized as follows: Number of Options Weighted Average Exercise Price Balance at August 31, 2024 4,683,050 $ 0.43 Options exercised (32,000) $ 0.14 Options granted 892,761 $ 0.42 Balance at August 31, 2025 5,543,811 $ 0.38 Options cancelled (200,000) $ 0.50 Options granted 2,312,140 $ 0.39 Balance at February 28, 2026 7,655,951 $ 0.42 The following table summarizes stock options outstanding and exercisable at February 28, 2026: Options Outstanding Options Exercisable Exercise Price per share $ Number of Shares Expiry Date Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price $ Number Exercisable Weighted Ave --- rage Exercise Price $ 0.50 1,400,000 October 28, 2026 0.66 0.50 1,400,000 0.50 0.90 575,000 November 23, 2026 0.73 0.90 575,000 0.90 0.55 100,000 March 14, 2027 1.04 0.55 100,000 0.55 0.35 500,000 July 19, 2027 1.39 0.35 500,000 0.35 0.14 318,500 May 5, 2028 2.18 0.14 318,500 0.14 0.27 800,000 August 2, 2028 2.43 0.27 800,000 0.27 0.20 357,550 November 1, 2028 2.67 0.20 357,550 0.20 0.36 400,000 February 15, 2029 2.96 0.36 273,549 0.36 0.43 807,000 October 24, 2029 3.67 0.43 418,500 0.43 0.36 85,761 June 23, 2030 4.32 0.36 21,440 0.36 0.43 518,140 September 2, 2030 4.51 0.43 129,535 0.43 0.40 1,544,000 October 15, 2030 4.63 0.40 386,000 0.40 0.33 250,000 December 29, 2030 4.84 0.33 - 0.33 7,655,951 2.74 0.42 5,280,074 0.43 Nov. 1, 2023 Feb. 15, 2024 Oct. 24, 2024 Jun. 23, 2025 Sep. 2, 2025 Oct. 15, 2025 Dec. 31, 2025 Volatility* 134% 142% 121% 118% 123% 121% 118% Risk-free interest rate 3.60% 3.40% 3.02% 2.89% 2.96% 2.70% 2.95% Dividend yield 0% 0% 0% 0% 0% 0% 0% Expected life 5 years 5 years 5 years 5 years 5 years 5 years 5 years Expected forfeiture rate 0% 0% 0% 0% 0% 0% 0% Weighted average grant date value $0.20 $0.36 $0.43 $0.36 $0.43 $0.40 $0.33 TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 23 9. OPTIONS, WARRANTS, AND RESTRICTED SHARE UNITS (continued) Warrants A summary of issued and outstanding warrants is as follows: Number of Warrants Weighted Average Exercise Price Outstanding August 31, 2024 2,439,749 $ 0.75 Expired November 10, 2024 (2,439,749) $ - Outstanding August 31, 2025 - $ - Outstanding February 28, 2026 - $ - Restricted Share Units The Company has a stock option plan in place under which it is authorized to grant restricted share units to officers, directors, employees, consultants, and management company employees enabling them to acquire common shares of the Company. Under the plan, the exercise price of each restricted share unit shall not be less than the price permitted by the CSE stock exchange. The restricted share units can be granted for a maximum term of 10 years. a. On December 31, 2025, the Company granted 192,000 restricted share units to three directors pursuant to director fee compensation arrangements for 2024 and 2025 for a total value of $48,000. One-quarter of the restricted share units vest after four months and a day and then annually in equal parts over the subsequent three years. The balance of restricted stock units outstanding as of Feb 28, 2026, and the changes in the years ended are as follows: 10. RELATED PARTY TRANSACTIONS AND BALANCES Key management personnel include the Company’s Board of Directors and Officers of the Company. The Company’s related parties include key management personnel, and companies related by way of directors or shareholders in common. (a) Key management personnel compensation is comprised of the following: The remuneration of directors and other members of key management personnel during the period ended February, 2026 and 2025 were as follows: Number of RSUs Weighted average fair value $ Balance, Aug 31, 2025 - N/A Granted 192,000 0.25 Balance, Feb 28, 2026 192,000 0.25 TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 24 10. RELATED PARTY TRANSACTIONS AND BALANCES (continued) 2026 2025 Consulting and management fees $ 925,244 $ 409,296 Share-based pa --- yments 527,936 65,900 $ 1,453,180 $ 475,196 (b) Amounts due to/from related parties: In the normal course of operations, the Company transacts with companies related to the Company’s directors and officers. All amounts payable and receivable are non-interest bearing, unsecured and due on demand. The following table summarizes the amounts due to related parties at February 28, 2026 and 2025: 2026 2025 Dr. Jason Hein $ - $ 287,795 Dr. Jeffrey Sherman - 9,797 Henry Dubina 4,645 134,675 $ 4,645 $ 399,854 (c) Other related party transactions The Company recognizes Standard Lithium Ltd. (“STL”) as a related party due to common directors. Dr. Andy Robinson serves as director of STL and Telescope Innovations Corp. As at February 28, 2026, there are no payables to STL from the Company and $1,121 included in accounts receivable from STL to the Company (February 28, 2025 - $nil). (d) Related party loans The Company received a loan from shareholders (see Note 18) who are also directors and officers of Telescope Innovations Corp. 11. RIGHT OF USE ASSET AND LEASE LIABILITIES In April 2023, the Company entered into a 120-month office lease agreement that commenced on October 1, 2023. In analysing the identified agreement, the Company applied the lease accounting model pursuant to IFRS 16 and considered all the facts and circumstances surrounding the inception of the agreement. The lease term matures on September 30, 2033. For the period ended February 28, 2026, depreciation of the right of use asset was $130,638 (February 28, 2025 - $129,569). The right of use asset is depreciated on a straight-line basis over 120 months. Right of use asset, August 31, 2024 2,357,460 Lease adjustment (52,601) Depreciation of right of use asset (253,746) Right of use asset, August 31, 2025 $ 2,051,113 Lease adjustment 60,866 Depreciation of right of use asset (130,638) Right of use asset, February 28, 2026 $ 1,981,341 TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 25 11. RIGHT OF USE ASSET AND LEASE LIABILITIES (continued) For the period ended February 28, 2026, finance charges on the lease liability was $137,821 (February 28, 2025 – $124,832) Lease liabilities, August 31, 2024 2,029,127 Lease adjustment (31,327) Accretion 253,371 Lease liabilities, August 31, 2025 $ 2,251,171 Lease payments (133,640) Accretion 137,821 Lease liabilities, February 28, 2026 $ 2,255,352 Current lease liabilities 173,663 Long-term lease liabilities 2,081,689 Total lease liabilities, February 28, 2026 $ 2,255,352 As of February 28, 2026, the Company has no prepaid rent on hand with the landlord (February 28, 2025 - $nil). 12. SEGMENTED INFORMATION AND CONCENTRATION An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses, and for which discrete financial information is available. The Company has one operating segment that generates revenues from three revenue streams, contract research services, grant income, and sale of automation products. Revenue from the three sources for the period ended February 28, 2026 and 2025 are as follows: 2026 2025 Contract research service revenue from customer contracts $ 1,226,767 $ 824,627 Automation product sales from customer contracts 2,975,074 1,043,656 Grant income 139,631 340,035 Total $ 4,341,472 $ 2,208,318 The Company’s revenue is generated in four geographical lo --- cations: 2026 2025 Contract research service revenue from customer contracts Canada $ 16,000 $ - United States 1,093,085 824,627 Europe - - Asia - - Total $ 1,109,085 $ 824,627 2026 2025 Automation product sales from customer contracts Canada $ - $ 356,702 United States 1,691,558 686,954 Europe - - Asia 1,401,198 - Total $ 3,092,756 $ 1,043,656 TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 26 12. SEGMENTED INFORMATION AND CONCENTRATION (continued) 2026 2025 Grant income Canada $ 139,631 $ 340,035 United States - - Europe - - Asia - - Total $ 139,631 $ 340,035 13. GRANT INCOME Grant income generated from the following sources for the period ended February 28, 2026 and 2025 are as follows: 2026 2025 Centre for Excellence in Mining Innovations $ 139,631 $ 340,035 Total $ 139,631 $ 340,035 14. CONTRACT ASSETS AND GRANTS RECOVERABLE The Company may receive payments from customers based on the stage of completion of a contract. Contract assets relate to the Company’s conditional right to consideration for the completed performance under the contract. Accounts receivables are recognized when the right to consideration becomes unconditional. Contract liabilities relate to stage payments that are received in advance of performance under the contract and are presented as deferred revenue. The Company recognized contract assets as at February 28, 2026 of $295,317 (August 31, 2025 - $nil). The Company records grant income in accordance with its accounting policy (Note 2(g)) and has recorded grants receivable as at February 28, 2026 of $nil (August 31, 2025 - $213,500). 15. MANAGEMENT OF CAPITAL The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to develop its operations and scalable manufacturing processes and tools for the pharmaceutical and chemical industry. The Company does not have any externally imposed capital requirements to which it is subject to. The Company considers the aggregate of all components of equity as capital. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares or dispose of assets or adjust the amount of cash. 16. FINANCIAL INSTRUMENTS AND FINANCIAL RISK The Company’s financial instruments include cash, accounts receivable, accounts payable, and due to related parties. The carrying amounts of these financial instruments are a reasonable estimate of their fair values because of their current nature. The following table summarizes information regarding the carrying values of the Company’s financial instruments: February 28, 2026 August 31, 2025 FVTPL (i) $ 2,746,118 $ 2,701,390 Financial assets at amortized cost (ii) 554,004 410,959 Financial liabilities at amortized cost (iii) (2,909,004) (5,142,268) TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 27 16. FINANCIAL INSTRUMENTS AND FINANCIAL RISK (continued) (i) Cash and cash equivalents (ii) Accounts receivable and contract assets (iii) Accounts payable, due to related parties, loan payable and lease liabilities Financial Instruments and Fair Value Measurements IFRS 7, Financial Instruments: --- Disclosures, establishes 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 - quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - 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 - inputs for the asset or liability that are not based on observable market data (unobservable inputs). The following table sets forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as at February 28, 2026: February 28, 2026 August 31, 2025 February 28, 2026: Level 1 Cash $ 2,746,118 $ 2,701,390 Level 2 – – Level 3 – – Total financial assets $ 2,746,118 $ 2,701,390 At February 28, 2026, cash of $2,746,118 (August 31, 2025 - $2,701,390) was classified as level 1. There were no transfers into or out of level 2 or level 3 during the period. There are no financial liabilities measured at fair value on a recurring basis. Fair Value The fair values of the Company’s financial instruments approximate their carrying values as at February 28, 2026 and 2025 because of the demand nature or short‐term maturity of these instruments. The Company’s financial instruments include cash, accounts receivable, accounts payable, and amounts due to related parties. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Financial Risk (i) Credit risk Credit risk arises from non-performance by counterparties of contractual financial obligations. The Company’s maximum credit risk is primarily attributable to its cash and accounts receivable. The Company limits its exposure to credit loss for cash by placing such instruments with large Canadian financial institutions. The Company has not recorded an allowance for doubtful accounts against its trade receivables as all balances owed are settled in full when due (usually 90 days or less). TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 28 16. FINANCIAL INSTRUMENTS AND FINANCIAL RISK (continued) (ii) Liquidity risk The Company's approach to managing liquidity risk is to ensure that it will have sufficient financial resources to meet liabilities when due. As at February 28, 2026, the Company had a working capital surplus of $3,507,844 (August 31, 2025 - $686,506 surplus). All the Company's accounts payable and amounts due to related parties have contractual maturities of less than 30 days and are subject to normal trade terms. Contractual undiscounted cash flow requirements for financial liabilities as at February 28, 2026 are as follows: <1 Year 2-5 Years >5 Years Total Accounts payable and accrued liabilities $ 649,007 $ - $ - $ 649,007 Amounts due to related parties 4,645 - - 4,645 Amounts due to shareholders 502,666 - - 502,666 Lease liabilities 433,248 1,791,504 1,421,920 3,646,672 $ 1,589,566 $ 1,791,504 $ 1,421,920 $ 4,802,990 (iii) Interest rate risk In management’s opinion, the Company’s interest rate risk is minimal as the Company does not have any indebtedness t --- hat bears interest at fixed or variable rates. (iv) Foreign currency risk The Company’s functional currency is the Canadian dollar. The Company’s head office and operating expenses are mainly denominated in Canadian dollars although some of the Company’s revenue is denominated in US dollars. If the US dollar depreciates compared to the Canadian dollar revenue would decrease in Canadian dollars. As at February 28, 2026, $68,831 (August 31, 2025 - $712,861) of the Company’s liabilities and $2,917,629 (August 31, 2025 - $1,608,272) of its current assets are denominated in US dollars, Swiss Francs, and Euros. A 10% change in the exchange rate would result in a $298,646 net impact on the Company’s foreign exchange gain or loss. As at February 28, 2026, the Company is moderately exposed to foreign exchange fluctuations. 17. COMMITMENTS In April 2023, the Company entered into a lease agreement for its laboratory and corporate offices which commenced on October 1, 2023.. February 28, 2026 Not later than one year $ 433,247 Later than one year and not later than five years 1,791,504 Later than five years 1,421,921 $ 3,646,672 18. LOAN PAYABLE TO SHAREHOLDERS On May 30, 2025, the Company received a loan from shareholders (see Note 10(d)) which bears interest at 6.95% and is secured by a General Security Agreement covering all assets of the Company. The balance as at February 28, 2026 is comprised of $500,000 principal and $2,666 accrued interest to the total of $502,666. The loan matures June 1, 2026. At any time prior to the maturity date, the Company may prepay the loan amount in its entirety without penalty. TELESCOPE INNOVATIONS CORP. Notes to Consolidated Financial Statements (Expressed in Canadian Dollars) For the Six Months Ended February 28, 2026 and 2025 29 18. LOAN PAYABLE TO SHAREHOLDERS (continued) Loan payable to shareholders consists of: February 28, 2026 August 31, 2025 Principal $ 500,000 $ 1,200,000 Interest accrued 2,666 10,511 Total balance $ 502,666 $ 1,210,511