SEDAR Interim Financial Statements

Condensed Consolidated Interim Financial Statements (Expressed in Canadian Dollars) Telo Genomics Corp. For the Three and Six Months Ended December 31, 2025, and 2024 (unaudited) NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements. The accompanying unaudited interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor. Telo Genomics Corp. 5 Condensed Consolidated Interim Statements of Financial Position (Unaudited) (Expressed in Canadian dollars) Note As at December 31, 2025 As at June 30, 2025 Assets $ $ Current assets Cash 50,110 789,293 Amounts receivable 14,987 26,539 Prepaid expenses 51,355 76,430 116,452 892,262 Non-current assets Property and equipment 6 32,285 19,038 Right of Use of Asset 8 189,055 - Intangible asset 7 - - 221,340 19,038 Total assets 337,792 911,300 Liabilities and Equity Current liabilities Accounts payable and accrued liabilities 10 729,812 396,319 Lease Liabilities 8 77,850 - 807,662 396,319 Non-Current liabilities Lease Liabilities 8 83,455 - Total liabilities 891,117 396,319 Equity Share capital 9 24,624,595 24,574,226 Shares to be issued 9 - 50,369 Contributed surplus 9 6,440,366 6,440,366 Deficit (31,618,286) (30,549,980) Total equity (553,325) 514,981 Total liabilities and equity 337,792 911,300 Approved on behalf of the board of directors /s/ Dr. Sabine Mai /s/ Guido Baechler Director Director Going concern (Note 4) The accompanying notes form an integral part of these condensed consolidated interim financial statements. Telo Genomics Corp. 6 Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (Unaudited) (Expressed in Canadian dollars) Note For the three months ended December 31, 2025 For the three months ended December 31, 2024 For the six months ended December 31, 2025 For the six months ended December 31, 2024 Expenses $ $ $ $ General and administrative 11 261,731 248,541 509,101 456,197 Research and development 11 264,890 387,261 559,205 732,369 (526,621) (635,802) (1,068,306) (1,188,566) Other income: Grant subsidy - 21,585 - 21,585 Net loss and comprehensive loss (526,621) (614,217) (1,068,306) (1,166,981) Basic and diluted loss per share Weighted average number of common shares used in computing basic and diluted loss per share (0.01) 100,430,472 (0.01) 76,773,759 (0.01) 100,408,106 (0.02) 75,666,846 The accompanying notes form an integral part of these condensed consolidated interim financial statements. Telo Genomics Corp. 7 Condensed Consolidated Interim Statements of Changes in Equity (Unaudited) (Expressed in Canadian dollars) Number of Shares Share capital Contributed Surplus Deficit Total $ $ $ $ Balance, June 30, 2024 74,559,933 22,347,916 6,073,368 (27,831,227) 590,057 Private placement: Gross proceeds 25,459,000 2,545,900 2,545,900 Finders fees - cash (164,913) (164,913) Finders fees - warrants (91,428) 91,428 Other share issuance costs - (55,239) - - (55,239) Net loss for the period - - - (1,166,981) (1, --- 166,981) Balance, December 31, 2024 100,018,933 24,582,236 6,164,796 (28,998,208) 1,748,824 Number of Shares Share capital Shares to be issued Contributed Surplus Deficit Total $ $ $ $ $ Balance, June 30, 2025 100,018,933 24,574,226 50,369 6,440,366 (30,549,980) 514,981 Shares to be issued pursuant to an advisory agreement 411,539 50,369 (50,369) - - - Net loss for the period - - - - (1,068,306) (1,068,306) Balance, December 31, 2025 100,430,472 24,624,595 - 6,440,366 (31,618,286) (553,325) The accompanying notes form an integral part of these condensed consolidated interim financial statements. Telo Genomics Corp. 8 Condensed Consolidated Interim Statements of Cash Flows (Unaudited) (Expressed in Canadian dollars) Notes For the six months ended December 31, 2025 For the six months ended December 31, 2024 $ $ Operating activities: Net loss for the period (1,068,306) (1,166,981) Depreciation of property and equipment 6,11 22,691 8,692 Share-based compensation 9(c),11 - - Amounts receivable 11,552 1,723 Prepaid expenses 25,075 55,019 Accounts payable and accrued liabilities 333,493 228,182 Lease liabilities 8 161,305 - Cash used in operating activities (514,190) (873,365) Investing activity: Lab Equipment additions (16,676) - Right of Use Asset 8 (206,242) - Additions to property and equipment 6 (2,075) - Cash flows used in investing activities (224,993) - Financing activities: Proceeds from issuance of common shares - 2,545,900 Finders’ fees – cash - (164,913) Share issuance costs 9(b) - (55,239) Cash flows from financing activities - 2,325,748 Change in cash for the period (739,183) 1,452,383 Cash, beginning of year 789,293 796,020 Cash, end of period 50,110 2,248,403 The accompanying notes form an integral part of these condensed consolidated interim financial statements. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 9 1. Reporting entity Telo Genomics Corp. (the “Company”) was incorporated in Canada on May 25, 2014, and its shares are listed on the TSX Venture Exchange as a Tier 2 issuer under the symbol “TELO”, the OTCQB under the symbol “TDSGF” and the Frankfurt Stock Exchange in Germany under the symbol “3D0”. The Company’s registered office is located at 1200-750 West Pender Street, Vancouver, BC V6C 2T8 and its corporate head office is located at 555 Richmond St W (4th floor), Toronto, ON M5V 3B1The Company, through its wholly owned subsidiary Telo Genomics Holdings Corp., is developing diagnostic and prognostic products that may save lives, improve the quality of life, and reduce the cost of care associated with numerous diseases that display genomic instability. 2. Statement of compliance These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting”, and IFRS as issued by the International Accounting Standards Board (“IASB”). These condensed consolidated interim financial statements should be read in conjunction with the company’s audited financial statements as at and for the year ended June 30, 2025, as some disclosures from the annual financial statements may have been condensed or omitted. The unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors on March 02, 2026. 3. Basis of preparation (a) Basis of measurement Thes --- e condensed consolidated interim financial statements have been prepared on the historical cost basis except for certain financial instruments at fair value through profit or loss which are measured at fair value. These condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for cash flow information. (b) Basis of consolidation These condensed consolidated interim financial statements comprise the financial statements of the Company and its wholly owned subsidiary, Telo Genomics Holdings Corp., a corporation incorporated under the Canadian Business Corporations Act. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company using consistent accounting policies. All intra-group balances, income and expenses, equity and dividends resulting from intra-group transactions have been eliminated upon consolidation. (c) Functional and presentation currency These condensed consolidated interim financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiary. (d) Significant accounting judgments, estimates and assumptions The preparation of the condensed consolidated interim financial statements requires management to use judgment in applying its accounting policies and estimates and assumptions about the future. Estimates and other judgments are continuously evaluated and are based on management’s experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 10 3. Basis of preparation (continued) (d) Significant accounting judgments, estimates and assumptions (continued) Significant estimates The preparation of the condensed consolidated interim financial statements in accordance with IFRS requires the Company to make estimates when applying accounting policies. The most significant estimates are as follows: ● Share-based compensation - The fair value of share-based payments and warrants is subject to the limitations of the Black-Scholes option pricing model that incorporates market data and involves uncertainty in estimates used by management in the assumptions. Because the Black-Scholes option pricing model requires the input of highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect the fair value estimate. ● Provision for legal contingency - Management evaluates the status of known legal matters based on the best information available, including advice from legal counsel where appropriate. Provisions are recognized when it is determined that an outflow of resources is probable and a reliable estimate can be made. ● Valuation of right-of-use asset and lease liabilities - The application of IFRS 16 requires the Company to make judgments that affect the valuation of the right-of-use assets and the valuation of lease liabilities. These include: determining agreements in the scope of IFRS 16, determining the contract term and determining the interest rate used for the discounting of --- cash flows. The lease term determined by the Company is comprised of the non-cancellable period of lease agreements, periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise those options. The present value of the lease payment is determined using a discount rate representing the rate of its Debenture financing. Significant judgments The preparation of the condensed consolidated interim financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments in applying the Company’s financial statements are as follows: ● Going concern - The assessment of whether the going concern assumption is appropriate requires management to take into account all available information about the future, which is at least, but not limited to,12 months from the end of the reporting period. The Company is aware that material uncertainties exist related to events or conditions that may cast significant doubt upon the Company’s ability to continue as a going concern. ● Research and development - Management monitors the progress of its research and development activities. Significant judgment is required to distinguish between the research and development phases and if development cost capitalization criteria are met. Development costs are recognized as an asset when the following criteria are met: (i) technical feasibility; (ii) intention to complete the project; (iii) the ability to use or sell: (iv) the ability to generate future economic benefits; (v) availability of technical and financial resources; and (vi) the ability to measure the expenditures reliably. Management considers these factors in aggregate and applies significant judgment to determine whether the product is feasible. To date, management’s assessment has concluded that the capitalization criteria have not been met; hence, research and development costs have been expensed as incurred. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 11 4. Going concern These condensed consolidated interim financial statements have been prepared on a going concern basis which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due. The Company is a research and development stage company and as such is primarily dependent on the funding from investors to continue as a going concern. In the future, the Company's ability to continue as a going concern will be dependent upon its ability to attain profitable operations and generate funds there from, and/or to continue to obtain funding through equity or debt financings sufficient to meet current and future obligations. These condensed consolidated interim financial statements do not reflect any other adjustments or reclassification of assets and liabilities which would be necessary if the Company were unable to continue its operations. Such adjustments could be material. The disclosed factors indicate the existence of material uncertainties that may cast signif --- icant doubt about the Company’s ability to continue as a going concern. During the period ended December 31, 2025, the Company incurred a net loss of $ 1,068,306 (December 31, 2024 - $1,166,981) and has an accumulated deficit of $ 31,618,286 (June 30, 2025 - $30,549,980). 5. Summary of material accounting policies The accounting policies set out below have been applied consistently to all periods presented in the condensed consolidated interim financial statements, unless otherwise indicated. (a) Research and development The Company incurs costs on activities that relate to research and development of new technologies. Research and development costs are expensed, except in cases where development costs meet certain identifiable criteria for deferral, including technical and economic feasibility. Development costs are capitalized only if the expenditures can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to, and has sufficient resources to complete development and to use or sell the asset. Deferred development costs are amortized over the life of related commercial production, or in the case of serviceable property and equipment, are included in the appropriate property group and are depreciated over its estimated useful life. As at December 31, 2025, and 2024, the Company has not capitalized any research and development costs. (b) Financial instruments The following is the Company’s accounting policy for financial instruments under IFRS 9 Financial Instruments (“IFRS 9”): (i) Financial assets and liabilities The Company classifies its financial assets into the following categories, depending on the purpose for which the asset was acquired. Management determines the classification of its financial assets at initial recognition. Amortized cost - Amortized cost are those assets which are held within a business whose objective is to hold financial assets to collect contractual cash flows, and the terms of the financial assets must provide on specified dates cash flows solely through the collection of principal and interest. Fair value through profit or loss (“FVTPL”) - A financial asset shall be measured at fair value through profit or loss unless it is measured at amortized cost or FVOCI. The Company may, however, make the irrevocable option to classify particular investments as FVTPL. Management determines the classification of its financial liabilities at initial recognition. Amortized cost - The Company classifies all financial liabilities as subsequently measured at amortized cost using the effective interest method, except for financial liabilities carried at FVTPL and certain other exceptions. Financial liabilities are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 12 5. Summary of material accounting policies (continued) (b) Financial instruments (continued) The following table shows the classification under IFRS 9: Financial Instrument Classification Cash FVTPL Accounts payable and accrued liabilities Amortized Cost (ii) Fair value of financial instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between m --- arket participants at the measurement date. The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices, without any deduction for transaction costs. For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques that are recognized by market participants. Such techniques may include using recent arm's length market transactions, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis or other valuation models. For those financial instruments where fair value is recognized in the consolidated statement of financial position the methods and assumptions used to develop fair value measurements have been classified into one of the three levels of the fair value hierarchy for financial instruments: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; • Level 3 – Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. The following methods and assumptions were used to estimate the fair values: Cash is measured at fair value which is determined using Level 1 inputs. Accounts payable and accrued liabilities are carried at amortized cost, which approximates fair value due to their short-term nature. (c) Share-based payments For equity-settled share-based payments to non-employees, the Company measures the equity awards issued as the fair value of the goods or services received, and the corresponding increase in equity, unless that fair value cannot be estimated reliably. When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value of the equity award is measured by use of a valuation model. Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date measured by use of a valuation model. The fair value of the equity instruments granted is recognized as an expense over the estimated vesting period with a corresponding increase to contributed surplus. Consideration paid for the shares on the exercise of stock options is credited to share capital; upon exercise, shares are issued from treasury and the amount reflected in contributed surplus is credited to share capital. Forfeited or expired equity instruments are not adjusted through earnings and contributed surplus. (d) Share capital Equity instruments are contracts that give a residual interest in the net assets of the Company. Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company’s common shares, share options, and warrants are classified as equity instruments. Incremental costs directly attributable to the issue of new common shares are shown in equity as a deduction from the proceeds. Where the Company issues common shares and warrants together as units, value is allocated first to share capital based on the market value of common shares on the date of issue, with any residual value from the proc --- eeds being allocated to the warrants. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 13 5. Summary of material accounting policies (continued) (e) Earnings (loss) per share Basic earnings (loss) per share is calculated by dividing the net earnings available to common shareholders divided by the weighted average number of common shares outstanding during the period. The diluted earnings per share are calculated based on the weighted average number of common shares outstanding during the period, plus the effects of the dilutive common share equivalents. This method requires that the dilutive effect of outstanding options and warrants issued be calculated using the treasury stock method. This method assumes that all common share equivalents have been exercised at the beginning of the period (or at the time of issuance, if later), and that the funds obtained thereby were used to purchase common shares of the Company at the average trading price of common shares during the period. (f) Government grants Government grants are recognized when there is reasonable assurance that the funds will be received and that the Company will comply with all requirements of the program for which such grants will be received. (g) Right-of-use assets and lease liabilities The Company assesses whether a contract is or contains a lease at inception of a contract. The Company recognizes a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a ease term of 12 months or less) and leases of low value assets. For these leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term unless another systematic basis is more representative of the usage of the economic benefits from the leased asset. The lease liability is initially measured at the present value of the future lease payments at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrow rate. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The right-of-use assets comprise the initial measurement of the corresponding lease liability, payments made on or before the lease commencement and any direct costs. They are subsequently measured at cost less depreciation and any impairment losses. Right-of-use assets are depreciated over the shorter period of the lease term and useful life of the underlying asset. (h) New standards adopted The following amendment was effective for annual reporting periods beginning on or after January 1, 2024. Classification of Liabilities as Current or Non-current (Amendments to IAS 1) – the amendments provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting period date. The amendment did not have a material impact on the results and financial position of the Company. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 14 5. Summary of mater --- ial accounting policies (continued) (i) New standards not yet adopted IFRS 18 Presentation and Disclosure in Financial Statements – IFRS 18 introduces three sets of new requirements to give investors more transparent and comparable information about companies’ financial performance for better investment decisions. 1. Three defined categories for income and expenses – operating, investing or financing – to improve the structure of the income statements, and require all companies to provide new defined subtotals, including operating profit; 2. Requirement for companies to disclose explanations of management-defined performance measures (MPMs) that are related to the income statement; and 3. Enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes. This new standard is effective for reporting periods beginning on or after January 1, 2027. The Company will be evaluating the impact of the above standard on its condensed consolidated interim financial statements. 6. Property and equipment Cost Computer Equipment Computer Software & Lab Equipment Furniture & Equipment Total Balance, June 30, 2024 $ 127,003 $ 802,952 $ 16,867 $ 946,822 Additions 3,250 - - 3,250 Balance, June 30, 2025 130,253 802,952 16,867 950,072 Additions - 16,676 2,075 18,751 Balance, December 31, 2025 $ 130,253 $ 819,628 $ 18,942 $ 968,823 Accumulated depreciation Computer Equipment Computer Software & Lab Equipment Furniture & Equipment Total Balance, June 30, 2024 $ 119,599 $ 781,736 $ 15,247 $ 916,582 Depreciation 7,114 6,681 657 14,452 Balance, June 30, 2025 126,713 788,417 15,904 931,034 Depreciation 1,624 3,448 432 5,504 Balance, December 31, 2025 $ 128,337 $ 791,865 $ 16,336 $ 936,538 Carrying amounts Computer Equipment Computer Software & Lab Equipment Furniture & Equipment Total Balance, June 30, 2025 $ 3,540 $ 14,535 $ 963 $ 19,038 Balance, December 31, 2025 $ 1,916 $ 27,763 $ 2,606 $ 32,285 Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 15 7. Intangible asset On April 27, 2020, the Company repurchased from Knight Therapeutics Inc. (“Knight”) the exclusive license to commercialize diagnostic and prognostic test products of the Company and the right to act as the exclusive distributor of such products in Canada. In consideration for the rights, the Company paid $5,000 and issued 50,000 share purchase warrants to Knight. Each warrant entitles the holder to acquire one common share of the Company at an exercise price of $0.25 per share for a period of five years from the date of issuance. The warrants are exercisable at $0.25 per share for five years from the date of grant. The fair value of these warrants was determined to be $7,700 using the Black-Scholes valuation model and the following inputs: i) exercise price $0.25, ii) stock price $0.15, iii) volatility: 243%, iv) risk free rate: 1.50%. In addition, the Company paid $3,671 professional fees in connection with the repurchase. The intangible asset has an indefinite useful life. During the year ended June 30, 2025, the Company wrote down the intangible asset of $16,371. 8. Right of Use Assets and Lease Liabilities The Company and its wholly owned subsidiary have a rental lease agreement in place for 2 years in length of term. Right-of- use assets consist of operational space for lab and office. Right-of-Use Assets December 31, --- 2025 December 31, 2024 Opening balance $ 206,242 $ - Depreciation (17,187) - Balance, December 31, 2025 $ 189,055 $ - Lease Liabilities December 31, 2025 December 31, 2024 Opening balance $ 206,242 $ - Prepayments (30,000) Payments (14,937) - Balance, December 31, 2025 $ 161,305 $ - Current portion $ 77,850 $ - Non-current portion $ 83,455 $ - The estimated annual commitment over the term of the leases is as follows: 2026 $ 77,850 2027 $ 83,455 Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 16 9. Share capital (a) Authorized The Company has authorized share capital of an unlimited number of common voting shares without par value, an unlimited number of non-voting common shares without par value, and an unlimited amount of Class A, B, C, and D shares. (b) Shares issued and outstanding On July 10, 2025, the Company issued 214,605 common shares at a fair value of $0.12 per share and 196,934 common shares at a fair value of $0.125 per share in relation to a consulting agreement for services rendered, for a total value of $50,369. On December 23, 2024, the Company issued 25,459,000 units at $0.10 per unit for gross proceeds of $ 2,545,900. Each unit consisted of one common share and one share purchase warrant, with each whole warrant exercisable into one additional common share at a price of $0.15 per share until December 23, 2027, subject to acceleration. The Company incurred finders fees of $164,913, other share issuance costs of $55,730 and issued 1,649,130 finders warrants to purchase an aggregate of 1,649,130 common shares at a price of $0.10 per share until December 23, 2025. The finders’ warrants had a fair value of $98,947 estimated using the Black-Scholes valuation model and the following inputs: i) exercise price $0.10, ii) stock price $0.115, iii) volatility 114.76%, iv) risk free rate: 3.06%, v) expected life: 1 year. (c) Stock options The Company has an incentive stock option plan (the “Plan”) whereby the Company may grant directors, officers, employees and contractors’ options to purchase common voting shares of the Company. The terms and conditions of each option granted under the Plan are determined by the Board of Directors. The Company may grant stock options to a maximum of 10% of the issued shares of the Company at the date of granting the stock options and stock options are exercisable over periods of up to 10 years. The minimum exercise price of each stock option must not be less than the discounted market price. In estimating the fair value of options issued using the Black-Scholes option pricing model, the Company is required to make assumptions. The expected volatility assumption is based on the historical volatility of the Company’s common share price on the TSX Venture Exchange. The risk-free interest rate assumption is based on yield curves on Canadian government zero-coupon bonds with a remaining term equal to the stock options’ expected life. The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model. The Company has historically not paid dividends on its common stock. On December 30, 2025, 350,000 options with an exercise price of $0.15 per common share expired unexercised. On August 07, 2025, 8,075 options with an exercise price of $0.35 per common share expired unexercised. On April 1, 2025, the Company granted 350,000 stock opt --- ions to a director of Company. The options are exercisable for $0.15 per share, vesting immediately from the date of grant and expiring 5 years from the date of grant. The fair value of the options was estimated at $30,456, using the Black-Scholes option pricing model with the following inputs: i) exercise price $0.15, ii) stock price $0.12, iii) volatility: 100.26%, iv) risk free rate: 2.59%, v) expected life: 5 years. On April 1, 2025, the Company granted 500,000 stock options to a consultant of the Company. The options are exercisable for $0.15 per share, vesting immediately from the date of grant and expiring 5 years from the date of grant. The fair value of the options was estimated at $43,507, using the Black-Scholes option pricing model with the following inputs: i) exercise price $0.15, ii) stock price $0.12, iii) volatility: 100.26%, iv) risk free rate: 2.59%, v) expected life: 5 years. On March 6, 2025, the Company granted 2,150,000 stock options to directors and officers of the Company. The options are exercisable for $0.15 per share, vesting immediately from the date of grant and expiring 5 years from the date of grant. The fair value of the options was estimated at $175,834, using the Black-Scholes option pricing model with the following inputs: i) exercise price $0.15, ii) stock price $0.11, iii) volatility: 105.72%, iv) risk free rate: 2.75%, v) expected life: 5 years. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 17 9. Share capital (continued) (c) Stock options (continued) On March 6, 2025, the Company granted 250,000 stock options to employees and consultant of the Company. The options are exercisable for $0.15 per share, vesting immediately from the date of grant and expiring 3 years from the date of grant. The fair value of the options was estimated at $15,959, using the Black-Scholes option pricing model with the following inputs: i) exercise price $0.15, ii) stock price $0.11, iii) volatility: 102.01%, iv) risk free rate: 2.61%, v) expected life: 3 years. On March 6, 2025, the Company granted 60,000 stock options to a consultant of the Company. The options are exercisable for $0.15 per share, vesting immediately from the date of grant and expiring 1 years from the date of grant. The fair value of the options was estimated at $2,295, using the Black-Scholes option pricing model with the following inputs: i) exercise price $0.15, ii) stock price $0.11, iii) volatility: 112.67%, iv) risk free rate: 2.67%, v) expected life: 1 year. Changes in the number of options outstanding and exercisable are as follows: December 31, 2025 June 30, 2025 Weighted Weighted Number of average exercise Number of average exercise options price options price Balance, beginning of year 4,245,624 $ 0.51 3,333,143 $ 0.64 Granted - - 3,310,000 0.15 Expired (358,075) 0.15 (2,397,519) 0.20 Cancelled - - - - Balance, end of period 3,887,549 $ 0.54 4,245,624 $ 0.51 Options exercisable, end of period 3,887,549 $ 0.54 4,245,624 $ 0.51 The following is a summary of stock options issued under the Plan as at December 31, 2025: Expiry Date Number outstanding Options exercisable Weighted average exercise price March 6, 2026 60,000 60,000 0.15 April 1, 2026 100,000 100,000 0.64 September 26, 2026 121,924 121,924 10.15 October 27, 2026 20,000 20,000 2.20 January 18, 2027 50,625 50,625 2.85 March 15, 2027 250,000 250,000 0.335 July 18, 2027 --- 10,000 10,000 0.34 September 30, 2027 175,000 175,000 0.265 March 6, 2028 250,000 250,000 0.15 December 8, 2028 200,000 200,000 0.20 March 6, 2030 1,800,000 1,800,000 0.15 April 1, 2030 850,000 850,000 0.15 3,887,549 3,887,549 $ 0.54 As of December 31, 2025, the weighted average remaining contractual life of the options was 3.37 years (June 30, 2025 – 3.93 years). Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 18 9. Share capital (continued) (d) Warrants On December 23, 2025, 1,649,130 warrants with an exercise price of $0.10 per common share expired unexercised. On December 23, 2024, as part of the unit offering, the Company issued 25,459,000 warrants to subscribers. Each warrant is exercisable into one additional common share at an exercise price of $0.15 per share until December 23, 2027, subject to acceleration. The Company also issued 1,649,130 finders’ warrants to purchase an aggregate of 1,649,130 common shares at a price of $0.10 per share until December 23, 2025. The finders’ warrants had a fair value of $98,947, estimated using the Black-Scholes valuation model and the following inputs: i) exercise price $0.10, ii) stock price $0.115, iii) volatility 114.76%, iv) risk free rate: 3.06%, v) expected life: 1 year. Changes in the number of warrants outstanding are as follows: December 31, 2025 June 30, 2025 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Balance, beginning of year 28,733,130 $ 0.16 7,402,750 $ 0.38 Issued - - 27,108,130 0.15 Expired (1,649,130) 0.10 (5,777,750) 0.40 Balance, end of period 27,084,000 $ 0.16 28,733,130 $ 0.16 The following is a summary of share purchase warrants as at December 31, 2025: Expiry Date Number outstanding Weighted average exercise price June 21, 2027 1,625,000 $ 0.40 December 23, 2027 25,459,000 0.15 27,084,000 $ 0.16 As of December 31, 2025, the weighted average remaining contractual life of the warrants was 1.95 years (June 30, 2025 – 2.34 years). 10. Key management personnel compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The Company has identified its directors and officers as its key management personnel. In addition to their salaries, the Company also provides non-cash benefits and participation in the Stock Option Plan. The following table details the compensation to key management personnel and directors: December 31, 2025 December 31, 2024 Salaries, fees, and short-term benefits $ 151,124 $ 215,397 Share-based compensation - - $ 151,124 $ 215,397 As at December 31, 2025, the Company has $164,277 (June 30, 2025 - $68,381) recorded within accounts payable and accrued liabilities relating to amounts payable to key management personnel. The balance is unsecured, non-interest bearing and due pursuant to normal trade creditor terms. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 19 11. Supplemental disclosures – Consolidated statements of loss and comprehensive loss General and administrative expenses include depreciation of $ 9,080 (2024 – $ Nil), share-based compensation of $Nil (2024 - $Nil), employee wages and benefits of $ 80,559 (2024 - $ 79,213). Research and development expenses --- include depreciation of $ $ 8,692 (2024 – $5,410), share-based compensation of $Nil (2024 - $Nil) and employee wages and benefits of $ 142,495 (2024 - $ 246,762). 12. Financial instruments and financial risk management a. Risks arising from financial instruments i. Market risk The Company is exposed to foreign exchange risk, the risk that the fair value of future cash flows for financial instruments will fluctuate because of changes in foreign exchange rates, due to its United States dollar denominated in accounts payable and accrued liabilities. As at December 31, 2025 and 2024, the Company had no cash and $ 207,226 (June 30, 2025 – $41,917) in accounts payable and accrued liabilities denominated in the United States dollar. A 10% change in the value of the US dollar against the Canadian dollar would not result in a material effect on net loss for the year. The Company is not exposed to any significant interest risk as it does not have any variable rate borrowings. ii. Credit risk Credit risk is the potential that customers or a counterparty to a financial instrument fail to meet their obligation to the Company. The Company believes this risk to be low as there are no trade receivables and no revenues have been earned to December 31, 2025. Additionally, amounts receivable are primarily composed of government remittances receivable in which the Company believes the collection risk is low. Additionally, the Company mitigates credit risk by holding all cash in a chartered bank. iii. Liquidity risk Liquidity risk is the risk the Company will encounter difficulties in meeting its financial obligations as they become due. The Company manages liquidity risk through cash management. In managing liquidity risk, the Company maintains access to equity markets, the availability of which is dependent on market conditions. The Company monitors its requirements regularly and believes there may not be sufficient funding for the foreseeable future. All financial liabilities are current and due within the next twelve months. b. Capital management The Company’s objective when managing capital is for the Company to safeguard the entity’s ability to continue as a going concern, so that it can continue to explore and develop its research to ultimately provide returns for shareholders and benefits for other stakeholders. The Company sets the amount of capital in proportion to risk and manages the capital structure and makes adjustments to it in light of changes to economic conditions and the risk characteristics of the underlying assets as with consideration of externally imposed capital requirements. In order to maintain or adjust the capital structure, the Company may issue new shares or attempt to obtain debt financing. The Company’s management of capital as of December 30, 2025, consists of cash and the components of shareholders’ equity in the definition of capital. There were no changes in the Company’s approach to capital management during the current fiscal year. The Company is not subject to externally imposed capital requirements. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 20 13. Segmented information The Company has a single operating segment, focused on the development and commercialization of predictive technological products designed to personalize treatment plans for patients who have specific conditions. Substantially all --- of the Company’s employees and assets are located within Canada. 14. Commitments In October 2022, the Company renewed its agreement for lease of office and laboratory space at MaRS Discovery District for a period of one-year, effective November 1, 2022 until October 31, 2023. In accordance with the lease renewal, the Company committed to payments of $8,925 per month. In October 2023, the Company extended its agreement for lease of office and laboratory space at MaRS Discovery District for a period of six months effective November 1, 2023 until April 30, 2024 with monthly payments of $9,750. The Company further extended this agreement for a period of five months effective May 1, 2024, until September 30, 2024 with monthly payments of $9,750. The Company further extended this agreement for a period of six months effective October 1, 2024, until March 31, 2025 with monthly payments of $10,550. The Company further extended this agreement for a period of six months effective April 1, 2025, until September 30, 2025 with monthly payments of $8,225. Subsequent to the year-end, the Company entered into a new lease agreement. On July 28, 2025, the Company entered into a new lease agreement for operational and office space commencing November 15, 2025, for a period of twenty-four months. The monthly payments are $11,300 per month inclusive of taxes. 15. Contingent liability As of December 31, 2025, the Company is a defendant in a legal action brought by the Company’s former President and Chief Technical Officer, relating to compensation and bonuses allegedly owing. The Statement of Claim was filed in June 2025, and the plaintiff is seeking an amount of $522,083 plus interest. On August 8, 2025, the Company filed a Statement of Defence and Counterclaim in the amount of $684,278 plus interest. The Company is preparing documents for discovery and expects next to go to mediation in hopes to negotiate a settlement and avoid litigation. The Company expects that a settlement can be reached prior to litigation. Given the Company offer made on April 1, 2025, management believes the financial impact would be $89,000 and has accrued a liability for the fiscal period ended December 31, 2025. Telo Genomics Corp. For the Period Ended December 31, 2025 and 2024 Notes to the Condensed Consolidated Interim Financial Statements (Expressed in Canadian dollars) 21 16. Tax losses The income tax provision recorded differs from the income tax obtained by applying the statutory income tax rate to the loss for the year and is reconciled as follows: 2025 2024 Loss before income taxes $ (2,719,000) $ (2,713,000) Statutory income tax rate 27% 27% Expected income tax recovery (734,000) (733,000) Non-deductible items 78,000 19,000 Share issuance costs (60,000) (32,000) Change in tax assets not recognized 716,000 746,000 Income tax expense $ - $ - As at June 30, 2025 and 2024, the Company has unused tax losses and deductible temporary differences for which no deferred tax assets have been recognized. The tax effected amounts are as follows: 2025 2024 Non-capital losses $ 7,110,000 $ 6,408,000 Property and equipment 230,000 227,000 Other 170,000 149,000 $ 7,510,000 $ 6,784,000 The significant components of the Company’s temporary differences, unused tax credits and unused tax losses that have not recognized on the consolidated statements of financial position are as follows: June 30, 2025 $ Expiry Date Range June 30, 2024 $ Expiry Date Range Temporary differences Property and eq --- uipment 852,000 No expiry date 841,000 No expiry date Share issuance costs 302,000 2026 to 2029 224,000 2025 to 2028 Non-capital losses available for future years 26,302,000 2031 to 2045 23,733,000 2031 to 2044 Other 328,000 No expiry date 328,000 No expiry date Tax attributes are subject to review, and potential adjustment, by tax authorities. 17. Subsequent events Subsequent to December 31, 2025, 550,000 stock options expired unexercised. Subsequent to December 31, 2025, the Company closed the first tranche of non-transferable secured convertible debentures by issuing Debentures for gross proceeds of $840,000 (the “First Tranche”). The company issued to the purchasers one transferable detachable warrant (a "Warrant") for every $0.05 of principal amount of the Debentures subscribed for. The Company issued an aggregate of 16,800,000 Warrants in connection with the First Tranche. Each Warrant will be exercisable to acquire one Share at an exercise price of $0.08 per Share until February 17, 2027. Also issued 1,176,000 finder's warrants (each, a "Finder's Warrant"). Each Finder's Warrant will be exercisable to acquire one Share at an exercise price of $0.08 per Share until February 17, 2028.