SEDAR Interim Financial Statements

PUDO INC. CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTH PERIODS ENDED NOVEMBER 30, 2025 AND 2024 (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED) NOTICE TO READER The accompanying unaudited condensed interim consolidated financial statements of PUDO Inc. have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors. P a g e | 1 See accompanying notes to the unaudited condensed interim consolidated financial statements PUDO Inc. Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited) As at Notes November 30, 2025 February 28, 2025 Assets Current assets Cash $ 235,645 $ 649,997 Restricted short-term investment 26,894 26,302 Trade and other receivables 3, 5 1,085,453 633,737 Prepaid expenses and deposits 158,632 94,420 Total current assets 1,506,624 1,404,456 Non-current assets Equipment 6 8,016 455 Intangible assets 7 56,879 52,755 Total assets $ 1,571,519 $ 1,457,666 Liabilities Current liabilities Trade and other payables 8, 12 $ 848,626 $ 1,185,924 Total current liabilities 848,626 1,185,924 Total liabilities 848,626 1,185,924 Shareholders' equity Share capital 9 9,987,210 9,177,037 Shares to be issued 10 - 291,811 Stock option reserve 10 1,230,609 1,081,410 Accumulated other comprehensive loss (14,820) (25,059) Deficit (10,480,106) (10,253,457) Shareholders' equity 722,893 271,742 Total liabilities and shareholders' equity $ 1,571,519 $ 1,457,666 Nature of operations and going concern (note 1) Commitments and contingencies (note 13) Approved by the Board of Directors: “Thomas Bijou” Director “Richard Cooper” Director P a g e | 2 PUDO Inc. Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars) (Unaudited) Three Months Ended November 30, Nine Months Ended November 30, Notes 2025 2024 2025 2024 Revenue 3 $ 1,400,178 $ 948,554 $ 4,230,076 $ 2,685,627 Cost of sales 11, 12 (951,237) (612,680) (2,844,440) (1,826,786) Gross profit 448,941 335,874 1,385,636 858,841 Administrative expenses 11 (528,072) (301,060) (1,463,086) (993,629) Share-based compensation 12 (48,913) (43,126) (149,199) (133,073) Net loss (128,044) (8,312) (226,649) (267,861) Other comprehensive loss - translation of foreign subsidiary (11,556) 3,860 10,238 (11,525) Comprehensive loss for the period (139,600) (4,452) (216,411) (279,386) Loss per share - basic and diluted $ (0.00) $ (0.00) $ (0.01) $ (0.01) Weighted average number of shares outstanding - basic and diluted 33,272,286 27,271,007 33,272,286 27,271,007 See accompanying notes to the unaudited condensed interim consolidated financial statements P a g e | 3 PUDO Inc. Condensed Interim Consolidated Statements of Changes in Shareholders' (Deficit) Equity (Expressed in Canadian Dollars) (Unaudited) # of Common Shares Share Capital Shares to be Issued Stock Option Reserve Accumulated Other Comprehensive Income (Loss) Deficit Total Balance, February 29, 2024 27,271,007 $9,177,037 $ - $ 895,348 $ (1,789) $ (10,170,648) $(100,052) Share-based compensation - - - 133,073 - - 133,073 Comprehensive loss for the nine month period ended November 30, 2024 - - - - (11,525) (267,861) (279,386) Balance, November 30, 2024 27,271,007 $9,177,037 $ - $ 1,028,421 $ (13,314) $ (10,438,509) $(246,365) Share-based compensation - - - 52,989 - - 52,989 Shares to be issued - - 291,811 - - - 291,811 C --- omprehensive loss for the three month period ended February 28, 2025 - - - - (11,745) 185,052 173,307 Balance, February 28, 2025 27,271,007 $9,177,037 $ 291,811 $1,081,410 $ (25,059) $ (10,253,457) $ 271,742 Share-based compensation - - - 149,199 - - 149,199 Issuance of common shares via private placement (Note 9 (i)) 2,913,147 393,275 (291,811) - - - 101,464 Issuance of common shares to settle payable to vendor (Note 9 (ii)) 3,088,132 416,898 - - - - 416,898 Comprehensive loss for the nine month period ended November 30, 2025 - - - - 10,239 (226,649) (216,410) Balance, November 30, 2025 33,272,286 $9,987,210 $ - $1,230,609 $ (14,820) $ (10,480,106) $ 722,893 See accompanying notes to the unaudited condensed interim consolidated financial statements P a g e | 4 See accompanying notes to the unaudited condensed interim consolidated financial statements PUDO Inc. Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian Dollars) (Unaudited) Notes Nine Months Ended November 30, 2025 Nine Months Ended November 30, 2024 Cash flows received (used) from operating activities Net loss for the period $ (226,649) $ (267,861) Adjustments for: Amortization 6, 7 15,777 22,818 Share-based compensation 12 149,199 133,072 Allowance for doubtful accounts 5 (24,414) (17,992) Net change in working capital: Restricted short-term investment (592) (452) Trade and other receivables (427,302) (124,026) Prepaid expenses and deposits (64,212) 14,700 Trade and other payables 79,600 229,481 Cash flows used from operating activities (498,593) (10,260) Cash flows used in investing activities Purchase of equipment 6 (8,912) - Purchase of intangible assets 7 (18,550) (23,400) Cash flows used in investing activities (27,462) (23,400) Cash flows received from financing activities Proceeds from issuance of common shares 101,464 - Cash flows received from financing activities 101,464 - Change in cash during the period (424,591) (33,660) Cash, beginning of period 649,997 155,725 Effect of translation of foreign currency 10,239 (11,524) Cash, end of period $ 235,645 $ 110,541 PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 5 1. Nature of operations and going concern The principal activity of PUDO Inc. (the “Company”) is using technology to improve the connection between e- commerce and consumers. The Company deploys its’ technology to provide consumers with convenient locations to pick-up or drop-off e-commerce parcels. Through collaboration with online retailers, third party logistics companies (“3PL”), Software as a Service (“SaaS”) and courier companies, consumers can take secure delivery of their parcels or drop-off returns where it’s convenient, when it’s convenient for them. Existing businesses, such as convenience stores or gas stations, provide services as a PUDOpoint™ (“PUDOpoint”). PUDOpoints are typically open extended hours, seven days a week to make it convenient for busy consumers to quickly and efficiently collect what they’ve ordered online or drop off what they need to return. The Company deploys its technology to provide consumers with convenient PUDOpoints (the “Network”) to pick-up and drop-off (“PUDO”) e-commerce parcels. The Company’s services provide courier companies and retailers with a presence in a broad variety of locations to better serve their customers. Not only convenient, these services can a --- lso save money. Couriers don’t have to attempt delivery a second or third time or make other arrangements with customers who aren’t home. Retailers can ship directly to PUDOpoints saving residential delivery costs and reducing the risk of theft or spoilage. PUDO also helps retailers reduce the cost and increase the convenience of their returns program. Consumers can drop off prelabeled parcels at any PUDOpoint for processing back to the retailer. The Company’s registered office is at 6600 Goreway Drive, Unit D, Mississauga, Ontario, L4V 1S6. The Company is listed on the Canadian Securities Exchange (“CSE”), trading under the symbol “PDO” and is currently a member of the CSE Composite Index. Going Concern These condensed interim consolidated financial statements have been prepared with the assumption that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. As at November 30, 2025, the Company had a working capital surplus of $657,998 (February 28, 2025 – $218,532), had not yet achieved profitable operations, had used cash from operating activities of $498,593 for the nine-month period ended November 30, 2025 (cash used from nine month period ended November 30, 2024 - $10,260), had a deficit of $10,480,106 as at November 30, 2025 (February 28, 2025 - $10,253,457) and had shareholders’ equity of $722,893 (February 28, 2025 – $271,742). Certain of these conditions reflect material uncertainties which cast significant doubt about the Company’s ability to continue as a going concern. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future. While the Company has been successful in raising the necessary funding to continue operations in the past, there is no assurance that it will be able to do so in the future. These condensed interim consolidated financial statements do not include the adjustments that would be necessary should the Company be unable to continue as a going concern. Such adjustments could be material. 2. Basis of preparation (a) Statement of compliance The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”). These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by the IASB. The same accounting policies and methods of computation are followed in these unaudited condensed interim consolidated financial statements as compared with the most recent annual consolidated financial statements as at and for the year ended February 28, 2025. Any subsequent changes to IFRS that are given effect in the Company’s PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 6 2. Basis of preparation (continued) annual consolidated financial statements for the year ending February 28, 2026, could result in restatement of these unaudited condensed interim consolidated financial statements. The condensed interim consolidated financial statements of the Company for the three and n --- ine month periods ended November 30, 2025 were approved and authorized for issue by the Board of Directors on January 22, 2026. (b) Basis of presentation The condensed interim consolidated financial statements have been prepared on a historical cost basis. In addition, these condensed interim consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information. (c) Basis of consolidation The condensed interim consolidated financial statements comprise the financial statements of the Company and its wholly-owned subsidiaries PUDOpoint Inc., Grandview Gold (USA) Inc., and Recuperacion Realzada, S.A.C. Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect those returns through the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date control is transferred to the Company and are de-consolidated from the date control ceases. The financial statements include all the assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiaries after eliminating inter-entity balances and transactions. 3. Financial risk management (a) Fair values The carrying amounts of, cash, restricted short-term investment, trade and other receivables, trade and other payables approximate their fair values, given their short-term nature. (b) Financial risk factors The Company’s activities expose it to a variety of financial risks, including credit risk, liquidity risk, market risk, and capital risk management. This note discloses information about the Company’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk and their management of capital. The Board of Directors has the overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. (i) Credit risk Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet commitments it has entered into with the Company. The financial assets that potentially expose the Company to credit risk consist principally of cash or other receivables. The extent of the Company's exposure to credit risk approximate their carrying values are recorded in the Company's consolidated statement of financial position. A significant portion of the Company’s revenues are from one customer. This customer is comprised of three different businesses operated independently under common control. PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 7 3. Financial risk management (continued) Three Months Ended Nine Months Ended November 30, November 30, 2025 2024 2025 2024 Revenue from customer #1 $ 415,557 $ 315,218 $ 1,238,347 $ 987,426 % of total revenue 30% 33% 29% 37% Revenue from customer #2 $ 334,416 $191,433 $896,992 $528,123 % of total revenue 24% 20% 21% 20% Revenue from customer #3 $ 208,030 $115,088 $821,234 $373,619 % of total revenue 15% 12% 19% 14% As at N --- ovember 30, 2025 As at February 28, 2025 Accounts Receivable from customer #1 $ 415,557 $ 146,129 % of total accounts receivable 38% 25% Accounts Receivable from customer #2 $ 235,073 $ 80,252 % of total accounts receivable 22% 14% Accounts Receivable from customer #3 $ 122,085 $ 79,106 % of total accounts receivable 11% 13% The maximum exposure to credit risk at the reporting date was: November 30, 2025 February 28, 2025 Cash $ 235,645 $ 649,997 Restricted short-term investment 26,894 26,302 Trade and other receivables 1,085,453 633,737 $ 1,347,992 $ 1,310,036 (ii) 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’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to finance its operations and to mitigate the effects of fluctuations in cash flows. See going concern discussion in note 1. The following are the contractual maturities of financial liabilities: November 30, 2025 1 Year or Less Greater than 1 year Total Trade and other payables $ 848,626 $ - $ 848,626 February 28, 2025 1 Year or Less Greater than 1 year Total Trade and other payables $ 1,185,924 $ - $ 1,185,924 In order to meet such cash commitments, the Company will be required to generate sufficient cash inflows from operating and financing activities. PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 8 3. Financial risk management (continued) (iii) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. All of the Company's equipment and intangible assets are located in Canada. Revenue by geographic region for the three and nine month periods is as follows: Three Months Ended Nine Months Ended November 30, November 30, 2025 2024 2025 2024 Canada $ 1,368,227 $ 914,304 $ 4,134,443 $ 2,566,291 United States of America 31,951 34,250 95,633 119,336 $ 1,400,178 $ 948,554 $ 4,230,076 $ 2,685,627 Revenue by service for the three and nine month periods is as follows: Three Months Ended Nine Months Ended November 30, November 30, 2025 2024 2025 2024 Returns $ 887,826 $ 516,304 $ 2,699,493 $ 1,430,641 For Pick UP 312,866 161,774 762,909 410,630 Failed First Attempts 130,226 97,598 377,037 291,359 Third Party Logistics - 73,659 179,313 252,686 Direct to PUDO 44,512 55,768 136,878 172,062 Other 24,748 43,451 74,446 129,249 $ 1,400,178 $ 948,554 $ 4,230,076 $ 2,686,627 (iv) Currency risk Since the Company has a bank account denominated in US dollars, it is exposed to foreign currency risk due to fluctuations in the exchange rate. The Company purchases goods and services and generates revenues in Canadian dollars and US dollars. Since the Company reports its results in Canadian dollars, the functional currency of the Company, it is exposed to changes in the value of the US dollar relative to that of the Canadian dollar. As at November 30, 2025 and February 28, 2025, the Company and its subsidiaries had cash, trade and other receivables and trade and other payables denominated in US dollars as follows: PUDO Inc. Notes to --- Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 9 3. Financial risk management (continued) As at November 30, 2025 USD CAD Equivalent Cash $ 10,821 $ 15,127 Trade and other receivables 60,591 84,700 Trade and other payables (65,328) (91,323) $ 6,084 $ 8,504 As at February 28, 2025 USD CAD Equivalent Cash $ 57,799 $ 83,450 Trade and other receivables 141,813 204,750 Trade and other payables (56,073) (80,958) $ 143,539 $ 207,242 (v) Interest rate risk The Company’s exposure to risks of changes in market interest rates relates primarily to its cash and short-term investment balances. The Company regularly analyzes its interest rate exposure, giving consideration to potential renewals of existing positions, alternative financial positions and the mix of fixed and variable interest rates. (vi) Capital risk management The Company reviews and manages its capital position from time to time to maintain a balance between its liability and equity levels. The Company uses the capital contributed by investors to finance its working capital requirements. The Board of Directors does not establish quantitative return on capital criteria for management but rather relies on the expertise of the Company’s management to sustain future developments of the business. The Company defines capital as shareholder’s equity, loans and borrowings. As at November 30, 2025, the Company had shareholders’ equity of $722,893 (February 28, 2025 – $271,742). The Company's capital management objectives, policies and processes have remained materially unchanged during the nine-month period ended November 30, 2025, and the year ended February 28, 2025. (vii) Sensitivity analysis Based on management’s knowledge and experience in the financial markets, the Company believes the following movements are reasonably possible over the year. Sensitivity to a plus or minus 10% change in the US–Canadian dollar foreign exchange rate, based on the current US dollar denominated balances as at November 30, 2025, would affect the net loss by approximately plus or minus $1,000 during a year. 4. Critical accounting estimates and judgments The Company makes estimates and judgments that affect the reported amounts of assets and liabilities within the next year. Estimates and judgments are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 10 4. Critical accounting estimates and judgments (continued) Intangible assets and equipment The useful life of intangible assets and equipment is determined by management at the time the software and equipment is acquired and brought into use and is regularly reviewed for appropriateness. For unique software products controlled by the Company, the estimated life is based on management’s historical experience with similar products as well as anticipation of future events which may impact their life such as changes in technology. In the determination of carrying values and impairment charges, management looks at the higher of recoverable amount or fair value less costs to sell (in the case of non-financial assets) and at objective evidence, for a si --- gnificant or prolonged decline of fair value on financial assets indicating impairment. These determinations and their individual assumptions require that management make a decision based on the best available information at each reporting period. The Company reviews property and equipment and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment of financial assets All financial assets except for those at FVTPL are reviewed for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or group of financial assets is impaired. Income, value added, withholding and other taxes The Company is subject to income, value added, withholding and other taxes. Judgment is required in determining the Company’s provisions for taxes, including the recognition and measurement of any potential deferred tax assets. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company’s income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made. Share-based compensation The Company measures the cost of equity-settled transactions with employees, consultants, officers and directors by reference to the fair value of the equity instruments at the date on which they are granted. Estimating fair value for share-based compensation transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. Assumptions are made and judgment is used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviours and corporate performance. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates. Functional and presentation currency In determining the functional currency of the parent and its subsidiaries, the Company considers the currency that mainly influences sales and the cost of providing goods and services in each jurisdiction in each the Company operates. The Company also considered secondary indicators including the currency in which funds from financing activities are denominated, the currency in which funds are retained and whether the activities of the subsidiaries are carried out as an extension of the Company or if they are carried out with a degree of autonomy. Going concern The assessment of the Company’s ability to continue as a going concern involves judgment regarding future funding available to increase revenues and working capital requirements. PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended --- November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 11 4. Critical accounting estimates and judgments (continued) Valuation of shares issued for non-cash considerations The Company makes estimates and judgments in determining the value of shares issued for non-cash consideration. Valuation of trade receivables The Company estimates the collectability and timing of collection of its receivables, classifying them as current assets or long-term assets, and applies provisions for collectability when necessary. 5. Trade and other receivables November 30, 2025 February 28, 2025 Trade receivables $ 863,435 $ 456,795 Other receivables 222,018 176,942 $ 1,085,453 $ 633,737 Allowance for doubtful accounts as at November 30, 2025 was $ 69,187 (February 28, 2025 – $44,773). The following is an aging analysis of the Company’s trade and other receivables: Aging in Days Total Receivable Current 31 to 60 61 to 90 91+ February 28, 2025 $ 633,737 $ 549,107 $ 41,062 $ 3,452 $ 40,115 November 30, 2025 $ 1,085,452 $ 772,120 $117,340 $ 150,478 $ 45,514 6. Equipment Scanners and Tablets Cost Accumulated Amortization Net Book Value Balance at February 29, 2024 $ 327,335 $ 325,809 $ 1,526 Additions / amortization - 1,071 (1,071) Balance at February 28, 2025 $ 327,335 $ 326,880 $ 455 Additions / amortization 8,912 1,351 7,561 Balance at November 30, 2025 $ 336,247 $ 328,231 $ 8,016 7. Intangible assets Computer Software Cost Accumulated Amortization Net Book Value Balance at February 29, 2024 $ 811,791 $ 766,789 $ 45,002 Additions / amortization 33,900 26,147 7,753 Balance at February 28, 2025 $ 845,691 $ 792,936 $ 52,755 Additions / amortization 18,550 14,426 4,124 Balance at November 30, 2025 $ 864,241 $ 807,362 $ 56,879 PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 12 8. Trade and other payables November 30, 2025 February 28, 2025 Trade payables $ 664,556 $ 911,539 QST payable - 3,528 Other payables 50,718 52,926 Accrued liabilities 133,352 217,931 $ 848,626 $ 1,185,924 Trade payables are non-interest bearing and payable within thirty (30) days. 9. Share capital (a) Authorized Unlimited number of common shares with no par value. Unlimited number of preference shares. The preference shares are without par value, redeemable, non-voting and non-participating (none currently issued and outstanding). (b) Issued Common Shares Number Amount Balance, February 29, 2024 27,271,007 $ 9,177,036 Common share activity - - Balance, February 28, 2025 27,271,007 $ 9,177,036 Issuance of common shares in private placement 2,913,147 393,275 Common shares issued in settlement of debt 3,088,132 416,898 Balance, November 30, 2025 33,272,286 $ 9,987,210 (i) In March 2025, the Company closed a non-brokered private placement of 2,913,147 common shares at a price of $0.135 per common share for total proceeds of $393,274. The common shares were issued at a price equal to the closing market price of the common shares of the Company as listed on the Canadian Securities Exchange ("CSE") on March 7, 2025, being $0.135, in accordance with the policies of the CSE. All common shares are subject to a statutory hold period of four months and one day from the date of issuance. (ii) In March 2025, the Company settled debt in the amount of $416,898 owed by the Company to certain creditors of the Company is exchange for an aggregate of 3, --- 088,132 common shares at a price of $0.135 per common share. All common shares are subject to a statutory hold period of four months and one day from the date of issuance. PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 13 10. Stock option reserve The Company maintains an employee stock option plan under which the Board of Directors, or the compensation committee of the Board of Directors, may from time to time grant to employees, officers, directors or consultants of the Company, options to acquire common shares in such numbers, for such terms and at such exercise prices, as may be determined by the Board of Directors or the compensation committee of the Board of Directors. The stock option plan provides that the maximum number of common shares in the capital of the Company that may be reserved for issuance for all purposes under the stock option plan shall not exceed 20% of the total issued and outstanding common shares. The following table reflects the continuity of stock options for the nine-month period ended November 30, 2025, and the year ended February 28, 2025: Number of stock options Exercise Price Balance, February 29, 2024 2,275,545 $ 1.13 Issuance of options (i) 1,685,000 0.14 Balance, February 28, 2025 3,960,545 $ 0.59 Options expired (ii) (213,750) 1.14 Options expired (iii) (135,000) 1.75 Balance, November 30, 2025 3,611,795 $ 0.49 The following table reflects the actual stock options issued and outstanding as at November 30, 2025: Exercise Price ($) Remaining contractual life (years) Number of options outstanding Options vested (exercisable) Estimated grant date fair value ($) March 1, 2027 0.81 1.25 569,445 521,991 367,071 January 2, 2027 0.80 1.09 1,357,350 989,734 525,275 January 30, 2030 0.135 4.17 1,685,000 351,042 227,230 0.49 2.17 3,611,795 1,862,767 1,119,576 (i) On January 30, 2025, the Company granted 1,685,000 stock options to directors and employees of the Company. The options were exercisable at a price of $0.135 per common share and will expire on January 30, 2030. 1,000,000 options to an employee of the Company vest in 6% increments quarterly with the first 6% having vested on April 30, 2025. 685,000 options were issued to directors and an employee of the company vest in 25% increments yearly with the first vesting on January 30, 2026. The grant date fair value of the stock options was estimated to be $227,230 using the Black-Scholes valuation model with the following weighted average assumptions: expected divided yield of 0%, expected volatility of 132%, risk free interest rate of 3% and expected life of 5 years. (ii) On July 17, 2025, 213,750 of Company’s stock options granted to employees, directors and consultants expired. PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 14 10. Stock option reserve (continued) (iii) On July 17, 2025, 135,000 of Company’s stock options granted to employees, directors and consultants expired. 11. Expenses categorized by nature Three Months Ended Nine Months Ended November 30, November 30, Cost of sales 2025 2024 2025 2024 External processing charges (note 12) $ 950,042 $ 610,641 $ 2,840,334 $ 1,821,227 Computer and web access charges 1,195 2,039 4,106 5,559 $ 951,237 $ 612,680 $ 2,844,440 $ 1,826,786 Three Month --- s Ended Nine Months Ended November 30, November 30, Administrative expenses 2025 2024 2025 2024 Salaries and Benefits (note 12) $ 307,840 $ 168,353 $ 869,786 $ 523,303 General and administrative expenses 102,156 68,367 264,539 203,944 Travel and business development 31,831 5,139 46,776 19,068 Consulting fees (note 12) 30,840 23,018 97,544 96,579 Transfer agent and filing fees 19,145 16,198 42,641 40,337 Investor relations 15,845 4,591 33,434 37,552 Accounting and office 10,487 10,325 38,612 30,804 Professional fees 9,927 9,054 28,999 27,456 Amortization (notes 6 and 7) 5,455 8,073 15,777 22,817 Foreign exchange loss (gain) (5,454) (12,058) 24,978 (8,231) $ 528,072 $ 301,060 $ 1,463,086 $ 993,629 12. Related party balances and transactions During the three and nine month period ended November 30, 2025, the Company incurred bookkeeping fees, office rental, and warehouse sorting costs to a company with a common office and director. Warehouse sorting is included in cost of sales in the amount of $31,139 for three month and $96,642 for nine month period ended November 30, 2025 ($29,549 for three month and $76,299 for the nine month period ended November 30, 2024). Bookkeeping fee and office rental are included in accounting and office expense in the amount of $3,054 for the three month and $9,426 for the nine month period ended November 30, 2025 ($3,054 for three month and $9,162 for the nine month period ended November 30, 2024). During the three and nine month periods ended November 30, 2025 and 2024, the Company had the following transactions with shareholders, management and directors: PUDO Inc. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended November 30, 2025 and 2024 (Expressed in Canadian Dollars) (Unaudited) P a g e | 15 12. Related party balances and transactions (continued) Three Months Ended Nine Months Ended November 30, November 30, 2025 2024 2025 2024 Share based compensation $ 48,913 $ 43,126 $ 149,200 $ 133,073 Salaries and benefits 90,199 24,855 269,142 74,098 Consulting fees 10,487 10,325 31,248 48,804 $ 149,599 $ 78,306 $ 449,589 $ 255,975 As at November 30, 2025, balances payable to the related parties noted above amounted to $47,136 (February 28, 2025 - $364,333) and are included in trade and other payables. These balances are unsecured, non-interest bearing and are due on demand. 13. Commitments and contingencies The Company has entered into various agreements for services, which if terminated by the Company would not have any significant impact on the Company’s consolidated financial statements. These amounts have not been accrued in the condensed interim consolidated financial statements as at November 30, 2025.