SEDAR Interim Financial Statements

TOTAL TELCOM INC. Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025 (Unaudited) Notice to Reader The following condensed interim consolidated financial statements and notes have not been reviewed by the Company’s auditors but have been reviewed and approved by the Company’s Audit Committee and Board of Directors. TABLE OF CONTENTS PAGE Condensed Interim Consolidated Balance Sheets 1 Condensed Interim Consolidated Statements of Income and Comprehensive Income 2 Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity 3 Condensed Interim Consolidated Statements of Cash Flows 4 Notes to the Condensed Interim Consolidated Financial Statements 5 - 12 TOTAL TELCOM INC. Condensed Interim Consolidated Balance Sheets December 31, June 30, 2025 2025 (unaudited) (audited) ASSETS CURRENT Cash and cash equivalents 1,098,253 $ 879,328 $ Term deposits 2,310,925 2,334,264 Trade and other receivables 364,510 305,442 Inventories 253,282 281,017 Prepaid expenses 26,082 12,612 4,053,052 3,812,663 RACE MANAGEMENT EQUIPMENT (Note 4) 95,989 114,640 PRODUCT DEVELOPMENT (Note 5) 1,416,564 1,385,264 PROPERTY, PLANT AND EQUIPMENT (Note 6) 2,317 2,897 RIGHT OF USE ASSET (Note 7) 284,962 324,372 DEFERRED INCOME TAX ASSET 76,000 153,000 5,928,884 $ 5,792,836 $ LIABILITIES CURRENT Trade and other payables 146,654 $ 173,381 $ Deferred revenue 12,523 21,770 Current portion of lease liabilities (Note 8) 75,987 71,523 235,164 266,674 LEASE LIABILITIES (Note 8) 224,906 264,364 460,070 531,038 SHAREHOLDERS' EQUITY Share capital 2,273,498 2,273,498 Contributed surplus 172,870 172,870 Retained earnings 3,022,446 2,815,430 5,468,814 5,261,798 5,928,884 $ 5,792,836 $ 1 TOTAL TELCOM INC. Condensed Interim Consolidated Statements of Income and Comprehensive Income Unaudited 2025 2024 2025 2024 SALES 711,411 $ 444,063 $ 1,233,331 $ 927,819 COST OF SALES (Note 4) 271,595 184,857 487,222 381,153 GROSS PROFIT 439,816 259,206 746,109 546,666 GENERAL AND ADMINISTRATIVE EXPENSES 201,870 218,705 369,092 371,194 INTEREST ON LEASE LIABILITIES (Note 8) 5,075 6,406 10,529 13,132 AMORTIZATION OF RIGHT OF USE ASSETS (Note 7) 19,705 20,621 39,410 41,243 AMORTIZATION OF PRODUCT DEVELOPMENT COSTS (Note 5) 46,194 54,399 90,873 105,895 DEPRECIATION (Note 6) 290 483 580 966 273,134 300,614 510,484 532,430 INCOME (LOSS) FROM OPERATIONS 166,682 (41,408) 235,625 14,236 OTHER ITEMS Finance income 24,001 27,132 49,617 58,746 Foreign exchange gains (losses) (25,278) 65,180 (1,226) 65,220 (1,277) 92,312 48,391 123,966 INCOME BEFORE INCOME TAXES 165,405 50,904 284,016 138,202 PROVISION FOR DEFERRED INCOME TAXES 45,000 13,000 77,000 37,000 NET INCOME AND COMPREHENSIVE INCOME 120,405 $ 37,904 $ 207,016 $ 101,202 $ EARNINGS PER SHARE Basic 0.005 $ 0.001 $ 0.008 $ 0.003 $ Diluted 0.005 $ 0.001 $ 0.008 $ 0.003 $ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 26,423,015 26,423,015 26,423,015 26,423,015 Three months ended December 31 Six months ended December 31 2 TOTAL TELCOM INC. Condensed Interim Consolidated Statement of Changes in Shareholders' Equity Unaudited Number of shares Share Capital Contributed Surplus Retained Earnings Total Shareholders' Equity Balance at June 30, 2025 26,423,015 2,273,498 $ 172,870 $ 2,815,430 $ 5,261,798 $ Net income for the six months ended December 31, 2025 - - - 207,016 207,016 26,423,015 2,273,498 $ 172,870 $ 3,022,446 $ 5,468,814 $ Number of shares Share Capital Contributed Surplus Retained Ear --- nings (Deficit) Total Shareholders' Equity Balance at June 30, 2024 26,423,015 2,273,498 $ 160,245 $ 2,457,688 $ 4,891,431 $ Share-based compensation related to stock options granted and vested - - 28,600 - 28,600 Net income for the six months ended December 31, 2024 - - - 101,202 101,202 26,423,015 2,273,498 $ 188,845 $ 2,558,890 $ 5,021,233 $ 2024 Balance at December 31, 2024 2025 Balance at December 31 2025 3 TOTAL TELCOM INC. Condensed Interim Consolidated Statements of Cash Flows Unaudited 2025 2024 2025 2024 NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES OPERATING Net income for the period 120,405 $ 37,904 $ 207,016 $ 101,202 $ Items not affecting cash: Deferred income tax expense 45,000 13,000 77,000 37,000 Foreign Exchange loss (gain) 25,278 (65,180) 1,226 (65,220) Amortization of product development costs 46,194 54,399 90,873 105,895 Amortization of right of use asset 19,705 20,621 39,410 41,243 Amortization of race management equipment 9,343 6,075 18,716 12,150 Gain on disposal of race management equipment - - (1,016) - Depreciation of equipment 290 483 580 966 Share-based compensation - 28,600 - 28,600 266,215 95,902 433,805 261,836 Net change in non-cash working capital (87,975) 122,243 (80,777) 52,472 CASH PROVIDED BY OPERATING ACTIVITIES 178,240 218,145 353,028 314,308 FINANCING Lease liability principal payments (17,544) (17,739) (34,994) (35,116) INVESTING Product development costs (60,579) (60,051) (122,173) (120,907) Purchase of term deposits (9,198) (75,582) (26,006) (86,927) Proceeds received from term deposits 49,345 - 49,345 - Proceeds on disposal of race management equipment - - 1,355 - Purchase of race management equipment - - (404) - CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (20,432) (135,633) (97,883) (207,834) NET FOREIGN EXCHANGE DIFFERENCE ON CASH (25,278) 65,180 (1,226) 65,220 Net increase (decrease) in cash and cash equivalents 114,986 129,953 218,925 136,578 CASH, BEGINNING OF PERIOD 983,267 849,209 879,328 842,584 CASH, END OF PERIOD 1,098,253 $ 979,162 $ 1,098,253 $ 979,162 $ SUPPLEMENTAL CASH FLOW INFORMATION Interest received 24,001 $ 27,132 $ 49,617 $ 58,746 $ Interest paid on lease liability 5,075 $ 6,406 $ 10,529 $ 13,132 $ Three months ended Six months ended December 31 December 31 4 TOTAL TELCOM INC. Notes to the Condensed Interim Consolidated Financial Statements December 31, 2025 Unaudited 5 1. NATURE OF OPERATIONS Total Telcom Inc. (the “Company”), through its wholly owned subsidiary ROM Communications Inc. is a developer and provider of remote asset monitoring and tracking products and services primarily in North America. The Company is incorporated under the Business Corporations Act of Alberta. The Company’s head office is located at #540, 1632 Dickson Avenue, Kelowna, British Columbia V1Y 7T2. The Company’s common shares are traded on the TSX Venture Exchange under the symbol TTZ. 2. BASIS OF PRESENTATION These financial statements for the six months ended December 31, 2025 have been prepared in accordance with International Financial Accounting Standard (“IAS”) 34 Interim Financial Reporting on a basis consistent with the accounting policies disclosed in the Company’s annual audited consolidated financial statements for the fiscal year ended June 30, 2025. Certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accoun --- ting Standards Board (“IASB”) have been omitted or condensed. These financial statements should be read in conjunction with the annual audited consolidated financial statements for the year ended June 30, 2025. These condensed consolidated interim financial statements include the accounts of Total Telcom Inc. and its wholly owned subsidiary ROM Communications Inc. All intercompany balances and transactions have been eliminated. These financial statements have been prepared on the historical cost basis except for cash and cash equivalents, long term debt and share-based payment arrangements that have been measured at fair value. All amounts are reported in Canadian dollars. These financial statements were approved and authorized for issue by the Board of Directors on February 27, 2026. TOTAL TELCOM INC. Notes to the Condensed Interim Consolidated Financial Statements December 31, 2025 Unaudited 6 3. SIGNIFICANT ACCOUNTING POLICIES The preparation of interim financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended June 30, 2025. 4. RACE MANAGEMENT EQUIPMENT Cost of sales includes $9,343 (2024 - $6,075) and $18,716 (2024 - $12,150) for amortization of race management equipment and $nil (2024 - $nil) and $1,016 (2024 - $nil) gain on disposal of race management equipment for the three and six months ended December 31, 2025. Race Management Equipment Cost or deemed cost Balance at June 30, 2025 $ 406,852 Additions 404 Disposals (3,897) Balance at December 31, 2025 $ 403,359 Depreciation and impairment losses Balance at June 30, 2025 $ 292,212 Amortization 18,716 Disposals (3,558) Balance at December 31, 2025 $ 307,370 Carrying amounts At June 30, 2025 $ 114,640 At December 31, 2025 $ 95,989 TOTAL TELCOM INC. Notes to the Condensed Interim Consolidated Financial Statements December 31, 2025 Unaudited 7 5. PRODUCT DEVELOPMENT 6. PROPERTY, PLANT AND EQUIPMENT Product Development Costs Cost or deemed cost Balance at June 30, 2025 $ 2,117,558 Additions 122,173 Disposals - Balance at December 31, 2025 2,239,731 Depreciation and impairment losses Balance at June 30, 2025 732,294 Amortization 90,873 Disposals - Balance at December 31, 2025 823,167 Carrying amounts At June 30, 2025 $ 1,385,264 At December 31, 2025 $ 1,416,564 Computer equipment Equipment and furniture Leasehold improvements Total Cost or deemed cost Balance at June 30, 2025 $ 68,943 $ 42,707 $ 35,000 $ 146,650 Additions - - - - Balance at December 31, 2025 $ 68,943 $ 42,707 $ 35,000 $ 146,650 Depreciation and impairment losses Balance at June 30, 2025 $ 68,943 $ 39,810 $ 35,000 $ 143,753 Depreciation - 580 - 580 Balance at December 31, 2025 $ 68,943 $ 40,390 $ 35,000 $ 144,333 Carrying amounts At June 30, 2025 $ - $ 2,897 $ - $ 2,897 Balance at December 31, 2025 $ - $ 2,317 $ - $ 2,317 TOTAL TELCOM INC. Notes to the Condensed Interim Consolidated Financial Statements December 31, 2025 Unaudited 8 7. RIGHT OF USE ASSET Right Of Use Asset Cost or deemed cost Balance at June 30, 2025 $ 404,736 Additions --- - Disposals - Balance at December 31, 2025 $ 404,736 Depreciation and impairment losses Balance at June 30, 2025 $ 80,364 Amortization 39,410 Disposals - Balance at December 31, 2025 $ 119,774 Carrying amounts At June 30, 2025 $ 324,372 At December 31, 2025 $ 284,962 TOTAL TELCOM INC. Notes to the Condensed Interim Consolidated Financial Statements December 31, 2025 Unaudited 9 8. LEASE LIABILITIES The lease liabilites include a lease for occupied premises requiring monthly payments totaling $6,973 including interest at the Company's incremental borrowing rate of 7.2% per annum until May 2026 and $7,262 per month from June 2026 to May 2029, and a lease for a vehicle requiring bi-weekly payments totaling $283 including interestat 1.99% per annum until March 2028 and a final payment of $24,010 in April 2028. Lease Liabilities Balance at June 30, 2025 $ 335,887 Repayments (45,523) Interest 10,529 Balance at December 31, 2025 300,893 Less Current Portion (75,987) Lease Liability - long term portion $ 224,906 The future minimum payments required under these leases are as follows: Principal Interest Total 2026 $ 75,987 $ 17,081 $ 93,068 2027 82,532 11,981 94,513 2028 106,707 5,906 112,613 2029 35,667 643 36,310 $ 300,893 $ 35,611 $ 336,504 TOTAL TELCOM INC. Notes to the Condensed Interim Consolidated Financial Statements December 31, 2025 Unaudited 10 9. SHARE-BASED COMPENSATION Under the Total Telcom Inc. Employee Stock Option Plan, options to purchase common shares of the Company may be granted to key employees, independent contractors and directors of the Company that entitle the holder to purchase one common share at a subscription price of not less than 100% of the market value on the effective date of the grant. The holder has the right to exercise the options immediately after issue, but the resulting shares cannot be traded until four months after the date the options were granted. Options expire five years after being issued or 90 days after an employee ceases employment with the Company. The Board of Directors has the discretion to extend the expiration period on cessation of employment. The maximum number of common shares authorized for issuance by the Board of Directors under the plan is limited to 10% of the total issued and outstanding common shares of the Company. Under the Employee Stock Option Plan, certain key employees and directors have the following options to purchase common shares: (a) 100,000 common shares at $0.15 per share – options expire May 31, 2026; (b) 400,000 common shares at $0.15 per share – options expire December 30, 2026; (c) 200,000 common shares at $0.30 per share – options expire May 31, 2028; (d) 215,000 common shares at $0.34 per share – options expire June 30, 2028; and (e) 200,000 common shares at $0.25 per share – options expire December 26, 2029 The average remaining contracted life of outstanding stock options is 2.03 years. The following stock options were outstanding as at December 31, 2025: At December 31, 2025, all stock options were exercisable. The fair value of any stock options granted to directors, officers, employees and independent contractors is recorded in general and administrative expenses over the vesting period with the offset recorded to contributed surplus. During the three and six months ended December 31, 2025, the Company issued nil (2024 – 200,000) and nil (2024 – 200,000) stock options. These options were valued at $nil (2024 - $28,600) using Black-Scholes Option pricing m --- odel. This share based compensation is included in general and administrative expenses with an offset to contributed surplus. Weighted Number of average Share options outstanding options exercise price Balance at June 30, 2025 1,115,000 0.23 $ Exercised - - $ Granted - - $ Balance, December 31, 2025 1,115,000 0.23 $ TOTAL TELCOM INC. Notes to the Condensed Interim Consolidated Financial Statements December 31, 2025 Unaudited 11 9. SHARE-BASED COMPENSATION (CONTINUED) Inputs for measurement of grant date fair values The following inputs were used in the measurement of the fair value at grant date of the share based compensation plan: 10. RELATED PARTY TRANSACTIONS Transactions with related parties General and administrative expenses for the three and six months ended December 31, 2025 include $10,500 (2024 - $7,500) and $21,000 (2024 - $15,000) respectively in management fees payable to a company controlled by a director. Key management personnel compensation Aggregate compensation to the directors and key management personnel of the Company during the period was as follows: Salaries and short-term employee benefits consist of salaries, bonuses, directors’ fees, and all other short-term monetary and non-monetary benefits. Share-based payment benefits consist of the fair value of share-option awards expensed in the period. Share-based compensation totaling $nil (2024 - $28,600) and $nil (2024 - $28,600) was paid to a director during the three and six months ended December 31, 2025 respectively. No long-term, post-employment or termination benefits were recognized in the three or six months ended December 31, 2025 or 2024. 2025 2024 Fair value of share options and assumptions Share price at grant date n/a 0.22 Exercise price n/a 0.25 Expected volatility n/a 81% Option life n/a 5 years Expected dividends n/a 0% Risk-free interest rate n/a 3.9% 2025 2024 2025 2024 Salareies and short-term employee benefits $ 45,600 $ 33,000 $ 91,200 $ 66,000 Management fees 10,500 7,500 21,000 15,000 Director fees 3,750 3,750 7,500 7,500 Share-based compensation - 28,600 - 28,600 $ 59,850 $ 72,850 $ 119,700 $ 117,100 Three months ended December 31, Six months December 31,