SEDAR Interim Financial Statements

NEPRA FOODS INC. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 (EXPRESSED IN CANADIAN DOLLARS) 1 NOTICE OF NO AUDIT OR REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Under National Instrument 51-102, if an auditor has not performed a review of the interim financial statements they must be accompanied by a note indicating that the interim financial statements have not been reviewed by an auditor. The accompanying unaudited condensed consolidated interim financial statements have been prepared by and are the responsibility of management. The Corporation’s independent auditor has not performed a review of these condensed consolidated interim financial statements. 2 NEPRA FOODS INC. Condensed Consolidated Interim Statements of Financial Position (Unaudited - Expressed in Canadian Dollars) As at Notes December 31, 2025 March 31, 2025 ASSETS Cash $ 24,923 $ 44,737 Accounts receivable 5 527,809 789,504 Prepaid expenses and deposits 6 97,923 19,354 Inventory 7 1,066,648 1,335,861 Due from related party 15 593 621 Total current assets 1,717,896 2,190,077 Property and equipment 8 87,703 136,718 Right-of-use asset 9 1,478,096 1,783,922 Long-term deposits 6, 9 92,271 89,666 Total assets $ 3,375,966 $ 4,200,383 LIABILITIES AND SHAREHOLDERS' DEFICIENCY Current liabilities Accounts payable and accrued liabilities 11, 15 $ 2,224,906 $ 2,564,356 Factoring facility 5 266,091 185,831 Loan payable – current 12 2,303,765 2,932,747 Current portion of lease liability 10 317,831 300,432 Deferred Revenue 154,647 1,499 Total current liabilities 5,267,240 5,984,865 Loan payable – non-current 12 156,162 - Lease liability 10 1,799,941 2,137,958 Warrant liability 13 554,447 - Total liabilities 7,777,790 8,122,823 Shareholders' deficiency Share capital 14 17,167,119 16,927,052 Obligation to issue shares 137,776 - Reserves 14 1,613,153 1,560,108 Equity portion of debt 12, 15 547,449 547,449 AOCI 165,829 37,797 Deficit (24,033,150) (22,994,846) Total shareholders' deficiency (4,401,824) (3,922,440) Total liabilities and shareholders' deficiency $ 3,375,966 $ 4,200,383 Nature of operations and going concern (Note 1) Approved on behalf of the Board “David Wood” Director “William Hogan” Director The accompanying notes are an integral part of these condensed consolidated interim financial statements 3 NEPRA FOODS INC. Condensed Consolidated Interim Statements of Net and Comprehensive Loss For the Nine Months Ended December 31, 2025 and 2024 (Unaudited - Expressed in Canadian Dollars) For the nine months ended For the three months ended December 31, December 31, Notes 2025 2024 2025 2024 Revenue Sales $ 5,820,289 $ 3,904,751 $ 2,153,464 $ 1,422,031 Consulting 152,858 57,626 78,244 28,610 Total revenue 5,973,147 3,962,377 2,231,708 1,450,641 Cost of sales 7,8,9 4,117,523 3,051,509 1,594,978 1,053,061 Gross profit $ 1,855,624 $ 910,868 $ 636,730 $ 397,580 Expenses Accretion 12,15 209,131 129,444 71,497 45,377 Amortization 8,9 213,025 209,496 71,616 70,704 Bad debt expense (recovery) - (44,731) - (60,469) Consulting 22,126 713 46 - General and administrative 16 518,583 634,469 132,805 196,778 Professional fees 207,570 502,753 51,337 181,645 Research and development 37,941 51,146 12,751 12,682 Salaries and benefits 15 913,727 1,124,234 314,647 335,567 Stock based compensation 14 53,045 - 53,045 - Travel 33,727 80,670 14,854 22,391 2,208,875 2,688,194 722,598 804,675 Net loss before other items $ --- (353,251) $ (1,777,326) $ (85,868) $ (407,095) Other items Other income (2,597) 139,577 (7,752) 104,375 Finance costs 10,12 (623,249) (480,213) (220,273) (182,281) Foreign exchange 640 (3,906) 1,339 (3,906) Gain (Loss) on settlement of debt 12 (50,921) 69,014 (27,210) (76,046) Gain on forgiveness of lease payments 9 - 714,510 - 5,762 Gain (Loss) on change in FV (8,926) - 424,730 - Net income (loss) (1,038,304) (1,338,344) 84,966 (559,191) Other comprehensive income (loss) (items that may be reclassified to profit or loss) Exchange difference on translation of functional to presentation currencies 128,032 (129,063) 42,195 (115,413) Comprehensive income (loss) $ (910,272) $ (1,467,407) $ 127,161 $ (674,604) Income (loss) per share, basic and diluted $ (0.01) $ (0.02) $ 0.00 $ (0.01) Weighted average number of shares outstanding, basic and diluted 109,195,208 93,454,378 113,462,409 101,111,574 The accompanying notes are an integral part of these condensed consolidated interim financial statements 4 NEPRA FOODS INC. Condensed Consolidated Interim Statements of Cash Flows For the Nine Months Ended December 31, 2025 and December 31, 2024 (Unaudited - Expressed in Canadian Dollars) For the Nine Months Ended December 31, 2025, 2025 2024 Operating Activities Net loss for the period (1,038,304) (1,338,344) Adjustments for non-cash items: Amortization 272,518 373,064 Bad debt expense - (44,731) Accretion 209,131 129,444 Interest expense 264,175 340,488 Gain (Loss) on settlement of debt 50,921 (69,014) Gain on forgiveness of lease payments - (714,510) Inventory write-off 26,208 107,051 Stock based compensation 53,045 - Loss on change in FV (8,926) - Changes in non-cash working capital items: Accounts receivable 229,745 (68,649) Prepaid expenses (80,060) 158,656 Inventory 183,689 (355,960) Accounts payable and accrued liabilities (259,783) 485,383 Deferred Revenue 154,797 (617) Due from related party - 8,794 Net cash provided by operating activities 57,156 (988,945) Financing Activities Proceeds from issuance of common shares 682,628 - Proceeds from units not yet issued 137,776 - Issuance of shares - exercise of warrants 110,000 - Repayment of lease liability (388,496) (635,343) Loan borrowings 3,499,004 2,638,919 Loan repayments (4,199,898) (1,207,294) Accounts receivable factoring proceeds 89,538 283,446 Net cash used in financing activities (69,448) 1,079,728 Net increase in cash (12,291) 90,783 Effect of change in foreign exchange rates on cash (7,523) (120,523) Cash, beginning 44,737 65,925 Cash, ending 24,923 36,185 Supplemental Disclosure with Respect to Cash Flows (Note 17) The accompanying notes are an integral part of these condensed consolidated interim financial statements The accompanying notes are an integral part of these condensed consolidated interim financial statements. 5 NEPRA FOODS INC. Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity (Deficiency) For the Nine Months Ended December 31, 2025 and 2024 (Unaudited - Expressed in Canadian Dollars) Share capital Common shares Class A shares Amount Obligation to issue shares Reserves Equity portion of loans payable Accumulated other comprehensive income (loss) Deficit Total shareholders’ equity (deficiency) Balance, March 31, 2024 77,747,609 224,089 $ 15,590,807 $ - $ 1,560,108 $ 532,825 $ 177,638 $ (20,659,506) $ (2,798,128) Shares issued to settle debt 26,445,572 - 1,190,051 - - - - - 1,190,051 Equity portion of loans payable - - - - - 14,473 - - 14,473 C --- urrency translation adjustment - - - - - - (129,063) - (129,063) Net loss - - - - - - - (1,338,344) (1,338,344) Balance, December 31, 2024 104,193,181 224,089 $ 16,780,858 $ - $ 1,560,108 $ 547,298 $ 48,575 $ (21,997,850) $ (3,061,011) Balance, March 31, 2025 104,193,181 224,089 16,927,052 - 1,560,108 547,449 37,797 (22,994,846) (3,922,440) Shares issued in private placement 8,283,358 - 130,067 - - - - - 130,067 Shares issued for warrant exercise 1,100,000 - 110,000 - - - 110,000 Obligation to issue share capital - - - 137,776 - - 137,776 Share-based payment - - - - 53,045 - 53,045 Currency translation adjustment - - - - - - 128,032 - 128,032 Net loss - - - - - - - (1,038,304) (1,038,304) Balance, December 31, 2025 113,576,539 224,089 $ 17,167,119 $ 137,776 $ 1,613,153 $ 547,449 $ 165,829 $ (24,033,150) $ (4,401,824) NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 5 1. Nature of Operations and Going Concern Nepra Foods Inc. (“Nepra” or the “Company”) was incorporated on November 27, 2020 under the provisions of the British Columbia Business Corporations Act. The Company operates as a vertically integrated healthy plant- based food and speciality ingredient company supporting allergen free and functional food brands. The Company’s head office is located at 7025 S. Revere Parkway, Unit 100, Centennial, Colorado, USA 80112. The Company’s registered and records office is located at Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, Canada, V6E 4N7. The Company’s common shares are listed for trading on the Canadian Securities Exchange (“CSE”) under the symbol “NPRA”. These condensed consolidated interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes 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. During the nine months ended December 31, 2025, the Company incurred a net loss of $1,038,304 and as at December 31, 2025, had an accumulated deficit of $24,033,150. These factors indicate the existence of a material uncertainty that may cast a significant doubt about the Company's ability to continue as a going concern. The Company’s ability to continue its operations and to realize assets at their carrying values is dependent upon its ability to raise financing and generate profits and positive cash flows from operations in order to cover its operating costs. From time to time, the Company generates working capital to fund its operations by raising additional capital through equity or debt financing. However, there is no assurance that the Company will be able to continue to raise capital in the future. These condensed consolidated interim financial statements do not give effect to any adjustments required for the Company to realize its assets and discharge its liabilities in other than its normal course of business and at amounts different from those reflected in the accompanying condensed consolidated interim financial statements. Such adjustments could be material. 2. Basis of Presentation Statement of Compliance These condensed consolidated interim financial statements have been prepared in accordance with IFRS Accounting Standards (“IFRS”) applicable to the preparation of interim consolidated fina --- ncial statements, including International Accounting Standard (“IAS”) 34, Interim Financial Reporting (“IAS 34”), as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the IFRS Interpretations Committee (“IFRIC”). These condensed consolidated interim financial statements were approved and authorized for issuance on February 27, 2026, by the Directors of the Company. Basis of measurement These condensed consolidated interim financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for cash flow information. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 6 Basis of consolidation These condensed consolidated interim financial statements incorporate the accounts of the Company and its controlled subsidiaries from the date of acquisition. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Company’s wholly owned material subsidiaries include Nepra Foods, Ltd., incorporated on August 15, 2019 and Gluten Free Baking Solutions, LLC (“GFBS”), incorporated on August 10, 2016. All intercompany balances and transactions are eliminated on consolidation. Functional and presentation currency These condensed consolidated interim financial statements are presented in Canadian dollars, unless otherwise specified. The functional currency of the Company is the Canadian dollar and the functional currency of its wholly owned subsidiaries is the US dollar. 3. Material Accounting Policies The significant accounting policies applied in the preparation of these condensed consolidated interim financial statements are consistent with the accounting policies disclosed in Note 3 of the audited financial statements for the year ended March 31, 2025. These condensed consolidated interim statements should be read in conjunction with the Company’s audited financial statements for the year ended March 31, 2025. Accounting standards issued but not yet effective Other 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 impact on the Company’s condensed consolidated interim financial statements. 4. Critical Accounting Estimates and Judgments In preparing these condensed consolidated interim financial statements, management has made judgments, estimates and assumptions that affect the application of the Company’s accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised. In preparing these condensed consolidated interim financial statements, the significant estimat --- es and critical judgments were the same as those applied to the audited financial statements for the year ended March 31, 2025. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 7 5. Accounts Receivable Accounts receivable is composed of the following amounts: December 31, 2025 March 31, 2025 Trade receivables $ 341,904 $ 686,360 Trade receivables subject to factoring 266,091 185,831 Net trade accounts receivable 607,995 872,191 Other receivables 13,714 - Expected credit losses (108,871) (114,002) Sales tax receivable 14,971 31,315 $ 527,809 $ 789,504 On August 8, 2024 the Company entered into an accounts receivable factoring agreement with Gateway Trade Funding (the “Purchaser” or “Gateway”) whereby the Purchaser agreed to acquire, with recourse up to 80% of the Company’s present and future accounts receivable. As compensation for Gateway’s purchase of accounts, the Company shall pay, and Gateway shall be entitled to receive the Purchase Fees. All Purchase Fees shall be due at the time of purchase of the accounts receivable and is composed of (a) the discount fee and (b) the advance payment fee. The discount fee is equal to: (i) 1.2% of the gross amount of such accounts for the 30 day period, or part thereof, plus 0.042% each one day period, thereafter, the account remains unpaid. However, the minimum quarterly discount fee of $7,200, shall be paid by the Company on the last day of each quarter of the contract period. The advance payment fee is calculated based on the number of days between the date advances are made by Gateway to the Company and the date the receivable is collected calculated at a floating nominal annual rate (compounded monthly) per annum equal to the Prime Rate plus 2% per annum. The Advance Payment Fee shall be computed on the basis of a year of three hundred and sixty (360) days, for actual days elapsed. Changes in the Advance Payment Fee rate shall be made to reflect changes in the Prime Rate, with such changes to the Advance Payment Fee rate to take effect as and when such changes in the Prime Rate occur. Upon the occurrence of an event of default and so long as the event of default shall remain uncured, the advance payment fee plus the default rate of 2% per month (or if less, the maximum rate allowable by law) shall be charged on the entire outstanding obligations including advances pending collection from customers and unpaid fees. The Company has retained credit risk due to the recourse provision, and therefore, continues to recognize the transferred assets in their entirety in its Condensed Consolidated Interim Statements of Financial Position. As of December 31, 2025, the Company has $266,091 (March 31, 2025 - $185,831) of its accounts receivable factored for which proceeds have been advanced by Gateway under the accounts receivable factoring facility. Sales tax receivable represents input tax credits arising from sales tax levied on the supply of goods purchased or services received in Canada. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 8 6. Prepaid Expenses and deposits Prepaids and deposits are composed of the following amounts: December 31, 2025 March 31, 2025 Deposit on inventory $ 88,756 $ 1,723 Insurance 619 5,273 Other 8,548 12,358 $ 97, --- 923 $ 19,354 7. Inventory Inventory is composed of the following amounts: December 31, 2025 March 31, 2025 Raw materials $ 33,515 $ 64,219 Work-in-progress 4,686 - Finished goods 1,028,447 1,271,642 $ 1,066,648 $ 1,335,861 During the three and nine months ended December 31, 2025, the Company sold inventory with a value of $1,594,978 and $4,117,523 (three and nine months ended December 31, 2024, $1,053,061 and $3,051,509), respectively. During the three and nine months ended December 31, 2025, the Company incurred inventory write-offs of $19,982 and $26,208 (three and nine months ended December 31, 2024 - $35,153 and $107,051). NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 9 8. Property and Equipment Furniture and equipment Production equipment Leasehold improvements Computer equipment Total Cost Balance, March 31, 2024 $ 110,583 $ 349,926 $ 148,750 $ 60,247 $ 669,506 Transfer from ROU asset - 166,365 - - 166,365 Dispositions - (197,024) - - (197,024) Foreign exchange adjustment 6,644 19,957 - 3,619 30,220 Balance, March 31, 2025 $ 117,227 $ 339,224 $ 148,750 $ 63,866 $ 669,067 Foreign exchange adjustment (5,276) (28,979) 1,954 (2,874) (35,175) Balance, December 31, 2025 $ 111,951 $ 310,245 $ 150,704 $ 60,992 $ 633,892 Accumulated Amortization and Impairment Balance, March 31, 2024 $ 78,784 $ 196,055 $ 148,750 $ 39,592 $ 463,181 Amortization 13,975 51,115 - 9,732 74,822 Dispositions - (25,977) - - (25,977) Foreign exchange adjustment 5,173 12,465 - 2,685 20,323 Balance, March 31, 2025 $ 97,932 $ 233,658 $ 148,750 $ 52,009 $ 532,349 Amortization 10,098 26,045 - 7,264 43,407 Foreign exchange adjustment (4,511) (24,595) 1,954 (2,415) (29,567) Balance, December 31, 2025 $ 103,519 $ 235,108 $ 150,704 $ 56,858 $ 546,189 Net Book Value At March 31, 2025 $ 19,295 $ 105,566 $ - $ 11,857 $ 136,718 At December 31, 2025 $ 8,432 $ 75,137 $ - $ 4,134 $ 87,703 NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 10 During the year ended March 31, 2025, the Company exercised its purchase option on some of its leased production equipment and equipment with a net book value of $166,427 was transferred from right-of-use assets to property and equipment. (Note 9). There were no purchases or transfers of leased equipment to property and equipment during the nine months ended December 31, 2025. Amortization of equipment used in production is allocated to the cost of inventory and cost of sales. As at December 31, 2025, amortization of $1,347 was included in inventory (March 31, 2025 - $2,173). For the three and nine months ended December 31, 2025, amortization of $8,866 and $26,300, respectively, was allocated to cost of sales (for the three and nine months ended December 31, 2024 - $22,596 and $54,477, respectively). 9. Right-of-use Assets Equipment During the fifteen months ended March 31, 2023, the Company began leasing various production and manufacturing equipment. Prior to March 31, 2023, interim rent was incurred and paid on a monthly basis. These interim rent amounts were fully expensed in a total amount of USD $596,067 (CAD $781,746) during the fifteen months ended March 31, 2023. On March 31, 2023, the Company and lessor committed to the principal terms and conditions of the lease. Under the l --- ease agreement, the Company committed to paying a monthly rental fee of USD $3,700 (CAD $4,853) for four consecutive months beginning April 1, 2023 and thereafter paying a monthly fee of USD $38,756 (CAD $50,828) ending July 1, 2025. During the twelve months ended March 31, 2024, the Company returned certain production and manufacturing equipment and recognized a loss on lease modification $100,504, respectively (fifteen months ended March 31, 2023 - $nil). On July 1, 2024, the Company modified the lease agreement. Commencing on July 1, 2024, the Company committed to paying USD $150,000 for the first and second months of the lease term and USD $3,700 monthly thereafter until March 1, 2027. Upon paying the USD $300,000 due in the first two months, ownership over certain equipment under the lease would transfer to the Company. The Company made the payment of USD $300,000 and ownership over right of use assets with a net book value of USD $118,522 (CAD $ 163,230) was transferred (Note 8). As part of the modification, unpaid lease payments totalling USD $407,812 (CAD $561,647) were forgiven. Additional amounts due to the lessor of USD $110,996 (CAD $152,865) previously included in accounts payable and accrued liabilities was also forgiven. A gain of USD $518,808 (CAD $721,964) was recognized on the consolidated statement of comprehensive income for the year ended March 31, 2025 for the forgiveness of these unpaid amounts. During the twelve months ended March 31, 2024, the Company disposed of certain production and manufacturing equipment that was no longer in use. In connection with this disposal, an amount of USD $1,029 (CAD $1,477) was reclassified from right-of-use assets to property, plant and equipment. All proceeds from the disposal are payable to the lessor. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 11 Building During the twelve months ended December 31, 2020, the Company entered into a lease agreement for a building located at 7025 South Revere Parkway. The lease includes annual step-up payments which commenced January 1, 2021 and expires on June 30, 2031. In connection with this lease agreement, the Company paid a security deposit of USD $116,409 (CAD $148,340) in December 2020. The deposit was to be repaid to the Company at various milestone dates over the lease period so long as the Company remained in good terms with regard to all provisions of the lease agreement. On the commencement date of the lease, the deposit was discounted, using an incremental borrowing rate of 10% per annum, to reflect the long-term nature of the deposit. The amount of this discount was included in the cost of the right-of-use asset associated with the leased building. During the fifteen months ended March 31, 2023, repayments of the deposit to the Company did not occur as the Company fell behind on the lease payments required under the lease agreement. During the fifteen months ended March 31, 2023, the deposit was revalued to reflect the fact that repayment of the security deposit will not occur until the completion of the lease. This revaluation resulted in an adjustment to the fair value of the deposit of USD $43,678 (CAD $57,283) which was charged to the condensed consolidated interim statement of net and comprehensive income (loss). A reconciliation of the long-term deposit is as follows: At March 31, 2024 $ 76, --- 566 Interest income 8,148 Foreign exchange adjustment 4,952 At March 31, 2025 $ 89,666 Interest income 6,683 Foreign exchange adjustment (4,078) At December 31, 2025 $ 92,271 The Company’s right-of-use assets consists of a lease for equipment and a lease for a building. Right-of-use assets Equipment Building Total At March 31, 2024 $ 431,749 $ 1,862,953 $ 2,294,702 Purchase of equipment under lease (166,365) - (166,365) Impact of modification (68,223) - (68,223) Amortization expense (130,201) (264,097) (394,298) Foreign exchange adjustment 14,476 103,630 118,106 At March 31, 2025 $ 81,436 $ 1,702,486 $ 1,783,922 Amortization expense (30,746) (197,117) (227,863) Foreign exchange adjustment (3,352) (74,611) (77,963) At December 31, 2025 $ 47,338 $ 1,430,758 $ 1,478,096 A portion of the amortization of the equipment and building right-of-use assets are allocated to inventory and cost of sales. During the three and nine months ended December 31, 2025, amortization of $1,701 was removed from inventory as sales outpaced production during the period (March 31, 2025 – $476 was included in inventory, reflecting production exceeding sales at year-end). For the three and nine months ended December 31, 2025, amortization of $11,690 and $33,807 was allocated to cost of sales (for the three and nine months ended December 31, 2024 $28,163 and $180,592, respectively) NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 12 10. Lease Liabilities The lease liability associated with the lease agreement for various pieces of production and manufacturing equipment, the principal terms and conditions of which were committed to by the Company and lessor on March 31, 2024, has been calculated using a rate of 30% per annum. The lease liability associated with the building has been calculated using an incremental borrowing rate of 10% per annum. The Company’s lease liability related to the equipment and the building is as follows: Lease liability December 31, 2025 March 31, 2025 Current portion $ 317,831 $ 300,432 Long-term portion 1,799,941 2,137,958 Total lease liability $ 2,117,772 $ 2,438,390 Changes in lease liabilities are due to the following: Equipment Building Total At March 31, 2024 $ 1,079,791 2,399,083 3,478,874 Forgiveness of unpaid amounts (567,504) - (567,504) Impact of modification (68,223) - (68,223) Interest 77,158 237,491 314,649 Payments (448,369) (441,983) (890,352) Foreign exchange adjustment 33,230 137,716 170,946 At March 31, 2025 $ 106,083 2,332,307 2,438,390 Interest 12,399 163,048 175,447 Payments (51,240) (337,255) (388,495) Foreign exchange adjustment (4,378) (103,192) (107,570) At December 31, 2025 $ 62,864 $ 2,054,908 $ 2,117,772 The Company is committed to minimum lease payments as follows: Maturity analysis December 31, 2025 March 31, 2025 Less than one year $ 519,292 $ 538,590 One year to five years 1,985,588 2,081,776 More than five years 265,724 683,461 Total undiscounted lease liabilities 2,770,604 3,303,827 Less: interest (652,832) (865,437) Total lease liability $ 2,117,772 $ 2,438,390 11. Accounts Payables and Accrued Liabilities December 31, 2025 March 31, 2025 Trade payables $ 1,862,023 $ 2,149,926 Accrued liabilities 362,883 414,430 $ 2,224,906 $ 2,564,356 NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaud --- ited - Expressed in Canadian Dollars) 13 12. Loans Payable a) On May 16, 2020 (the “date of advance”), GFBS received a loan for gross proceeds of USD $150,000 (CAD $210,330) from the U.S. Small Business Administration under the Economic Injury Disaster Loan program. The loan bears annual interest at a rate of 3.75%. Monthly repayments of USD $731 (CAD $989) commenced 12 months from the date of advance and are applied first to interest and then to the loan principal. The loan matures 30 years from the date of advance. As this loan was granted at an interest rate below the market rate of interest, this loan is treated as a government grant. The loan was recognized at fair value using the Company’s estimated incremental borrowing rate of 10%. Effective March 17, 2021, the loan was amended to defer repayments by an additional 12 months. On October 2, 2024, the U.S. Small Business Administration under the Economic Injury Disaster Loan was paid off in its entirety, all principal and accrued interest outstanding, with a single lump sum payment of USD $172,572 (CAD $232,777) As at December 31, 2025, accrued interest of $nil (March 31, 2025 - $nil) is recorded in accounts payable and accrued liabilities. The loan is secured by all tangible and intangible property of GFBS as at the agreement date and any property acquired by GFBS after the agreement date. A reconciliation of the balance outstanding as at December 31, 2025 is as follows: Balance, March 31, 2024 $ 149,594 Accretion expense 902 Repayments (154,650) Foreign exchange adjustment 4,154 Balance, March 31, and December 31, 2025 $ - b) On September 15, 2020, GFBS, entered into a financing agreement for equipment purchased for USD $49,187 (CAD $62,679). The loan commenced on September 15, 2020, has an effective interest rate of 9.91%, and matured on August 15, 2024. The Company was required to make monthly payments of USD $1,215 (CAD $1,644) and the balance of the loan was due on maturity. A reconciliation of the balance outstanding as at December 31, 2025 is as follows: Balance, March 31, 2024 $ 7,770 Loan repayments (8,273) Interest 287 Foreign exchange adjustment 216 Balance, March 31, and December 31, 2025 $ - The loan was secured by the equipment purchased with the proceeds of the loan. c) On July 1, 2020, Nepra US entered into an unsecured revolving loan facility with a company controlled by the Company’s Chief Operating Officer and interim Chief Financial Officer for up to USD $200,000. The facility bore interest at 6% and the outstanding balance, if any, would have been due on or before December 31, 2025. On January 1, 2022, the facility was amended (the “First Amended Facility”) to increase the balance that could be borrowed under the facility up to USD $400,000. The First Amended Facility bore interest at 6% and the outstanding balance, if any, would have been due on or before NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 14 December 31, 2025. On September 5, 2022, the First Amended Facility was amended again (the “Second Amended Facility”), to increase the balance that could be borrowed under the facility up to USD $650,000. The Second Amended Facility bore interest at 6% and the outstanding balance, if any, would have been due on or before December 31, 2025. On January 1, 2024, the Second Amended Facility was amended (the “Third Amended Facility”) --- , to increase the balance that could be borrowed under the facility up to USD $900,000. The Third Amended Facility bears interest at 6% and the outstanding balance, if any, is due on or before December 31, 2025. During year ended March 31, 2025, in measuring the fair value of the facility in alignment with IFRS 9, Financial Instruments, the Company recognized an equity component of USD $10,509 (CAD $14,624) against the balance of the facility relating to the below market interest rate. The value of the equity component was determined by discounting the balance of the facility at a market rate of interest of 20%. During the nine months ended December 31, 2025, no equity component was recognized in relation to the revolving loan facility. As at December 31, 2025, USD $832,088.51 (CAD $1,140,561) was borrowed on the loan facility (March 31, 2025 – USD $832,089 (CAD $1,194,313)). A reconciliation of the balance outstanding as at December 31, 2025 is as follows: Balance, March 31, 2024 $ 830,509 Borrowings 75,841 Repayments - Equity portion of loans payable (14,624) Accretion expense 128,316 Foreign exchange adjustment 55,881 Total loan balance, March 31, 2025 $ 1,075,923 Accretion expense 114,229 Foreign exchange adjustment (49,592) Total loan balance, December 31, 2025 $ 1,140,560 Less current portion (1,140,560) Non-current balance, December 31, 2025 $ - As at December 31, 2025, total accrued interest of $116,207 (March 31, 2025 - $67,727) on the original and amended revolving loan facilities was recorded in accounts payable and accrued liabilities. During the three and nine months ended December 31, 2025, the Company incurred interest expense of $17,427 and $52,092 (three and nine months ended December 31, 2024 - of $23,004 and $55,916 respectively, relating to these revolving loan facilities. d) On April 12, 2023, Nepra US issued an unsecured promissory note in the principal amount of USD $100,000 (CAD $134,470). The note bears interest at 6% per annum and was repayable on or before December 31, 2023. On December 31, 2023, the Company entered into an agreement to extend the maturity date to December 31, 2025 (the “Amendment”). All the other terms of the unsecured promissory note remained the same. On the date of the Amendment, management determined that this was a non- substantial debt modification. No gain or loss on modification was recognized during the twelve months ended March 31, 2024 in connection with this modification. On November 1, 2025, the Company entered into a new unsecured promissory note with the same lender, which replaced the original note. Under the terms of the new note, the principal amount is USD $174,465 NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 15 (CAD $244,404), bearing interest at 12% per annum, and is repayable in 36 equal monthly instalments of USD $5,795 commencing November 1, 2025 and maturing on October 1, 2028. The new principal amount reflects the outstanding balance of the original loan (including accrued interest) together with additional amounts owing to the lender that were settled as part of the refinancing. The refinancing was accounted for as an extinguishment of the original financial liability and recognition of a new financial liability in accordance with IFRS 9. The difference between the carrying amount of the liabilities settled and the principal amount o --- f the new promissory note resulted in a loss on loan settlement of USD $19,590.93 (CAD $27,445), which was recognized in profit or loss during the period. A reconciliation of the balance outstanding at December 31, 2025 is as follows: Balance, March 31, 2024 $ 143,468 Principal amount - Interest 9,095 Foreign exchange adjustment 8,905 Total loan balance, March 31, 2025 161,468 Interest on the original promissory note 7,153 Additional balance transferred to new promissory note 53,153 Loss on refinancing 27,445 Interest on the new promissory note 4,776 Loan repayments (16,050) Foreign exchange adjustment (9,961) Total loan balance, December 31, 2025 227,984 Less current portion (71,822) Non-current balance, December 31, 2025 $ 156,162 e) From July 2023 to November 2023, Nepra US entered into several short-term lending agreements with WebBank under which Nepra US was loaned USD $116,296 (CAD $156,848). All loans under these agreements had a term of 12 months, an origination fee of 3% of the amount loaned, boar interest at 15% per annum and were repaid through monthly instalments. Amounts loaned under these agreements could be fully repaid at any time during the term without a prepayment penalty. A reconciliation of the balance outstanding at December 31, 2025 is as follows: Balance, March 31, 2024 $ 47,320 Loan repayments (48,897) Interest 262 Foreign exchange adjustment 1,315 Total loan balance, March 31, and December 31, 2025 - f) On June 13, 2024, Nepra US entered into a line of credit agreement with WebBank for up to USD $100,000. The line of credit bears interest of 0% for the first two months following the date the funds were disbursed. In the event the line of the credit is not repaid within two months, the outstanding borrowings bear interest at 15% per annum and are repaid through monthly instalments. An origination fee of 3% of the amount borrowed is incurred. Borrowings under the line of credit can be fully repaid at any time during the term without a prepayment penalty. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 16 A reconciliation of the balance outstanding as at December 31, 2025 is as follows: Balance, March 31, 2024 $ - Borrowings 64,859 Loan repayments (64,859) Total loan balance, March 31, and December 31, 2025 $ - g) From January to March 2024, Nepra US received loan proceeds of USD $600,000 (CAD $808,948) from an individual who was appointed Chief Executive Officer (the “CEO”) on August 9, 2024 (Note 14). In April 2024, Nepra US received additional loan proceeds of USD $350,000 (CAD $478,139). The loan bears interest at 6% per annum and was repayable on or before July 31, 2024. The loan is secured by a security interest in all assets of Nepra US. On July 15, 2024, the Company reached an agreement with the lender to convert all of the outstanding USD $950,000 principal amount of loan advances made, together with accrued and unpaid interest and all other amounts outstanding under the loan agreement, totaling USD $970,551 (CAD $1,335,111), into 26,445,572 common shares of the Company with a fair value of CAD $1,190,051 (Note 14). A reconciliation of the balance outstanding as at December 31, 2025 is as follows: Balance, March 31, 2023 $ - Principal amount 808,948 Interest 6,410 Foreign exchange adjustment 3,492 Total loan balance, March 31, 2024 818,850 Additions 487,054 Interest 21,983 S --- hares issued to settle debt (1,322,279) Foreign exchange adjustment (5,608) Total loan balance, March 31, and December 31 2025 $ - On July 15, 2024, as amended January 1, 2025, the Company entered into a revolving promissory note agreement with the same lender. The principal sum of the revolving promissory note USD $475,000 (CAD $661,002) and is due and payable on or before July 31, 2025. Interest shall accrue at an annual rate of 6%. In the event of default, interest on the entire outstanding principal balance shall accrue at an annual rate of 12% as of the date of the occurrence of default. Borrowings under this promissory note can be fully repaid at any time during the term without a prepayment penalty. Effective July 31, 2025, the Company entered into an agreement to amend the terms of its existing unsecured promissory note. Pursuant to the amendment (the “Amendment #2”), the loan is due and payable on or before March 31, 2026, and the maximum principal amount permitted to be withdrawn was increased to USD $525,000 (CAD $726,521). All other terms and conditions of the original promissory note remain unchanged. On the date of the Amendment #2, management determined that this was a non- substantial debt modification. There were no drawdowns under this revolving promissory note during the nine months ended December 31, 2025 (Nine months ended December 31, 2024 - USD$362,000 (CAD$495,854)). NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 17 A reconciliation of the balance outstanding as at December 31, 2025 is as follows: Balance, March 31, 2024 $ - Additions 628,996 Interest 21,453 Foreign exchange adjustment 20,443 Total loan balance, March 31, 2025 670,892 Additions - Interest 28,297 Foreign exchange adjustment (30,485) Total loan balance, December 31, 2025 668,704 Less current portion (668,704) Non-current balance, December 31, 2025 $ - h) On June 13, 2024, the Company entered into a loan for gross proceeds of USD $175,000 (CAD $233,093). The Company agreed to repay the lender a total of US$211,750 (CAD $289,274) by making weekly payments of US$5,434. The Company incurred an upfront fee of USD $4,375 for the closing of the agreement. The loan is secured against the Company’s accounts receivable. On November 18, 2024, the Company renewed its loan agreement, obtaining additional proceeds of USD $207,313 (CAD $285,515). Of this amount, USD $90,607 (CAD $130,215) was allocated to repay the original loan. Per the agreement, the Company will repay the lender a total of USD $246,000 (CAD $338,795) through weekly payments of USD $4,735. Additionally, the Company incurred an upfront fee of USD $5,000 for closing the renewal agreement. On June 12, 2025, the Company entered into a renewal financing agreement for gross proceeds of USD $170,000 (CAD $234,371). Under the terms of the agreement, the Company is required to remit a total of USD $209,440 (CAD $285,927) through fixed weekly payments of USD $4,398. A portion of the proceeds, USD $108,685 (CAD $148,377), was used to settle the remaining balance of the previous November 18, 2024 agreement. In connection with the renewal, the Company incurred an upfront closing fee of USD $5,525 (CAD $7,617), which was deducted from the proceeds received. The loan is secured against the Company’s receivables. The Company also entered into an Early Receivable Delivery Addendum --- which provides discounted settlement terms if repaid within 330 days of disbursement. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 18 A reconciliation of the balance outstanding at December 31, 2025 is as follows: Balance, March 31, 2024 $ - Principal amount 237,439 Additions 288,494 Loan repayments (417,643) Accretion 50,220 Foreign exchange adjustment 29,118 Total loan balance, March 31, 2025 $ 187,628 Additions 231,744 Loan repayments (386,626) Accretion 42,236 Foreign exchange adjustment (3,518) Gain on settlement of debt 23,417 Total loan balance, December 31, 2025 $ 94,881 Less current portion (94,881) Non-current balance, December 31, 2025 - i) On August 9, 2024, the Company entered into a Master Purchase Order Agreement. Under this agreement, the lender periodically acquires products from third-party vendors at the Company's request. The Company subsequently purchases these products from the lender to fulfill its Customer Purchase Orders (P.O.s). The balance in this account represents products in transit and is classified as a short-term loan payable, measured at face value. Upon invoicing the customer, the related Purchase Order (P.O.) financing is settled using funds from the accounts receivable factoring arrangement with the same lender. The Collateral for this loan consists of the Company's assets, pledged as security under the Agreement, free of liens except as permitted. Financing provided under this agreement is subject to a deal fee calculated as the greater of (a) 2.25% of the credit amount per PO, (b) 0.75% for each 10-day period the loan is outstanding and (c) $1,000. Fees are adjusted if partial payments are made to reduce the outstanding loan balance. A reconciliation of the balance outstanding as at December 31, 2025 is as follows: Balance, March 31, 2024 $ - Additions 2,082,515 Loan repayments (1,433,174) Foreign exchange adjustment 20,408 Total loan balance, March 31, 2025 $ $669,749 Additions 3,172,723 Loan repayments (3,486,708) Foreign exchange adjustment (22,957) Total loan balance, December 31, 2025 $ 332,807 Less current portion (332,807) Non-current balance, December 31, 2025 - NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 19 j) On February 27, 2025, Nepra Ltd. entered into a revenue purchase agreement whereby it sold a portion of its future revenue for proceeds of USD $130,000 (CAD $180,906). Under the terms of the agreement, the purchaser is entitled to receive total repayments of USD $171,600 (CAD $238,796), representing a discounted sale of future receivables. The arrangement does not constitute a borrowing and, accordingly, does not bear interest. Nepra Ltd. is required to make fixed weekly payments of USD $4,290 until the total purchased amount has been fully remitted. Balance, March 31, 2024 $ - Principal amount 180,906 Loan repayments (23,880) Accretion 4,968 Foreign exchange adjustment 5,092 Total loan balance, March 31, 2025 $ 167,086 Loan repayments (213,172) Accretion 52,492 Foreign exchange adjustment (6,406) Total loan balance, December 31, 2025 $ - Less current portion - Non-current balance, December 31, 2025 - 13. Warrant Liability On June 27, 2025, the Company issued 4,566,667 units as part of a non-brokered private placemen --- t. Each unit consisted of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share at an exercise price of USD $0.12 (CAD $0.16) per share until June 27, 2027. At initial recognition, the fair value of the warrants was determined to be USD $178,788 (CAD $244,237) using the Black-Scholes option pricing model. The remainder of the proceeds was allocated to common shares and recorded in share capital using the residual value method (Note 14). At December 31, 2025, the fair value of the warrants was estimated to be USD $218,823 (CAD $299,946) (March 31, 2025 – USD/CAD $Nil). The change in fair value of USD $40,036 (CAD $55,709) has been recognized as a gain in the condensed consolidated interim statement of net and comprehensive loss. The fair value of the warrants was determined using the Black-Scholes option pricing model with the following assumptions: December 31, 2025 Share price at valuation date $0.10 Exercise price $0.16 Expected volatility 178% Expected life (years) 1.49 Risk-free interest rate 2.58% Dividend yield 0.00% NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 20 On September 2, 2025, the Company issued 1,277,667 units as part of a non-brokered private placement. Each unit consisted of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share at an exercise price of USD $0.12 (CAD $0.17) per share until September 27, 2027. At initial recognition, the fair value of the warrants was determined to be USD $76,660 (CAD $105,587) using the Black-Scholes option pricing model. The remainder of the proceeds was allocated to common shares and recorded in share capital using the residual value method (Note 14). At December 31, 2025, the fair value of the warrants was estimated to be USD $61,165 (CAD $83,840) (March 31, 2025 – USD/CAD $Nil). The change in fair value of USD $(15,495) (CAD $21,747) has been recognized as a gain in the condensed consolidated interim statement of net and comprehensive loss. The fair value of the warrants was determined using the Black-Scholes option pricing model with the following assumptions: December 31, 2025 Share price at valuation date $0.10 Exercise price $0.17 Expected volatility 168% Expected life (years) 1.67 Risk-free interest rate 2.58% Dividend yield 0.00% On September 10, 2025, the Company issued 2,439,024 units as part of a non-brokered private placement. Each unit consisted of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share at an exercise price of USD $0.12 (CAD $0.17) per share until September 10, 2027. At initial recognition, the fair value of the warrants was determined to be USD $146,341 (CAD $202,737) using the Black-Scholes option pricing model. The remainder of the proceeds was allocated to common shares and recorded in share capital using the residual value method (Note 14). At December 31, 2025, the fair value of the warrants was estimated to be USD $116,617 (CAD $159,849) (March 31, 2025 – USD/CAD $nil). The change in fair value of USD $(29,724) (CAD $42,888) has been recognized as a gain in the condensed consolidated interim statement of net and comprehensive loss. The fair value of the warrants was determined using the Black-Scholes option pricing model with the --- following assumptions: December 31, 2025 Share price at valuation date $0.10 Exercise price $ 0.17 Expected volatility 167% Expected life (years) 1.69 Risk-free interest rate 2.58% Dividend yield 0.00% NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 21 The warrants are denominated in U.S. dollars, while the Company’s functional currency is the Canadian dollar. Under IAS 32, such instruments are not classified as equity and are instead recorded as derivative financial liabilities, measured at fair value through profit or loss. The warrant liability presented on the statement of financial position of CAD $554,447 includes issuance transaction costs of CAD $10,812 (USD $7,888) allocated to the warrant liability on initial recognition. 14. Share Capital and Reserves Authorized capital The Company is authorized to issue an unlimited number of common shares and an unlimited number of Class A common shares with no par value. Issued Capital During the nine months ended December 31, 2025: • On June 27, 2025, the Company issued 4,566,667 units as part of the first tranche of a non-brokered private placement at a price of US$0.06 (CAD $0.082) per unit for aggregate gross proceeds of USD $274,000 (CAD $374,303). Each unit consisted of one common share and one common share purchase warrant. Of the total proceeds, USD $95,212 (CAD $130,067) was allocated to share capital, with the remainder allocated to warrants (Note 13). • On September 2, 2025, the Company issued 1,277,667 units as part of the second tranche of a non- brokered private placement at a price of US$0.06 (CAD $0.083) per unit for aggregate gross proceeds of USD $76,660 (CAD $105,587). Each unit consisted of one common share and one common share purchase warrant. Of the total proceeds, USD $76,660 (CAD $105,587) was allocated to warrants (Note 13). • On September 10, 2025, the Company issued 2,439,024 units as part of the third tranche of a non- brokered private placement at a price of US$0.06 (CAD $0.083) per unit for aggregate gross proceeds of USD $146,341 (CAD $ 202,737). Each unit consisted of one common share and one common share purchase warrant. Of the total proceeds, USD $146,341 (CAD $202,737) was allocated to warrants (Note 13). • On September 19, 2025, the Company issued 400,000 common shares upon the exercise of 400,000 share purchase warrants at an exercise price of $0.10 per share, for total cash proceeds of $40,000. • On October 15, 2025, the Company issued 700,000 common shares pursuant to the exercise of warrants at an exercise price of $0.10 per share, for total cash proceeds of $70,000. • On December 12, 2025, the Company received $142,857 upon the exercise of 1,428,571 common share purchase warrants at an exercise price of $0.10 per share. As at December 31, 2025, the related common shares had not yet been issued and the proceeds were recorded as an obligation to issue common shares. During the nine months ended December 31, 2024: • On July 23, 2024, the Company issued 26,445,572 common shares with a fair value of $1,190,051 to settle debt with the CEO of $1,335,111. A gain on settlement of debt of $145,060 was recognized in relation to this share issuance (Note 12). • The Company did not incur any share-based payments expenses. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended D --- ecember 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 22 Stock Options Stock Option Plan The Stock Option Plan was adopted by the Company's Board of Directors on April 16, 2021. The aggregate number of common shares which are reserved for issuance under the Stock Option Plan may not exceed 11,789,310. The exercise price of any stock options granted under the Stock Option Plan shall be determined by the Compensation Committee of the Board but may not be less than the greater of the closing market price of the Company’s common shares on (a) the trading day prior to the date of grant of the stock options; and (b) the date of grant of the stock options. The term of any stock option under the Stock Option Plan shall be determined by the Compensation Committee of the Board but shall not exceed 10 years from the grant date. Vesting conditions of any stock options granted under the Stock Option Plan shall be determined by the Board at the time of grant. Stock Option Activity During the nine months ended December 31, 2025: • On October 15, 2025, the Company granted 500,000 incentive stock options to Matthew Bonner. The options vested at 100% on the grant date and have an exercise price of CAD $0.13 per share and expire on October 15, 2035. • The Company recognized $53,045 in share-based payment expense related to stock options during the period, which was recorded in profit or loss with a corresponding increase in reserves. During the nine months ended December 31, 2024: • 300,000 stock options with an exercise price of $0.47 were forfeited in accordance with the terms of the subscription agreement following the resignation of a director of the Company. • The Company did not incur share-based payments expenses relating to options in the statement of loss and comprehensive loss. A reconciliation of stock option activity from March 31, 2023 to December 31, 2025 is summarized in the following table: Number of Stock Options Weighted Average Exercise Price Balance, March 31, 2024 1,200,000 $0.47 Forfeited (300,000) $0.47 Balance, March 31, 2025 900,000 $0.47 Granted 500,000 0.13 Balance, December 31, 2025 1,400,000 $0.35 NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 23 Details of the options outstanding as at December 31, 2025, are as follows: Expiry date Number of Options Outstanding Number of Options Vested Exercise Price September 17, 2031 900,000 900,000 $0.47 October 15, 2035 500,000 500,000 $0.13 1,400,000 1,400,000 As of December 31, 2025, the weighted average remaining life of outstanding options is 7.17 years. Warrants During the nine months ended December 31, 2025: • On June 27, 2025, the Company issued 4,566,667 warrants in connection with a non-brokered private placement. Each warrant entitles the holder to purchase one common share at an exercise price of US$0.12 per share until June 27, 2027. The warrants were classified as derivative financial liabilities as they are denominated in U.S. dollars, which differs from the Company’s functional currency, and were initially recognized at fair value (Note 13). • On September 2, 2025, the Company issued 1,277,667 warrants in connection with a non-brokered private placement. Each warrant entitles the holder to purchase one common share at an exercise price of US$0.12 per share until June 27, 2027. The warrants were classified as derivative financi --- al liabilities as they are denominated in U.S. dollars, which differs from the Company’s functional currency, and were initially recognized at fair value (Note 13). • On September 10, 2025, the Company issued 2,439,024 warrants in connection with a non-brokered private placement. Each warrant entitles the holder to purchase one common share at an exercise price of US$0.12 per share until June 27, 2027. The warrants were classified as derivative financial liabilities as they are denominated in U.S. dollars, which differs from the Company’s functional currency, and were initially recognized at fair value (Note 13). • During the period ended December 31, 2025, 1,100,000 warrants were exercised for gross cash proceeds of $110,000 (at $0.10 per warrant). • During the period ended December 31, 2025, 11,101,100 warrants expired. During the nine months ended December 31, 2024: • No warrants were issued or expired during the nine months ended December 31, 2024. A reconciliation of warrant activity from March 31, 2023 to December 31, 2025 below: Number of Warrants Weighted Average Exercise Price Balance, March 31, 2024 11,521,149 $0.27 Expired (10,641,760) $0.70 Balance, March 31, 2025 25,915,860 $0.10 Granted 8,283,358 $0.16 Exercised (1,100,000) $0.10 Expired (11,101,100) $0.10 Balance, December 31, 2025 21,998,118 $0.11 NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 24 Details of the warrants outstanding as at December 31, 2025 are as follows: Expiry date Number of Warrants Exercise Price January 31, 2026 (*) 13,714,760 $0.10 June 27, 2027 4,566,667 $0.16 September 2, 2027 1,277,667 $0.17 September 10, 2027 2,439,024 $0.17 21,998,118 $0.12 (*) Subsequent to December 31, 2025, a total of 5,242,857 warrants were exercised, and the remaining warrants expired unexercised (Note 21). As of December 31, 2025, the weighted average remaining life for outstanding warrants was 0.65 years. 15. Related Parties The Company defines its related parties as its key members of management, companies controlled by its key members of management, and family members of its key members of management. Key members of management consist of the Directors and Officers who are responsible for planning, directing, and controlling the activities of the Company. • On August 9, 2024, a new CEO was appointed, and the former CEO was appointed as Chief Visionary Officer (“CVO”). • On October 4, 2024, Tim Hogan and Andrew Contiguglia were appointed as independent directors of the Company. • On March 12, 2025, Mark Retzloff was appointed as Chairman of the board. a) Related party balances As at December 31, 2025, accounts payable and accrued liabilities include $893 (March 31, 2025 – $Nil) owed to the Chief Executive Officer (“CEO”). The amount represents unpaid salary and is unsecured, non- interest bearing and due on demand. As at December 31, 2025, accounts payable and accrued liabilities include $893 (March 31, 2025 – $Nil) owed to a family member of the CEO and to a Director of the Company. The amount represents unpaid salary and is unsecured, non-interest bearing and due on demand. As at December 31, 2025, included in due from related parties is $593 (March 31, 2025 - $621) due from the Chief Visionary Officer (“CVO”), Director, and former CEO of the Company. The amount is unsecured, non- interest bearing and due on demand. As at December 31, 202 --- 5, included in accounts payable and accrued liabilities is $59,757 (March 31, 2025 - $61,492) due to the CVO, Director, and former CEO of the Company. The amount consists of expenses charged to a credit card and is unsecured, non-interest bearing and due on demand. As at December 31, 2025, also included in accounts payable and accrued liabilities is $1,858 (March 31, 2025 - $3,312) owed to the CVO, Director, and former CEO. This amount consists of salary owed and is unsecured, non-interest bearing and due on demand. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 25 As at December 31, 2025, included in accounts payable and accrued liabilities is $15,874 (March 31, 2025 - $16,623) due to a company controlled by the COO (former CEO), Director of the Company, interim CFO, and interim Corporate Secretary. The amount consists of expense reimbursements and is unsecured, non- interest bearing, and due on demand. As at December 31, 2025, also included in accounts payable and accrued liabilities is $116,273 (March 31, 2025 - $67,727) owed to the same company. The amount consists of interest payable on a revolving loan facility (Note 12). As at December 31, 2025, included in accounts payable and accrued liabilities is $90,271 (March 31, 2025 - $96,842) due to the COO and interim CFO. The amount consists of expenses charged to a credit card and is unsecured, non-interest bearing and due on demand. As at December 31, 2025, also included in accounts payable and accrued liabilities is $91,853 (March 31, 2025 - $11,714) due to the COO and interim CFO. This amount consists of expense reimbursements and is unsecured, non-interest bearing and due on demand. As at December 31, 2025, included in accounts payable and accrued liabilities is $36,238 (March 31, 2025 - $37,946) due to the Chief Engineer of the Company. The amount consists of salary owed and is unsecured, non-interest bearing and due on demand. As at December 31, 2025, also included in accounts payable and accrued liabilities is $12,500 (March 31, 2025 - $13,089) owed to the Chief Engineer. This amount consists of expense reimbursements and is unsecured, non-interest bearing and due on demand. As at December 31, 2025, included in accounts payable and accrued liabilities is $7,064 (March 31, 2025 - $9,206) due to the family members of the CVO, Director, and former CEO of the Company. The amount consists of salary owed and is unsecured, non-interest bearing and due on demand. As at December 31, 2025, also included in accounts payable and accrued liabilities is $2,439 (March 31, 2025 - $2,880) due to the family members of the COO (former CEO), Director of the Company, interim CFO and interim Corporate Secretary. The amount consists of salary owed and is unsecured, non-interest bearing and due on demand. As at December 31, 2025, included in accounts payable and accrued liabilities is $Nil (March 31, 2025 - $1,148) due to the former Director of Research and Development and Director of the Company. b) Related party transactions The Company incurred charges with key members of management during the nine months ended December 31, 2025 and 2024: For the Nine Months Ended December 31, 2025 2024 Salaries and benefits $ 429,151 $ 436,313 Professional fees 13,849 - $ 443,000 $ 436,313 For the Three Months Ended December 31, 2025 2024 Salaries and benefits $ 178,643 $ 116,377 Pro --- fessional fees - - $ 178,643 $ 116,377 NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 26 c) Loans payable During the year ended March 31, 2024, the Company remained a party to an unsecured revolving loan facility with a company controlled by the COO (former CEO), Director of the Company, interim CFO and interim Corporate Secretary. See Note 12, item c) for additional disclosure relating to these facilities. During the year ended March 31, 2024, the Company became a party to an unsecured revolving promissory note with the CEO of the Company. See Note 12, item g) for additional disclosure relating to these facilities. 16. General and Administrative For the nine months ended For the three months ended December 31, December 31, 2025 2024 2025 2024 Advertising and promotion $ 5,403 $ 51,887 $ 1,521 $ 3,173 Insurance 10,570 59,066 3,497 20,677 Meals and entertainment 54,371 1,553 9,628 13 Office expenses 4,682 119,089 3,439 39,343 Other rent 71,929 232,985 89,621 80,630 Equipment rent 252,030 15,130 9,526 5,332 Repairs and maintenance 4,693 17,342 422 10,931 Shareholder communication 63,605 29,248 8,519 20,005 Subscriptions and dues 24,712 77,040 (2,554) 5,227 Utilities 26,588 31,129 9,186 11,447 Total $ 518,583 $ 634,469 $ 132,805 $ 196,778 17. Supplemental Disclosure with Respect to Cash Flows For the nine months ended December 31, 2025 For the nine months ended December 31, 2024 Interest paid $ 308,944 $ 350,480 Equipment purchases included in accounts payable and accrued liabilities - 4,087 Overdue lease payments - 5,317 Non-cash reclassification of accounts payable to loans payable 53,153 - 18. Capital Risk Management The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue operations as well as to ensure that the Company is able to meet its financial obligations as they become due. As at December 31, 2025, the Company’s capital structure consists of loans payable, share capital, and deficit. The basis for the Company’s capital structure is dependent on the Company’s expected business growth and changes in the business environment. To maintain or adjust the capital structure, the Company may issue new shares through private placements or incur debt. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 27 The Company believes it will be able to raise capital as required in the long term but recognizes there will be risks involved that may be beyond its control. There are no external restrictions on the management of the Company’s capital. The Company does not presently utilize any quantitative measures to monitor its capital but relies on the expertise of the Company’s management to sustain the future development of the business. Management reviews its capital management approach on an ongoing basis. There was no change to the Company’s approach to capital management during the nine months ended December 31, 2025. 19. Financial Instruments and Risk Management Through its operations, the Company is exposed to the following risks: a) Market Risk b) Credit Risk c) Liquidity Risk In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. This note des --- cribes the Company’s objectives, policies, and processes for managing those risks and the methods used to measure them. Quantitative information in respect to these risks is presented further in this note. There have been no substantive changes in the Company’s exposure to financial instrument risks, its objectives, polices and processes for managing those risks or the methods used to measure those risks from previous reported periods unless otherwise stated in this note. The overall objective of the Directors and Officers is to set policies that seek to reduce risk as much as possible without unduly affecting the Company’s competitiveness and flexibility. Further details regarding these policies are set out below. a) Market Risk Market risk is the risk of loss that may arise from changes in market factors such as foreign currency exchange, interest rates, and equity price risk. (i) Foreign Currency Risk: A portion of the assets and liabilities held by the Company and its subsidiaries are denominated in currencies other than the functional currencies of the Company and its subsidiaries. This results in some exposure to foreign currency risk. All of the Company’s assets and liabilities are denominated in either Canadian Dollars or United States Dollars. Assuming all other variables remain constant, a 5% weakening or strengthening of the Canadian Dollar against the United States Dollar would result in an approximate $30,504 foreign exchange gain or loss in the consolidated statement of comprehensive loss as at December 31, 2025. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 28 (ii) Interest Rate Risk: Interest rate risk is the risk that future cash flows will fluctuate because of changes in market interest rates. The interest earned on cash and restricted cash is insignificant, and the Company does not rely on interest to fund its operations. The Company’s outstanding loans payable bear interest at fixed rates. As a result, at December 31, 2025, management believes that the Company is not exposed to any significant interest rate risk. b) Credit Risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company’s cash and restricted cash, due from related party and accounts receivable are exposed to credit risk. The Company limits its exposure to credit loss on cash by placing its cash with high-quality financial institutions. The Company has concentrations of credit risk with respect to accounts receivable as large amounts of its accounts receivable are concentrated amongst a small number of customers. The Company performs credit evaluations of its customers but generally does not require collateral to support accounts receivable. The Company has certain amounts of aged receivables that are not deemed impaired as follows: December 31, 2025 March 31, 2025 1 - 60 days $ 507,572 $ 760,396 61 - 90 days (past due) 160 - Over 90 days (past due) 100,262 111,795 Provision for expected credit losses (over 90 days) (108,871) (114,002) Total $ 499,123 $ 758,189 The Company is exposed to increased credit risk due to major customers that comprise 10% or more of revenue. For the nine months ended December 31, 2025 and 2024, the following revenue was recorded from major customers: For the nine months ended December 31, Fo --- r the three months ended December 31, 2025 2024 2025 2024 Customer A $ 2,876,622 $ 1,872,034 $ 1,254,503 $ 631,351 Customer B 913,863 482,517 329,900 46,253 Customer C $ 615,013 $ 602,029 $ 262,268 $ 298,388 NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 29 c) Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash. Historically, the Company's sources of funding have been through equity financings, related party loans and convertible notes. The Company’s access to financing is uncertain. There can be no assurance of continued access to significant debt or equity funding. The following table displays the Company’s aging discounted obligations: Within one year Between one and five years More than five years Accounts payable and accrued liabilities $ 2,224,906 $ - $ - Accounts receivable factoring facility 266,091 Loans payable 2,303,765 156,162 - Lease liability 317,831 1,541,798 258,143 Total $ 5,112,593 $ 1,697,960 $ 258,143 d) Basis of Fair Value FINANCIAL ASSETS Level December 31, 2025 March 31, 2025 FVTPL Cash 1 $ 24,923 $ 44,737 Other assets, at amortized cost Accounts receivable 2 527,809 789,504 Due from related parties 2 593 621 Total financial assets $ 553,325 $ 834,862 FINANCIAL LIABILITIES Level December 31, 2025 March 31, 2025 Other liabilities, at amortized cost Accounts payable and accrued liabilities 2 2,224,906 2,564,356 Factoring facility 2 266,091 185,831 Loans payable 2 2,459,927 2,932,747 Derivative financial liabilities, at FVTPL Warrant liability 3 554,447 - Total financial liabilities $ 5,505,371 $ 5,682,934 NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 30 Financial instruments that are measured subsequent to initial recognition at fair value are grouped in Levels 1 to 3 based on the degree to which the fair value is observable: - Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities, - Level 2 fair value measurements are those derived from inputs other than quoted prices included within 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 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Company uses judgment to select the methods used to make certain assumptions and in performing the fair value calculations in order to determine (a) the values attributed to each component of a transaction at the time of issuance, (b) the fair value measurements for certain instruments that require subsequent measurement at fair value on a recurring basis, and (c) for disclosing the fair value of financial instruments subsequently carried at --- amortized cost. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of instruments that are not quoted in an active market. Loans payable are measured at amortized cost. Upon recognition, the fair values of the loans are estimated by discounting cash flows using interest rates of debt instruments with similar terms, maturities, and risk profile. The carrying value of the Company’s financial instruments approximate their fair values due to their short- term maturities. Cash and restricted cash are measured at fair value on a recurring basis. 20. Segmented Reporting The Company operates in one reportable operating segment, being the production and sale of food ingredients and products. All of the Company’s non-current assets are located in the United States and all of the Company’s long-term liabilities were incurred in the United States. 21. Subsequent Events On January 1, 2026, the Third Amended Facility (Note 12 (c)) was amended and restated (the “Amended and Restated Facility”) to extend the maturity date to a 24-month term with a balloon payment structure and to fix the principal amount with no further advances permitted. Under the Amended and Restated Facility, the outstanding principal balance as at January 1, 2026, together with all accrued and unpaid interest, is due and payable in a single balloon payment on or before December 31, 2027. The Amended and Restated Facility bears interest at 6% per annum, payable at maturity, and may be prepaid in whole or in part without penalty. The Amended and Restated Facility also requires the Company to maintain a life insurance policy on the life of the principal owner of the lender, with coverage at least equal to the then-outstanding principal amount plus accrued and unpaid interest, and to provide a collateral assignment of the policy as additional security. On January 30, 2026, a director and officer of the Company transferred 4,742,857 common share purchase warrants of the Company to third parties for nominal consideration. All remaining common share purchase warrants held by such individual expired unexercised on January 31, 2026. NEPRA FOODS INC. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) 31 On February 11, 2026, the Company entered into an agreement with a director and officer of the Company to convert all outstanding indebtedness under a revolving promissory note agreement (Note 12 (g)), including principal and accrued interest, totaling USD$487,849 (CAD 668,704), into common shares of the Company at a conversion price of CAD$0.10 per common share. As a result, 6,969,273 common shares will be issued in full settlement of the debt. On February 10, 2026, the Company issued 5,242,857 common shares pursuant to the exercise of warrants.