SEDAR Interim Financial Statements

FRNT Financial Inc. CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended December 31, 2025 and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) Notice to Reader Under National Instrument 51-102 Continuous Disclosure Obligations, if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim consolidated financial statements have been prepared by management and were not reviewed by FRNT Financial Inc.’s independent auditor. - 1 - FRNT Financial Inc. Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) December 31, June 30, Notes 2025 2025 ASSETS Current assets Cash $ 202,773 $ 399,519 Trade and other receivables 5 188,150 180,565 Prepaid expenses and deposits 6 92,934 66,945 Investments 7 2,091,876 1,979,437 Digital assets – Bitcoin 9 531,459 - 3,107,192 2,626,466 Deposits 6 27,933 - Investments 7 137,480 229,676 Equipment 8 7,589 10,206 Right-of-use asset 10 291,252 33,626 Total assets $ 3,571,446 $ 2,899,974 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable and accrued liabilities 14 $ 240,911 $ 334,826 Lease liability 11 61,566 23,096 302,477 357,922 Lease liability 11 243,948 - Total liabilities 546,425 357,922 SHAREHOLDERS’ EQUITY Share capital 12(a) 13,440,402 11,565,336 Stock option reserve 12(b) 4,010,895 3,931,154 Warrant reserve 12(c) 301,975 284,858 Accumulated other comprehensive income 373 1,010 Accumulated deficit (14,728,624) (13,240,306) Total shareholders’ equity 3,025,021 2,542,052 Total liabilities and shareholders’ equity $ 3,571,446 $ 2,899,974 Nature of operations 1 APPROVED BY THE BOARD OF DIRECTORS: Stéphane Ouellette Director Adam Rabie Director The accompanying notes are an integral part of these consolidated financial statements. - 2 - FRNT Financial Inc. Condensed Interim Consolidated Statements of Net Loss and Comprehensive Loss For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) Three months ended December 31, Six months ended December 31, Notes 2025 2024 2025 2024 Revenue Capital markets 17 $ 101,772 $ 33,559 $ 153,386 $ 215,807 Consulting and advisory 160,398 - 331,125 26,228 262,170 33,559 484,511 242,035 Operating expenses Depreciation 8,10 19,661 22,594 40,855 45,727 General and administrative 13 126,220 171,975 267,286 312,506 Investor relations 124,195 22,631 220,005 46,881 Referral fees - - 10,945 - Professional fees 13,14 535,062 458,103 949,880 950,052 Salaries and wages 14 175,029 299,527 457,603 565,240 Share-based payments 12(b)(c), 14 32,818 112,231 79,741 237,526 1,012,985 1,087,061 2,026,315 2,157,932 Loss before the undernoted (750,815) (1,053,502) (1,541,804) (1,915,897) Other income (expenses) Fair value gain on investments 7 12,011 477,233 174,023 535,972 Loss on revaluation of digital assets - Bitcoin 9 (163,019) - (167,231) - Interest expense 11 (5,272) (1,176) (7,445) (1,668) Foreign exchange (4,597) 30,739 (4,141) 21,983 SR&ED tax credits 5 58,280 50,058 58,280 50,058 (102,597) 556,854 53,486 606,345 Net loss (853,412) (496,648) (1,488,318) (1,309,552) Other comprehensive loss Items that may be subsequently reclassified to profit or loss: Cumulative translation adj --- ustment (9,001) (1,081) (637) 1,229 Net loss and comprehensive loss $ (862,413) $ (497,729) $ (1,488,955) $ (1,308,323) Loss per share – Basic and diluted $ $(0.020) $ $(0.013) $ $(0.036) $ $(0.035) Weighted average shares outstanding – Basic and diluted 42,545,904 37,243,585 41,703,513 37,234,629 The accompanying notes are an integral part of these consolidated financial statements. - 3 - FRNT Financial Inc. Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity For the six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) Number of common shares Share capital Stock option reserve Warrant reserve Accumulated other comprehensive income (loss) Accumulated deficit Total shareholders’ equity Balance, June 30, 2024 37,219,329 $ 11,565,336 $ 3,524,891 $ 284,858 $ (1,670) $ (10,328,073) $ 5,045,342 Shares issued for options exercised 43,214 - - - - - - Share-based payments - - 237,526 - - - 237,526 Net loss and comprehensive loss - - - - 1,229 (1,309,552) (1,308,323) Balance, December 31, 2024 37,262,543 11,565,336 3,762,417 284,858 (441) (11,637,625) 3,974,545 Balance, June 30, 2025 37,545,904 11,565,336 3,931,154 284,858 1,010 (13,240,306) 2,542,052 Shares issued in connection with private placement 5,000,000 2,000,000 - - - - 2,000,000 Share issuance costs - cash - (107,817) - - - - (107,817) Share issuance costs - broker warrants (17,117) - 17,117 - - - Share-based payments - - 79,741 - - - 79,741 Net loss and comprehensive loss - - - - (637) (1,488,318) (1,488,955) Balance, December 31, 2025 42,545,904 $ 13,440,402 $ 4,010,895 $ 301,975 $ 373 $ (14,728,624) $ 3,025,021 The accompanying notes are an integral part of these consolidated financial statements. - 4 - FRNT Financial Inc. Condensed Interim Consolidated Statements of Cash Flows For the six months ended December 31, 2025 and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) The accompanying notes are an integral part of these consolidated financial statements. December 31, December 31, 2025 2024 Cash flows from operating activities Net loss for the year $ (1,488,318) $ (1,309,552) Adjustments for non-cash items: Fair value gain on investments (174,023) (535,972) Loss on revaluation of digital assets - cryptocurrencies 167,231 - Share-based payments 79,741 237,526 Depreciation 40,855 45,727 Changes in non-cash working capital items: Trade and other receivables (7,584) 23,265 Prepaid expenses and deposits (38,352) 81,086 Accounts payable and accrued liabilities (93,800) (144,678) Net cash used in operating activities (1,514,250) (1,602,598) Cash flows from investing activities Proceeds on redemption of investments 182,452 1,049,858 Purchase of investments (28,672) - Purchase of Digital Assets - Bitcoin (700,000) - Net cash (used in) provided by investing activities (546,220) 1,049,858 Cash flows from financing activities Proceeds from issuance of shares 2,000,000 - Share issuance costs (107,817) - Lease liability payments (29,073) (27,389) Net cash provided by (used in) financing activities 1,863,110 (27,389) Impact of currency translation 614 1,168 Net change in cash (196,746) (578,961) Cash, beginning 399,519 1,552,482 Cash, ending $ 202,773 $ 973,521 Supplemental Cash Flow Disclosures Interest received 3,631 2,217 Interest paid (11,076) (3,885) FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended Decembe --- r 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 5 - 1. NATURE OF OPERATIONS FRNT Financial Inc. (the “Company”) was incorporated under the Canada Business Corporations Act on April 24, 2018. The Company’s head office and registered records office is located at 49 Wellington Street East, Unit 200, Toronto, Ontario, M5E 1C9. The Company is a financial technology company that provides a capital markets trading platform for institutional investors to access alternative trading opportunities. The Company’s common shares are listed on the TSX Venture Exchange under the trading symbol “FRNT” and on the OTCQB Market under the trading symbol “FRFLF”. These condensed interim consolidated financial statements were authorized for issue by the Board of Directors on February 26, 2026. 2. BASIS OF PRESENTATION a) Statement of compliance These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), including International Accounting Standards (“IAS”) 34 - Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”) and interpretations of the IFRS Interpretations Committee (“IFRIC”). They have been prepared in accordance with the same accounting policies and methods of application as the most recent audited financial statements for the year ended June 30, 2025, except that they do not include all the disclosures required for the annual audited financial statements. These condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the Company for year ended June 30, 2025. b) Basis of measurement These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments and digital assets measured at fair value. In addition, these condensed interim consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The condensed interim consolidated financial statements are presented in Canadian dollars. c) Consolidation These condensed interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Subsidiaries are consolidated from the date on which the Company obtains control over the subsidiary. Control occurs when the Company is exposed to, or has the right to, variable returns from its involvement with an investee and has the ability to affect those returns through its power over the investee. Details of controlled subsidiaries are as follows: FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 6 - Percentage Owned Entity Principal activities Country of incorporation December 31, 2025 June 30, 2025 FRNT Asset Management Inc. Financial technology services Canada 100% 100% FRNT Financial UK Limited Financial technology services United Kingdom 100% 100% FRNT Financial (Cayman) Limited Financial technology services Cayman Islands 100% 100% 3. MATERIAL ACCOUNTING POLICIES The material accounting policies applied in the preparation of these condensed interim consolidated financial statements are consistent with the accounting policies disclosed in Note 3 of the audited co --- nsolidated financial statements for the year ended June 30, 2025. In addition, the Company’s accounting policy to account for digital assets is as follows: Digital assets Digital assets meet the definition of intangible assets in IAS 38 Intangible Assets as they are identifiable nonmonetary assets without physical substance. Cryptocurrencies are initially recorded at cost, and the revaluation method is used to measure the digital assets subsequently at fair value. Under the revaluation method, increases in fair value are recorded in other comprehensive income, while decreases are recorded in profit or loss. The Company re-values its digital assets at the end of each reporting period. There is no recycling of gains from other comprehensive income to profit or loss. However, to the extent that an increase in fair value reverses a previous decrease in fair value that has been recorded in profit or loss, that increase is recorded in profit or loss. Decreases in fair value that reverse gains previously recorded in other comprehensive income are recorded in other comprehensive income. Digital assets consisting of cryptocurrency denominated assets are measured at fair value using the quoted price on www.BitGo.com. Management considers this fair value to be a Level 2 input under IFRS 13 Fair Value Measurement fair value hierarchy as the price on this source represents an average of quoted prices on multiple digital currency exchanges. 4. MANAGEMENT USE OF JUDGMENTS AND ESTIMATES In preparing these condensed interim consolidated financial statements, management has made judgments, estimates and assumptions that affect the applicable 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 prospectively in the period in which the estimates are revised. In preparing these condensed interim consolidated financial statements, the significant estimates and critical judgments were the same as those applied to the annual consolidated financial statements as at and for the year ended June 30, 2025. FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 7 - 5. TRADE AND OTHER RECEIVABLES December 31, 2025 June 30, 2025 Trade receivables $ 473,874 $ 562,157 Allowance for expected credit loss (Note 16) (399,600) (399,600) Interest receivable 3,613 - SR&ED receivable 58,280 - Sales tax receivable 51,983 18,008 $ 188,150 $ 180,565 During the year ended June 30, 2025, the Company performed an expected credit loss assessment and recorded an allowance of $109,600 on a balance owing from one customer. Combined with the allowance of $290,000 recorded during the year ended June 30, 2024, the entire receivable balance owing from the customer of $399,600 has been allowed for. 6. PREPAID EXPENSES AND DEPOSITS December 31, 2025 June 30, 2025 Prepaid expenses $ 52,605 $ 47,098 Short-term deposits 40,329 19,847 Prepaid expenses and deposits 92,934 66,945 Long-term deposit(1) 27,933 - $ 120,867 $ 66,945 (1) Security deposit on the Company’s office lease that --- will be applied to lease payments or returned after the next 12 months are classified as non-current and amounts to $27,933 (June 30, 2025 - $Nil). FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 8 - 7. INVESTMENT Paradox Fund (i) Paradox Fund – SPC (i) Private Company (ii) Total $ $ $ $ Balance, June 30, 2024 3,181,519 160,531 102,975 3,445,025 Proceeds on redemption of shares (1,809,997) - - (1,809,997) Fair value gain (loss) on investments 607,915 (42,326) 8,496 574,085 Balance, June 30, 2025 1,979,437 118,205 111,471 2,209,113 Additions 695 - 27,977 28,672 Proceeds on redemption of shares - (182,452) - (182,452) Fair value gain (loss) on investments 111,744 64,247 (1,968) 174,023 Balance, December 31, 2025 2,091,876 - 137,480 2,229,356 Current 2,091,876 - - 2,091,876 Non-Current - - 137,480 137,480 (i) The Company holds a total investment of 1.09% (being $1,526,115 USD of total assets under management) (June 30, 2025: 1.49%) interest in the Paradox Fund, a fund registered in the Cayman Islands. The investment is measured at fair value using unobservable inputs (Level 3) (Note 16). During the year ended June 30, 2023, Paradox decided to sell the fund’s holdings and right to claims in FTX, a now-bankrupt crypto exchange. Paradox's directors determined it was in the best interests of the fund to side pocket the realized value of the claim sale in an illiquid share class, denoted by “SPC”. The SPC was non-redeemable and classified as a long-term investment until the directors determined that the realized value of the claim sale is free and clear of claw back risk. On December 1, 2025, the Company redeemed its investment in the Paradox Fund SPC and received $182,452 ($130,000 USD) which was collected in full during the period ended December 31, 2025. The Company realized a cumulative gain of $182,452 on this redemption. During the six months ended December 31, 2025, the change in fair value on the investment resulted in a gain of $111,744 (2024: $566,209), and a gain on the SPC of $64,247 (2024: $34,526 loss). (ii) On August 29, 2022, the Company participated in a private placement for an early-stage crypto technology company by investing $114,755 (75,000 GBP). On March 6, 2023 and August 13, 2025, the Company made an additional investment of $11,585 (7,065 GBP) and $27,976 (15,000 GBP). During the six months ended December 31, 2025, the change in fair value on the investment resulted in a loss of $1,968 (2024: $4,288 gain). The fair value of the investment is determined based on the most recently observable market transactions. Management concluded that the most recent financing of this private company is a reasonable indication of the fair value of the investment as at December 31, 2025. The investment has been classified as a long-term investment due to being an investment in a private company and is categorized within Level 2 of the fair value hierarchy. FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 9 - Sensitivity analysis to significant changes in unobservable inputs within the Level 3 hierarchy The significant unobservable inputs used in the fair value measurement categorized within Leve --- l 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at December 31, 2025 and June 30, 2025 are shown below: Description Input Sensitivity December 31, 2025 June 30, 2025 Paradox Fund Net asset value 10% $ 209,200 $ 197,944 Paradox Fund - SPC Net asset value 10% $ - $ 11,821 During six months ended December 31, 2025 and the year ended June 30, 2025, there were no transfers into or out of Level 1, Level 2 or Level 3 investments. 8. EQUIPMENT Cost Computer equipment Office equipment Total Balance, June 30, 2024 $ 40,109 $ 11,979 $ 52,088 Additions 2,135 - 2,135 Balance, June 30, 2025 42,244 11,979 54,223 Additions - - - Balance, December 31, 2025 $ 42,244 $ 11,979 $ 54,223 Accumulated Depreciation Balance, June 30, 2024 $ 30,813 $ 3,732 $ 34,545 Depreciation 7,814 1,658 9,472 Balance, June 30, 2025 38,627 5,390 44,017 Depreciation 1,779 838 2,617 Balance, December 31, 2025 $ 40,406 $ 6,228 $ 46,634 Carrying amounts At June 30, 2025 $ 3,617 $ 6,589 $ 10,206 Balance, December 31, 2025 $ 1,838 $ 5,751 $ 7,589 9. DIGITAL ASSETS Details of the Company’s holdings of digital assets consisted of: As at December 31, 2025 As at June 30, 2025 Cryptocurrency Holdings Fair Value Holdings Fair Value Bitcoin 4.4312 531,459 - - 531,459 - - FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 10 - Digital assets activities consisted of: Bitcoin Balance, June 30, 2024 and June 30, 2025 $ - Additions 700,000 Loss on revaluation of digital assets (167,231) Foreign currency translation (1,310) Balance, December 31, 2025 $ 531,459 10. RIGHT-OF-USE ASSET The right-of-use asset was increased by $295,864 during the period as a result of the office lease amendment entered into on August 25, 2025. For additional information, see Note 11 – Lease Liability. Cost Office Balance, June 30, 2024 and June 30, 2025 $ 322,819 Additions 295,864 Balance, December 31, 2025 $ 618,683 Accumulated Depreciation Balance, June 30, 2024 $ 208,487 Depreciation 80,706 Balance, June 30, 2025 289,193 Depreciation 38,238 Balance, December 31, 2025 $ 327,431 Carrying amounts At June 30, 2025 $ 33,626 At December 31, 2025 $ 291,252 11. LEASE LIABILITY The Company entered into a lease agreement for office space commencing on December 1, 2021, for a term of four years, with monthly lease payments of $7,814. On August 25, 2025, the Company entered into an amendment agreement with the lessor to extend the lease term by an additional four years, commencing December 1, 2025, and ending November 30, 2029. The Company will receive two months of free rent, followed by monthly lease payments of $7,991, increasing by 1% after each year. In connection with the amendment, $15,627 of prepaid rent was reclassified as a security deposit, bringing the total security deposit to $27,933. The lease liability was remeasured using the Company’s incremental borrowing rate of 10%, resulting in an increase of $311,491. The corresponding right-of-use asset was adjusted by $295,864, net of the reclassification of prepaid rent. FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 11 - Office Balance, June 30, 2024 $ 95,162 Lease liability payments (78,137 --- ) Accretion expense 6,071 Balance, June 30, 2025 23,096 Additions 311,491 Lease liability payments (39,068) Accretion expense 9,995 Balance, December 31, 2025 $ 305,514 Allocated as: Office Current $ 61,566 Non-current 243,948 Balance, December 31, 2025 $ 305,514 The maturity analysis of the undiscounted contractual balance of the lease liability and a reconciliation to the recorded lease liability is as follows: Maturity analysis December 31, 2025 Less than one year $ 87,904 One to three years 279,694 Four to five years - Total undiscounted lease liability 367,598 Amount representing implicit interest (62,084) Lease liability $ 305,514 12. SHAREHOLDERS’ EQUITY (a) Share capital Authorized share capital of the Company consists of an unlimited number of common shares, non- cumulative discretionary dividends, voting, no par value. During the six months ended December 31, 2025 On August 1, 2025, the Company issued 5,000,000 common shares at a price of $0.40 per common share for aggregate gross proceeds of $2,000,000 (the “LIFE Offering”). In connection with the LIFE Offering, the Company paid cash finders fees of $32,564 and issued 81,410 broker warrants with a fair value of $17,117 (Note 12(c)). Each broker warrant entitles the holder to acquire one common share at a price of $0.40 per share at any time on or before August 1, 2028. In addition to the finders fees and broker warrants, $75,253 of share issuance cost were incurred in conjunction with the LIFE offering. Directors and officers subscribed for an aggregate of 475,000 common shares which is subject to an original hold period of four months and one day. FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 12 - During the six months ended December 31, 2024 The Company issued 43,214 common shares upon the cashless exercise of 62,584 stock options. (b) Options The Company has adopted a fixed stock option plan (the “Plan”) under which the aggregate number of common shares reserved for issuance under the Plan, including any common shares which may be issued pursuant to any other stock option granted by the Company outside of the Plan, shall not exceed twenty percent (20%) of the total number of issued and outstanding common shares of the Company (calculated on a non-diluted basis) as at the date of implementation of the Plan by the Company, being 8,509,180 common shares. The Plan is administered by the Board of Directors (the “Board”), which has full and final authority with respect to the granting of all options on such terms and conditions, consistent with the Plan, as the Board shall determine. The Board will establish the exercise price which will not be less than the closing market price of common shares on the date of grant of the stock options. All options granted under the Plan will expire on the fifth anniversary of the vesting date of such options, provided that in no event will the exercise period on an option exceed 10 years from the grant date. Options granted under the Plan are not transferable or assignable other than by testamentary instrument or pursuant to the laws of succession. Continuity of the Company’s stock options is as follows: Number of options Weighted average exercise price Weighted average fair value Outstanding, June 30, 2024 4,614,320 $ 0.86 $ 0.45 Granted 770,000 0.50 0.30 Exercised (500 --- ,671) 0.16 - Expired (58,265) 0.72 0.27 Outstanding, June 30, 2025 4,825,384 0.88 0.49 Expired (29,133) 0.72 0.28 Outstanding, December 31, 2025 4,796,251 $ 0.88 $ 0.49 Exercisable, December 31, 2025 4,144,965 $ 0.94 $ 0.51 The weighted average remaining contractual life of options outstanding and exercisable as at December 31 and June 30, 2025 was 3.25 and 3.58 years, respectively. During the six months ended December 31, 2025 On July 1, 2025, 14,566 options expired. The options had an exercise price of $0.72. On October 1, 2025, 14,567 options expired. The options had an exercise price of $0.72. During the six months ended December 31, 2024 On July 1, 2024, 14,566 options expired. The options had an exercise price of $0.72. FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 13 - On September 5, 2024, 31,292 options were exercised cashless for the issuance of 22,450 shares. The options had an exercise price of $0.16. The fair value of the options determined on the original grant date was $nil. On September 5, 2024, the Company granted 250,000 stock options to a consultant. The options are exercisable at a price of $0.57 per option for a period of five years from the vesting date. These options had a weighted average grant date fair value of $0.44 per option using the Black-Scholes option pricing model with the following assumptions: i) exercise price: $0.57; ii) share price: $0.58; iii) term: 5.96 years; iv) volatility: 92%; v) discount rate: 3%. One twenty-fourth of the options vest on the Vesting Commencement Date, and one twenty-fourth vest monthly thereafter in equal installments, with the final installment vesting at the end of the period. On October 1, 2024, 14,566 options expired. The options had an exercise price of $0.72. On December 2, 2024, the Company granted 50,000 stock options to a consultant. The options are exercisable at a price of $0.50 per option for a period of five years from the vesting date. These options had a weighted average grant date fair value of $0.37 per option using the Black-Scholes option pricing model with the following assumptions: i) exercise price: $0.50; ii) share price: $0.48; iii) term: 5.46 years; iv) volatility: 100%; v) discount rate: 3%. After one month following the Vesting Commencement Date, one-twelfth of the options vest, and one-twelfth vest monthly thereafter in equal installments, with the final installment vesting at the end of the period. On December 2, 2024, the Company granted 150,000 stock options to directors of the Company. The options are exercisable at a price of $0.50 per option for a period of five years from the vesting date. These options had a weighted average grant date fair value of $0.31 per option using the Black- Scholes option pricing model with the following assumptions: i) exercise price: $0.50; ii) share price: $0.42; iii) term: 6.96 years; iv) volatility: 86%; v) discount rate: 3%. One-sixteenth of the options granted vest on a quarterly basis, beginning on the Vesting Commencement Date, and quarterly thereafter in equal installments, with the final installment vesting at the end of the period. On December 24, 2024, 31,292 options were exercised cashless for the issuance of 20,764 shares. The options had an exercise price of $0.16. The fair value of the options determined on the original gran --- t date was $nil. (c) Warrants Continuity of the Company’s warrants is as follows: Number of warrants Weighted average exercise price Outstanding, June 30, 2024 3,359,200 $ 1.28 Expired (2,200,000) (1.50) Outstanding, June 30, 2025 1,159,200 $ 0.87 Granted 81,410 0.40 Outstanding, December 31, 2025 1,240,610 $ 0.84 FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 14 - As at December 31, 2025, the following warrants were outstanding: Grant date Warrants outstanding Exercise price Expiry date Remaining contractual life (years) May 21, 2024 1,035,000 $0.90 May 21, 2027 1.39 May 21, 2024 124,200 $0.60 May 21, 2027 1.39 August 1, 2025 81,410 $0.40 August 1, 2028 2.58 1,240,610 $0.84 1.4 13. OPERATING EXPENSES General and administrative The following is a breakdown of general and administrative expenses for the three and six months ended December 31, 2025, and 2024: Three months ended Six months ended December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Bank charges $ 11,221 $ 20,468 $ 26,647 $ 27,296 Insurance 13,926 19,614 27,851 39,804 Rent and rent related expenses 35,262 50,108 75,485 85,864 Travel, meals and entertainment 7,820 18,383 16,729 26,025 Recruitment and sign on fees - 3,765 - 9,015 Office 4,114 9,611 6,306 17,683 Telephone, IT and web services 15,272 9,505 28,915 27,392 Dues and subscriptions 38,605 40,521 85,353 79,427 $ 126,220 $ 171,975 $ 267,286 $ 312,506 Professional fees The following is a breakdown of professional fees for the three and six months ended December 31, 2025, and 2024: Three months ended Six months ended December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Legal and corporate services $ 9,991 $ 28,187 $ 26,665 $ 36,259 Accounting, audit, and related services 77,947 54,936 138,881 101,062 Transfer agent and filing fees 14,004 21,240 28,324 31,457 Advisory services 433,120 353,740 756,010 781,274 $ 535,062 $ 458,103 $ 949,880 $ 950,052 FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 15 - (1) The Company engages a number of individuals in a consulting capacity. Services provided by these consultants include, but are not limited to: - Acting as the Company’s Vice Chairman (Note 14); - Driving revenue and development of product offerings; - Develop and maintain customer relationships; - Regulatory compliance and registration; - Website and application maintenance, design and development. 14. RELATED PARTY TRANSACTIONS Related parties and related party transactions impacting the condensed interim consolidated financial statements not disclosed elsewhere in these condensed interim consolidated financial statements are summarized below and include transactions with key management personnel of the Company. Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. Key management personnel comprise officers and directors of the Company. Effective December 31, 2025, the President was appointed non-executive Vice Chairman and continues to be a related party. Remuneration attributed to key management personnel are summarized as follows: T --- hree months ended Six months ended December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Salaries and wages CEO $ 55,459 $ 58,723 $ 110,473 $ 113,737 CFO 4,401 4,698 8,802 9,099 Share-based payments Directors 4,245 10,068 9,333 21,039 CFO - 6,413 163 16,666 Former President, Vice Chairman - 27,438 2,182 66,668 Referral Fees Company controlled by Directors - - 10,945 - Professional fees Company controlled by CFO 53,619 28,306 114,832 73,199 Company controlled by President/Vice Chairman 97,500 82,500 232,670 145,000 Total $ 215,224 $ 218,146 $ 489,400 $ 445,408 Other related party transactions During the three and six months ended December 31, 2025, the Company earned capital markets revenue of $101,771 and $153,386 (2024: $33,559 and $175,446) from customer agency trades with FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 16 - Paradox Fund, which is managed by a company controlled by a director of the Company. Of these amounts $18,643 (June 30, 2025: $9,043) remained in trade and other receivables as of December 31, 2025. Refer to Note 7 for investment related balances, transactions and fair value gains associated with the Company’s investment in the Paradox Fund. During the three and six months ended December 31, 2025, the Company earned consulting revenue of $55,630 and $122,700 (2024: $Nil) from contractor services with OSF Management Corp. which is managed by a company controlled by a director of the Company. Of these amounts $55,630 (June 30, 2025: $Nil) remained in trade and other receivables as of December 31, 2025. As at December 31, 2025, $9,558 (June 30, 2025: $32,110) in accounts payable and accrued liabilities were owed to a companies controlled by the CFO of the Company for accounting and related services. As at December 31, 2025, $1,335 (June 30, 2025: $1,014) in accounts payable and accrued liabilities was owed to the CFO of the Company for salaries and wages. As at December 31, 2025, $29,055 (June 30, 2025: $16,999) in accounts payable and accrued liabilities was owed to the CEO of the Company for salaries and wages, and reimbursable expenses. As at December 31, 2025, $Nil (June 30, 2025: $23,542) in accounts payable and accrued liabilities was owed to a company controlled by the Vice Chairman of the Company for advisory and consulting services. 15. CAPITAL MANAGEMENT The Company’s objectives when managing capital are to pursue its operations and to maintain a flexible capital structure, which optimizes the costs of capital at an acceptable risk level. The Company considers its capital for this purpose to be its equity, $3,025,021 (June 30, 2025: $2,542,052). The Company’s primary source of capital is through the issuance of common shares and debt. The Company manages and adjusts its capital structure when changes in economic conditions occur. To maintain or adjust the capital structure, the Company may seek additional funding. The Company believes it will be able to raise capital as required 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. There have been no changes in the way in which the Company manages capital in the year. The Company’s subsidiary, FRNT Asset Management Inc., is subject to the regulatory capital requirements --- of NI 31-103 for portfolio managers, which require that it maintain minimum working capital of at least $25,000 plus the Financial Institution Bond (“FIB”) insurance deductible and other margin requirements, if any. As at December 31, 2025 and June 30, 2025, FRNT Asset Management Inc. was in compliance with its regulatory capital requirements. FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 17 - 16. FINANCIAL RISK MANAGEMENT Fair values The Company’s financial instruments consist of cash, trade and other receivables, investments, and accounts payable and accrued liabilities. Investments are carried at fair value, while cash, trade and other receivables, and accounts payable and accrued liabilities approximate their carrying value due to their current nature. Fair value measurements for financial assets classified at FVTPL are included in the fair value hierarchy as follows: 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's financial instruments that are recorded at fair value generally are classified within Level 2 or Level 3 within the fair value hierarchy using quoted market prices or quotes from administrators. As at December 31, 2025 and June 30, 2025, the Company’s investment in Paradox Fund and Paradox Fund – SPC was classified at Level 3 in the fair value hierarchy (Note 7), and the Company’s investment in the private company was classified at Level 2 in the fair value hierarchy (Note 7). Additionally, as at December 31, 2025, the Company’s Bitcoin holdings were classified within Level 2 of the fair value hierarchy. The Company’s exposure to financial instrument related risks and the methods used to manage those risks have not changed significantly over the last year. Significant risks that are relevant to the Company, as well as methods to manage the various types of risk to which it is exposed, are discussed below: Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprised three types of risk: foreign exchange risk, interest rate risk and other price risk. Market risk arises as a result of the Company generating revenues in foreign currencies, holding assets and liabilities denominated in foreign currencies, holding liabilities with variable interest rates and measuring investments at fair value. FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 18 - Foreign Exchange Risk Foreign exchange risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in foreign exchange rates. As at December 31, 2025, the Company --- is exposed to the following foreign exchange risk: CAD Equivalent Denominated in USD Cash $ 97,005 Trade and other receivables 18,619 Investment in Paradox Fund 2,091,876 Accounts payable (28,086) 2,179,414 Denominated in GBP Cash 847 Investment in private company 137,480 Accounts receivable 3,229 Accounts payable and accrued liabilities (45,016) 96,540 Net assets exposure $ 2,275,954 The Company does not currently hedge its foreign exchange risk. Based on current exposures as at December 31, 2025 and assuming that all other variables remain constant, a 10% depreciation or appreciation of the United States dollar against the Canadian dollar would result in an increase or decrease of approximately $218,000 (June 30, 2025: $229,000) in the Company’s profit or loss. A 10% depreciation or appreciation of the British pound sterling against the Canadian dollar would result in an increase or decrease of approximately $10,000 (June 30, 2025: $12,000) in the Company’s profit or loss. Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not materially exposed to this risk. Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or foreign currency risk), whether caused by factors specific to the individual investment or its issuers or factors affecting all financial instruments traded in the market. A 10% increase (decrease) in the quotes obtained from third-party administrators on the investment would change net losses by approximately $209,200 (June 30, 2025: $198,000) on its regular investment, and $Nil (June 30, 2025: $12,000) on the SPC. A 10% increase (decrease) in the estimated fair value of the Company’s investment in the private company would result in a change in net loss of approximately $13,748 (June 30, 2025: $11,150). FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 19 - A 10% increase (decrease) in the fair value of the Company’s Bitcoin holdings would result in a change in net loss of approximately $53,000 (June 30, 2025: $Nil). 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 trade and other receivables are exposed to credit risk. The Company reduces its credit risk on cash by placing these instruments with either Schedule 1 Canadian bank or reputable institutions with a sufficiently long operating history to be considered reliable for credit worthiness purposes. The Company manages its exposure to accounts receivable credit risk by assessing the associated risk of default prior to accepting new customers, monitoring the level of accounts receivable attributable to each customer, the length of time taken for amounts to be settled, and maintaining reserves for potential credit losses. In addition, if the age of an outstanding invoice reaches one year, the Company records an allowance for the doubtful account for the full amount of the invoice. Where necessary, management takes the appropriate action to collect those balances consi --- dered overdue. During the six months ended December 31, 2025, the Company recorded no additional expected credit losses. During the year ended June 30, 2025, the Company performed an expected credit loss assessment on a $399,600 balance owing from one customer that had been outstanding for more than 90 days. As a result of this assessment, an allowance for expected credit losses of $399,000 was recognized. This allowance remains outstanding as at December 31, 2025. All other customer balances in accounts receivable as at December 31, 2025 were current and considered fully collectible. Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company manages liquidity risk by maintaining sufficient cash balances to enable settlement of obligations on the due date. The Company addresses its liquidity by raising capital through the issuance of debt and equity. While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future. The table below summarizes the maturity profile of the Company’s financial liabilities based on the remaining period to the contractual maturity date as at December 31, 2025 and June 30, 2025. FRNT Financial Inc. Notes to the Condensed Interim Consolidated Financial Statements For the three and six months ended December 31, 2025, and 2024 (Expressed in Canadian dollars, unless otherwise indicated) (Unaudited) - 20 - December 31, 2025 On demand Less than 1 year 1-3 years 4-5 years Total $ $ $ $ $ Accounts payable and accrued liabilities 240,911 - - - 240,911 Lease liability - 87,904 279,694 - 367,598 June 30, 2025 On demand Less than 1 year 1-3 years 4-5 years Total $ $ $ $ $ Accounts payable and accrued liabilities 334,826 - - - 334,826 Lease liability - 23,441 - - 23,441 17. SEGMENTED INFORMATION The Company operates in one operating segment focused around developing and offering its capital market trading platform to institutional investors. All of the Company’s non-current assets, excluding financial instruments and deferred tax assets, are located in Canada. During the six months ended December 31, 2025, the Company generated 100% of total revenues from three customers located in foreign countries, of which 32% was generated from a customer domiciled in the Cayman Islands, 43% from one customer in the United States and 25% from one customer in the Bahamas. During the six months ended December 31, 2024, the Company generated 4% of total revenues with customers in Canada and generated 96% of total revenues from three customers located in foreign countries, of which 72% was generated from one customer domiciled in the Cayman Islands, 7% from one customer in the United States and 17% from one customer in the United Kingdom. The Company generated 43%, 32% and 25% (December 31, 2024: 72% and 17%) respectively, of its total revenues from its three (December 31, 2024: two) major customers.