SEDAR Interim Financial Statements

BADLANDS RESOURCES INC. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) 2 NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL REPORT The accompanying unaudited interim financial report of the Company has been prepared by and is the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of this financial report. 3 BADLANDS RESOURCES INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (EXPRESSED IN CANADIAN DOLLARS) (PREPARED BY MANAGEMENT) Note December 31, 2025 March 31, 2025 (unaudited) ASSETS Current assets Cash 8, 17 $ 367,885 $ 2,443 Cash in trust 16 7,561 - Accounts receivable 2,748 2,717 Prepaid expenses and deposits 4 47,488 71,115 425,682 76,275 Non-current assets Exploration and evaluation assets 5 644,489 700,000 Total assets $ 1,070,171 $ 776,275 LIABILITIES AND EQUITY Current liabilities Accounts payable and accrued liabilities $ 1,731,001 $ 1,525,846 Amounts due to related parties 7 1,791,661 1,287,660 Loans payable 6 606,774 527,530 Total liabilities 4,129,436 3,341,036 Equity (Deficiency) Share capital 8 50,283,913 50,283,913 Subscriptions received 8, 17 365,850 - Share-based payments reserve 9 1,926,603 2,290,871 Deficit (55,635,631) (55,139,545) Total deficiency (3,059,265) (2,564,761) Total liabilities and equity (deficiency) $ 1,070,171 $ 776,275 Commitments (Note 7) Contingencies (Note 16) Subsequent Events (Note 17) The condensed consolidated interim financial statements were authorized for issue by the board of directors on February 26, 2026 and were signed on its behalf by: Nelson Baker Director Trevor Thomas Director The accompanying notes are an integral part of these condensed consolidated interim financial statements. 4 BADLANDS RESOURCES INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) Note Three Months Ended December 31, 2025 Three Months Ended December 31, 2024 Nine Months Ended December 31, 2025 Nine Months Ended December 31, 2024 Expenses Interest and accretion 6 $ 14,749 $ 11,447 $ 41,043 $ 27,077 Management and consulting fees 7 257,740 172,500 657,740 517,500 Media and news dissemination 7 14,518 40,358 42,792 83,049 Office and miscellaneous 7 14,046 20,469 50,847 57,134 Professional fees 20,759 15,654 108,451 45,663 Rent 7 12,000 12,000 36,000 25,698 Transfer agent and filing fees 1,486 219 9,275 7,609 Loss before items below (335,298) (272,647) (946,148) (763,730) Foreign exchange gain (loss) 13,469 (64,684) 48,047 (62,117) Gain on sale of exploration and evaluation assets 5 - - - 40,000 Other income 10 - - 37,747 - Loss and Comprehensive loss for the period $ (321,829) $ (337,331) $ (860,354) $ (785,847) Basic and diluted loss per common share $ (0.03) $ (0.03) $ (0.08) $ (0.07) Weighted average number of common shares outstanding – basic and diluted 11,307,265 11,307,265 11,307,265 11,307,265 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 5 BADLANDS RESOURCES INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (DEFICIENCY) (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) Note Number of Shares Share Capital Subscriptions Received Share-based Payments Reserve Deficit Total Equity (Deficiency) Balance, March 31, 2024 11,307,265 $ 50,283,913 $ --- - $ 2,629,166 $ (43,706,024) $ 9,207,055 Adjustment on expiration of stock options 9 - - - (209,945) 209,945 - Adjustment on expiration of warrants 9 - - - (73,150) 73,150 - Loss and comprehensive loss for the period - - - - (785,847) (785,847) Balance, December 31, 2024 11,307,265 50,283,913 - 2,346,071 (44,208,776) 8,421,208 Adjustment on expiration of stock options 9 - - - (55,200) 55,200 - Loss and comprehensive loss for the period - - - - (10,985,969) (10,985,969) Balance, March 31, 2025 11,307,265 50,283,913 - 2,290,871 (55,139,545) (2,564,761) Share subscriptions received - - 365,850 - - 365,850 Adjustment on expiration of stock options 9 - - - (364,268) 364,268 - Loss and comprehensive loss for the period - - - - (860,354) (860,354) Balance, December 31, 2025 11,307,265 $ 50,283,913 $ 365,850 $ 1,926,603 $ (55,635,631) $ (3,059,265) The accompanying notes are an integral part of these condensed consolidated interim financial statements. 6 BADLANDS RESOURCES INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net loss for the period $ (860,354) $ (785,847) Items not affecting cash: Interest expense 41,043 27,077 Foreign exchange 7,226 69,682 Gain on sale of exploration and evaluation assets - (40,000) Other income (37,747) - Changes in non-cash working capital items: Accounts receivable (31) 2,562 Prepaid expenses and deposits 23,555 15,107 Accounts payable and accrued liabilities 227,562 51,257 Amounts due to related parties 504,001 544,766 Net cash used in operating activities (94,745) (115,396) CASH FLOWS FROM INVESTING ACTIVITIES Exploration and evaluation assets (36,303) (87,137) Proceeds from sale of exploration and evaluation assets 100,000 40,000 Net cash provided by (used in) investing activities 63,697 (47,137) CASH FLOWS FROM FINANCING ACTIVITIES Share subscriptions received 365,850 - Loans advanced from related parties 60,163 157,766 Repayment of loans from related parties (21,962) - Net cash provided by financing activities 404,051 157,766 Change in cash during the period 373,003 (4,767) Cash, beginning of the period 2,443 6,833 Cash and cash in trust, end of the period $ 375,446 $ 2,066 Supplemental cash flow information (Note 11) The accompanying notes are an integral part of these condensed consolidated interim financial statements. BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 7 1. NATURE OF BUSINESS Badlands Resources Inc. (the “Company”) was incorporated on September 1, 2006 under the laws of British Columbia, Canada, and maintains its head office at 1615 – 200 Burrard Street, Vancouver, British Columbia, Canada, V6C 3L6. Its registered office is located at 2501 – 550 Burrard Street, Vancouver, British Columbia, Canada, V6C 2B5. Effective December 1, 2023, the Company changed its name from Mineral Mountain Resources Ltd. to Badlands Resources Inc. The Company is engaged in the acquisition, exploration and development of mineral properties in North America. The Company’s common shares are listed on the TSX Venture Exchange (“TSX-V”) under the symbol “BLDS”, on the OTC Pink under the symbol “BDLNF” and on the Frankfurt Stock Exchange under the symbol “B7Q”. 2. BASIS OF PREPARATION Statement of compliance --- These condensed consolidated interim financial statements of the Company have been prepared in accordance with IFRS Accounting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34 Interim Financial Reporting. The unaudited condensed consolidated interim financial statements do not include all of the disclosures required for a complete set of annual financial statements and should be read in conjunction with the audited annual consolidated financial statements as at March 31, 2025 and for the year then ended, which have been prepared in accordance with IFRS, as issued by the IASB. These condensed consolidated interim financial statements incorporate the financial statements of the Company and its wholly owned United States (or “US”) subsidiary, Mineral Mountain Resources (SD) Inc. All intercompany transactions, balances, income and expenses are eliminated in full on consolidation. Basis of measurement These condensed consolidated interim financial statements have been prepared on a historical cost basis, except for certain financial instruments that are measured at fair value. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for cash flow information. Functional and presentation currency These condensed consolidated interim financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiary. Going concern The Company is an exploration stage company. The Company has a history of losses with no operating revenue. The ability of the Company to recover the costs it has incurred to date on the exploration and evaluation assets is dependent upon the Company being able to identify a commercial ore body to finance its exploration and development costs, and to resolve any environmental, regulatory or other constraints that may hinder the successful development of the assets. As at December 31, 2025, the Company had a cash and cash in trust balance of $375,446 and its current liabilities exceeded its current assets by $3,703,754. The aforementioned factors indicate the existence of a material uncertainty, which may cast significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to obtain adequate financing on reasonable terms from lenders, shareholders and other investors and/or to commence profitable operations in the future. Although the Company has been successful in raising funds in the past, there is no assurance that it will be able to obtain adequate financing, in which case the Company may be unable to meet its obligations. The directors, after reviewing the current cash position and having considered the Company’s ability to raise funds in the short term, adopt the going concern basis in preparing its condensed consolidated interim financial statements. BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 8 2. BASIS OF PREPARATION (cont’d…) Going concern (cont’d…) These condensed consolidated interim financial statements do not include adjustments that would be required if going concern is not an appropr --- iate basis for preparation of the condensed consolidated interim financial statements. These adjustments could be material. Critical accounting estimates The preparation of these condensed consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the period. Actual results could differ from these estimates. The Company’s 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. Significant areas requiring the use of management estimates include: i) The determination of the fair value of stock options and agent warrants using stock pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in the subjective input assumptions could materially affect the fair value estimate. ii) The determination of deferred income tax assets or liabilities requires subjective assumptions regarding future income tax rates and the likelihood of utilizing tax carry-forwards. Changes in these assumptions could materially affect the recorded amounts. Significant judgments The preparation of these condensed consolidated interim financial statements requires management to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments include: i) Recorded costs of exploration and evaluation assets are not intended to reflect present or future values of these assets. The assessment of indications of impairment loss and the reversal of an impairment loss and the measuring of the recoverable amount when impairment tests have been prepared involve judgment. The recorded costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge, that changes in future conditions could require a material change in the recognized amount. ii) The assessment of the Company’s ability to continue as a going concern involves judgment regarding future funding available for its exploration projects and working capital requirements and whether there are events or conditions that may give rise to significant uncertainty. iii) The classification of financial instruments. iv) The determination of whether it is likely that future taxable profits will be available to utilize against any deferred tax assets. 3. MATERIAL ACCOUNTING POLICIES The policies applied in these condensed consolidated interim financial statements are consistent with policies disclosed in Note 3 of the consolidated financial statements for the year ended March 31, 2025, unless otherwise noted. These condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements as at March 31, 2025 and for the year then ended. BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 9 3. MATERIAL ACCOUNTING POLICIES (cont’d…) New accounting standard IFRS 18 Presentation and Disclosure in Financial Statements In April 2024, the IASB --- issued IFRS 18, which introduces new requirements on presentation within the statement of profit or loss, disclosure standards regarding management defined performance measures, and principles for aggregation and disaggregation of financial information in the financial statements and the notes. IFRS 18 will be effective for annual reporting periods beginning on or after January 1, 2027, but companies can apply it earlier. IFRS 18 replaces IAS 1 Presentation of Financial Statements. It carries forward many requirements from IAS 1 unchanged. The Company is assessing the impact of the adoption of this standard. IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments. The amendments clarify that a financial liability is derecognized on the settlement date and introduce an accounting policy choice to derecognize a financial liability settled using an electronic payment system before the settlement date. Other clarifications include guidance on the classification of financial assets with ESG-linked features, non-recourse loans and contractually linked instruments. The amendments will be effective for annual reporting periods beginning on or after January 1, 2026, but companies can adopt it earlier only the amendments to the classification of financial assets (for contingent features). The Company is assessing the impact of the adoption of this standard. 4. PREPAID EXPENSES AND DEPOSITS December 31, 2025 March 31, 2025 Exploration deposits $ 27,678 $ 27,678 Prepaid expenses 19,810 43,437 $ 47,488 $ 71,115 BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 10 5. EXPLORATION AND EVALUATION ASSETS March 31, 2024 Additions (Impairment) March 31, 2025 Additions (Recoveries) December 31, 2025 Standby Gold Project, South Dakota Acquisition costs Option payments $ 2,150,850 $ - $ 2,150,850 $ - $ 2,150,850 Staking and other property costs 1,696,625 136,586 1,833,211 36,303 1,869,514 Option fee recovery - - - (100,000) (100,000) Impairment - (3,284,061) (3,284,061) - (3,284,061) 3,847,475 (3,147,475) 700,000 (63,697) 636,303 Exploration costs Assays 211,268 53,476 264,744 - 264,744 Drilling 3,426,468 6,171 3,432,639 - 3,432,639 Equipment rental 133,110 1,641 134,751 - 134,751 Fieldwork 205,271 - 205,271 - 205,271 Geological consulting 1,929,153 48,977 1,978,130 8,186 1,986,316 Geophysical survey 447,254 - 447,254 - 447,254 Miscellaneous 604,361 - 604,361 - 604,361 State and local taxes 217,244 1,427 218,671 - 218,671 Travel 189,166 - 189,166 - 189,166 Impairment - (7,474,987) (7,474,987) - (7,474,987) 7,363,295 (7,363,295) - 8,186 8,186 $ 11,210,770 $ (10,510,770) $ 700,000 $ (55,511) $ 644,489 BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 11 5. EXPLORATION AND EVALUATION ASSETS (cont’d…) Standby Gold Project, South Dakota The Company’s Standby Gold Project is located in the Rochford Mining District of the Black Hills, South Dakota. The Standby Gold Project includes the following properties: BHB Claims On March 7, 2016, the Company and its wholly owned US subsidiary entered into a purchase and sale agreement with four individuals --- (collectively, the “Owners”) to purchase a 100% interest in 19 unpatented lode mineral claims (“BHB Claims”) located in the Rochford Mining District and the historical database pertaining to the BHB Claims in consideration of 400,000 shares of the Company (issued during the year ended March 31, 2017 with a fair value of $1,500,000). In addition, the Company agreed to grant the Owners a collective 2% net smelter return royalty (“NSR”) on the BHB Claims, a collective 1% NSR on the Company’s Rochford Claims and a collective 1.5% NSR on claims falling within the area of mutual interest (“Area of Interest Claims Royalty”). The Area of Interest Claims Royalty will only be granted if the acquired property or properties are not already burdened with a royalty. Standby Property On September 2, 2016, the Company and its wholly owned US subsidiary entered into an option agreement to acquire a 100% interest in 9 patented lode mineral claims located in the Rochford Mining District. Pursuant to the option agreement, the Company made cash payments of US$500,000 to the optionor and earned a 100% interest in the Standby Property. In addition, the Company agreed to grant the optionor a 2% NSR. The Company has the option to purchase up to one- half of the NSR (1%) at the price of US$1,500,000 for 1% NSR or a proportionate amount if the Company purchases less than 1% of the NSR. On May 27, 2025, the Company entered into an option agreement to sell the Standby Gold Project. The Company received a $100,000 option fee and, if the purchaser decides to exercise the option, the Company will receive $600,000 and 17,000,000 common shares of the purchaser upon closing. The Company will also be granted a 1% NSR, which may be repurchased for $500,000 at any time until five years following the commencement of commercial production. A subsequent amendment to the option agreement requires the purchaser to pay $50,000 of the $600,000 in advance of exercising the option. On August 19, 2025, the purchaser provided notice of its intention to exercise the option. Closing of the sale is subject to approval by the TSX-V. As of February 26, 2026, the approval is pending. At March 31, 2025, the Company impaired the Standby Gold Project to the estimated recoverable amount of $700,000, resulting in an impairment loss of $10,759,048. The estimated recoverable amount was determined based on the expected proceeds of disposition. The Company estimated the probability of the option being exercised and applied that to the remaining proceeds. During the nine months ended December 31, 2025, the Company incurred an additional $44,489 of expenditures on the Standby Property, offset by the $100,000 option fee received. The remaining balance of $644,489 is the estimated recoverable amount at December 31, 2025. BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 12 5. EXPLORATION AND EVALUATION ASSETS (cont’d…) Goliath Property, Ontario On September 24, 2025, the Company entered into an agreement to acquire a 100% interest in the Goliath Property, located in the Kenora Mining Division, Ontario, for cash consideration of $200,000. The Goliath Property is subject to an existing 2% NSR, with the Company retaining the right to buy back one-half of the NSR (1%) for $1,000,000. The transaction is subject to the acceptance of the TSX-V. As of February --- 26, 2026, the approval is pending. Straw Lake Property, Ontario The Company holds a 100% interest in certain mineral claims in the Kenora Mining District in northwestern Ontario, previously known as the Straw Lake project. On June 3, 2021, the Company entered into an agreement to sell its interest in the Straw Lake claims for a total of $200,000, receivable in four equal instalments over a three-year period. The Company received the first instalment of $50,000 upon signing of the agreement and, during the year ended March 31, 2023, received the second instalment of $50,000. During the year ended March 31, 2024, the Company received the third instalment of $50,000, which has been recorded as a gain on sale of exploration and evaluation assets in the consolidated statements of comprehensive loss. Subsequent to March 31, 2024, the agreement was re-negotiated to amend the total proceeds from $200,000 to $190,000 and the final payment from $50,000 to $40,000. During the year ended March 31, 2025, the Company received the final instalment of $40,000, which has been recorded as a gain on sale of exploration and evaluation assets in the consolidated statements of comprehensive loss. 6. LOANS PAYABLE On August 25, 2023, the Company entered into a bridge loan agreement with a company controlled by the executive chair of the Company. Under the terms of the agreement, the Company borrowed $113,188. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of February 25, 2024 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. During the nine months ended December 31, 2025, the Company has accrued $10,340 (2024 - $9,360) of interest, resulting in a balance of $143,044 as at December 31, 2025 (March 31, 2025 - $132,704). The loan is past due as of December 31, 2025. On October 12, 2023, the Company entered into a bridge loan agreement with a company controlled by the chief financial officer of the Company. Under the terms of the agreement, the Company borrowed $20,000. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of April 12, 2024 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. During the nine months ended December 31, 2025, the Company has accrued $1,803 (2024 - $1,633) of interest, resulting in a balance of $24,950 as at December 31, 2025 (March 31, 2025 - $23,147). The loan is past due as of December 31, 2025. On February 1, 2024, the Company entered into a bridge loan agreement with a company controlled by the executive chair of the Company. Under the terms of the agreement, the Company borrowed $70,143. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of August 1, 2024 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. During the nine months ended December 31, 2025, the Company has accrued $6,136 (2024 - $5,554) of interest, resulting in a balance of $84,881 as at December 31, 2025 (March 31, 2025 - $78,745). The loan is past due as of December 31, 2025. BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 13 6. --- LOANS PAYABLE (cont’d…) On March 14, 2024, the Company entered into a bridge loan agreement with a company controlled by the chief executive officer of the Company. Under the terms of the agreement, the Company borrowed $54,808. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of September 14, 2024 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. During the nine months ended December 31, 2025, the Company has accrued $4,700 (2024 - $4,531) of interest, resulting in a balance of $65,522 as at December 31, 2025 (March 31, 2025 - $60,822). The loan is past due as of December 31, 2025. On July 1, 2024, the Company entered into a bridge loan agreement with a company controlled by the executive chair of the Company. Under the terms of the agreement, the Company borrowed $20,000. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of January 1, 2025 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. During the nine months ended December 31, 2025, the Company accrued $415 (2024 - $1,024) of interest and repaid $21,962, resulting in a balance of $nil as at December 31, 2025 (March 31, 2025 - $21,547). On August 23, 2024, the Company entered into a bridge loan agreement with a company controlled by the executive chair of the Company. Under the terms of the agreement, the Company borrowed $137,766. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of February 23, 2025 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. During the nine months ended December 31, 2025, the Company has accrued $11,398 (2024 - $4,975) of interest, resulting in a balance of $157,687 as at December 31, 2025 (March 31, 2025 - $146,289). The loan is past due as of December 31, 2025. On February 25, 2025, the Company entered into a bridge loan agreement with a company controlled by the chief executive officer of the Company. Under the terms of the agreement, the Company borrowed $40,000. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of August 25, 2025 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. During the nine months ended December 31, 2025, the Company has accrued $3,146 (2024 - $nil) of interest, resulting in a balance of $43,519 as at December 31, 2025 (March 31, 2025 - $40,373). The loan is past due as of December 31, 2025. On March 29, 2025, the Company entered into a bridge loan agreement with a company controlled by the executive chair of the Company. Under the terms of the agreement, the Company borrowed $23,890. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of September 29, 2025 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. During the nine months ended December 31, 2025, the Company has accrued $1,861 (2024 - $nil) of interest, resulting in a balance of $25,764 as at December 31, 2025 (March 31, 2025 - $23,903). The loan is past due as of December 31, 2025. On October 17, 2025, the Company entered into --- a bridge loan agreement with a company controlled by the executive chair of the Company. Under the terms of the agreement, the Company borrowed $60,163. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of April 17, 2026 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. During the nine months ended December 31, 2025, the Company has accrued $1,244 (2024 - $nil) of interest, resulting in a balance of $61,407 as at December 31, 2025 (March 31, 2025 - $nil). BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 14 6. LOANS PAYABLE (cont’d…) Balance, March 31, 2024 $ 267,438 Advances 221,656 Interest accrued 38,436 Balance, March 31, 2025 527,530 Advances 60,163 Interest accrued 41,043 Repayments (21,962) Balance, December 31, 2025 $ 606,774 Current liability $ 606,774 Long-term liability $ - 7. RELATED PARTY TRANSACTIONS Amounts due to related parties of $1,791,661 (March 31, 2025 - $1,287,660) were for services rendered to the Company by its directors and officers or companies controlled by its directors and officers, as well as expense reimbursements, and are unsecured, non-interest-bearing and have no specific terms of repayment. Key management personnel include directors (executive and non-executive) and senior officers of the Company. The compensation paid or payable to key management personnel during the nine months ended December 31, 2025 and 2024 is as follows: 2025 2024 Management and consulting fees $ 450,000 $ 450,000 The Company entered into the following transactions relating to key management personnel and entities over which they have control or significant influence during the nine months ended December 31, 2025: a) Incurred management fees of $135,000 (2024 - $135,000) to a company controlled by the chief executive officer. b) Incurred management fees of $135,000 (2024 - $135,000) to a company controlled by the executive chair. c) Incurred management fees of $67,500 (2024 - $67,500) to a company controlled by the chief financial officer. d) Incurred management fees of $67,500 (2024 - $67,500) to a company controlled by the corporate secretary. e) Incurred management fees of $45,000 (2024 - $45,000) to a company controlled by a close family member of the chief executive officer. BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 15 7. RELATED PARTY TRANSACTIONS (cont’d…) On February 1, 2024, the Company entered into consulting agreements with the chief executive officer, executive chair, chief financial officer and corporate secretary. The agreements include termination and change of control clauses. In the case of termination, the parties are entitled to an amount equal to a multiple (ranging from one to two times) of the annual base fee payable. In the case of a change of control, the parties are entitled to an amount equal to a multiple (ranging from one to two times) of the sum of the annual base fee and minimum incentive fee payable. As at December 31, 2025, the total annual base fee payable to the parties is $540,000 and the minimum incentive fee payable on a change of control would be $135,0 --- 00. During the nine months ended December 31, 2025, the Company incurred $22,500 (2024 - $22,500) in office and miscellaneous and $36,000 (2024 - $36,000) in media and news dissemination to a company controlled by the executive chair. During the nine months ended December 31, 2025, the Company incurred $36,000 (2024 - $30,000) in rent to a company with a common officer and director. 8. SHARE CAPITAL Authorized share capital The Company has authorized an unlimited number of common shares with no par value. Issued and outstanding There were no share transactions during the nine months ended December 31, 2025 and the year ended March 31, 2025. Share subscriptions During the year ended March 31, 2025, the Company received $10,000 for share subscriptions related to a private placement. The placement did not close and the subscriptions were refunded. During the nine months ended December 31, 2025, the Company received $365,850 for share subscriptions related to a private placement. Subsequent to December 31, 2025, the placement did not close and the subscriptions were refunded. 9. SHARE-BASED PAYMENTS Stock options The Company has adopted an incentive rolling stock option plan (the “Plan”) under which it is authorized to grant options to directors, officers, employees and consultants enabling them to acquire up to a maximum of 10% of the issued and outstanding common shares of the Company. The options can be granted for a maximum term of five years and vest as determined by the board of directors. Options granted to employees or consultants performing investor relations will vest in stages over 12 months with no more than one-quarter of the options vesting in any three-month period. The exercise price of options granted under the Plan shall not be less than the closing price of the Company’s shares on the trading day immediately preceding the date of grant, less the discount permitted under the TSX-V’s policies. BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 16 9. SHARE-BASED PAYMENTS (cont’d…) Stock options (cont’d…) Stock option transactions are summarized as follows: Number of Options Weighted Average Exercise Price Balance, March 31, 2024 705,000 $ 1.70 Expired (182,500) $ 1.96 Balance, March 31, 2025 522,500 $ 1.60 Expired (310,000) $ 1.58 Balance, December 31, 2025 212,500 $ 1.64 Exercisable, December 31, 2025 212,500 $ 1.64 As at December 31, 2025, the following stock options were outstanding and exercisable: Number of Options Exercise Price Weighted Average Remaining Contractual Life (Years) Expiry Date 80,000* $ 2.50 0.06 January 21, 2026 50,000 $ 1.00 1.25 April 1, 2027 82,500 $ 1.20 2.10 February 5, 2028 212,500 $ 1.64 1.13 *See Note 17 Warrants Warrants are issued as private placement incentives. Value was allocated to the warrants issued with private placement units based on the residual method. Agent warrants are measured at fair value on the date of the grant, as determined using the Black-Scholes Option Pricing Model. Warrant transactions are summarized as follows: Number of Warrants Weighted Average Exercise Price Balance, March 31, 2024 365,751 $ 2.50 Expired (365,751) $ 2.50 Balance, March 31, 2025 and December 31, 2025 - $ - BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY M --- ANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 17 10. OTHER INCOME During the nine months ended December 31, 2025, the Company reversed a $37,747 payable recorded in the fiscal 2025 year-end as a result of a mutual release agreement between the Company and the vendor. 11. SUPPLEMENTAL CASH FLOW INFORMATION Significant non-cash investing and financing transactions during the nine months ended December 31, 2025 included: a) Included in accounts payable and accrued liabilities is $8,186 related to exploration and evaluation assets. Significant non-cash investing and financing transactions during the nine months ended December 31, 2024 included: a) The Company allocated depreciation of equipment of $1,527 to exploration and evaluation assets. b) Included in accounts payable and accrued liabilities is $1,045,010 related to exploration and evaluation assets. 12. FINANCIAL INSTRUMENTS The Company classifies its financial instruments as follows: cash and cash in trust are classified as subsequently measured at amortized cost; and accounts payable, amounts due to related parties and loans payable, as subsequently measured at amortized cost financial liabilities. The carrying amount of financial assets and liabilities carried at amortized cost is a reasonable approximation of fair value due to the relatively short period to maturity of these financial instruments. Financial risk management The Company’s financial risks arising from its financial instruments are credit risk, liquidity risk, interest rate risk and foreign exchange rate risk. The Company’s exposures to these risks and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner. Credit risk Credit risk is the risk of potential loss to the Company if a counter party to a financial instrument fails to meet its contractual obligations. The credit risk of the Company is associated with cash. The credit risk with respect to its cash is minimal, as it is held with high-credit quality financial institutions. Management does not expect counterparties to fail to meet their obligations. Liquidity risk Liquidity risk is the risk that the Company will not meet its obligations associated with its financial liabilities as they fall due. The Company performs cash flow forecasting for each fiscal year to ensure there is sufficient cash available to fund its projects and operations. As at December 31, 2025, the Company had a cash and cash in trust balance of $375,446 and current liabilities of $4,129,436. The Company’s financial liabilities include accounts payable and accrued liabilities, which have contractual maturities of 30 days or are due on demand. At present, the Company’s operations do not generate cash flows. The Company’s primary source of funding has been the issuance of equity securities through private placements and the exercise of stock options and warrants, as well as loans from related parties. Despite previous success in acquiring these financings, there is no guarantee of obtaining future financings. BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 18 12. FINANCIAL INSTRUMENTS (cont’d…) Financial risk management (cont’d) Interest rate risk Interest rate risk is the risk that the fair value or --- future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company is exposed to interest rate risk to the extent of cash maintained at financial institutions. The interest rate risk on cash is not considered significant due to the short-term nature and maturity. The interest rate risk on loans payable is minimal, as the loans have fixed interest rates. Foreign exchange rate risk Foreign exchange rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. The Company funds certain operations, exploration and administrative expenses in the United States by using US dollars converted from its Canadian bank accounts. At December 31, 2025, the Company had financial assets of $1,768 and financial liabilities of $968,990 denominated in United States dollars. A 10% strengthening of the US dollar would affect net loss by approximately $97,000. The Company does not hedge its foreign exchange risk. 13. FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. As at December 31, 2025, the Company has no financial assets or financial liabilities measured at fair value. There have been no changes in these levels and no changes in classifications during the nine months ended December 31, 2025. 14. SEGMENTED INFORMATION The Company operates in a single reportable segment – the acquisition, exploration and development of mineral properties. The Company’s non-current assets are located in the United States. 15. CAPITAL MANAGEMENT The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, pursue exploration of its mineral property interest and to maintain a flexible capital structure for the benefits of its stakeholders. In the management of capital, the Company includes components of shareholders’ equity in the definition of capital. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue common shares or dispose of assets. BADLANDS RESOURCES INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED – PREPARED BY MANAGEMENT) NINE MONTHS ENDED DECEMBER 31, 2025 AND 2024 19 15. CAPITAL MANAGEMENT (cont’d…) Management reviews the capital structure on a regular bas --- is to ensure that the Company’s capital management objectives are achieved. There has been no change in the Company’s approach to capital management from the prior year. The Company’s capital is not subject to any external restrictions. 16. CONTINGENCIES The Company establishes liabilities for litigation and contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. During the year ended March 31, 2024, the Company was subject to two legal claims for unpaid debt. Of the two legal claims, one matter was paid during the year ended March 31, 2024, and the other was paid both during the years ended March 31, 2024 and 2025. Based on information currently known to management, no further liability for either claim remains at December 31, 2025. During the year ended March 31, 2025, a civil claim was filed against the Company by a company controlled by a former director for unpaid debt of $89,275. The Company formally responded to the claim and denied that any amounts are due and owing. The amount of the claim is included in amounts due to related parties at December 31, 2025. During the nine months ended December 31, 2025, a pre-judgment garnishment of $7,561 was paid into court and is held in trust. Subsequent to December 31, 2025, the amount was settled for $47,561. 17. SUBSEQUENT EVENTS Subsequent to December 31, 2025, the Company entered into a bridge loan agreement with a company controlled by the executive chair of the Company. Under the terms of the agreement, the Company borrowed $74,891. The loan is unsecured and bears interest at 10% per annum payable on maturity. The maturity date of the loan is the earlier of July 19, 2026 and the day the Company closes a financing resulting in gross proceeds equal to or greater than $1,000,000. Subsequent to December 31, 2025, share subscriptions of $365,850 were refunded for a private placement that did not close (See Note 8). Subsequent to December 31, 2025, 80,000 stock options expired unexercised. Subsequent to December 31, 2025, the civil claim was settled for $47,561 (see Note 16).