SEDAR Interim Financial Statements

Urban Infrastructure Group Inc. (formerly Deal Pro Capital Corporation) Condensed Interim Consolidated Financial Statements (Expressed in Canadian Dollars) For the three months ended December 31, 2025 and 2024 NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the condensed interim consolidated financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim consolidated financial statements of Urban Infrastructure Group Inc. (the “Company”) have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of condensed interim consolidated financial statements by an entity’s auditor. Urban Infrastructure Group Inc. (formerly Deal Pro Capital Corporation) Condensed Interim Consolidated Statement of Financial Position (All amounts are in CAD, unless otherwise stated) (Unaudited) 1 Note As at December 31, 2025 $ As at September 30, 2025 $ Assets Current assets Cash 590,461 669,186 Trade and other receivables 5 1,225,859 1,279,992 Holdback receivables 6 321,217 321,217 Prepaid expenses and other current assets 5,000 5,000 Contract assets 7 38,184 96,527 Total current assets 2,180,721 2,371,922 Non-current assets Property, plant and equipment 8 171,483 182,904 Deferred tax assets 13 98,000 98,000 Right-of-use assets 9 33,697 40,918 Total non-current assets 303,180 321,822 Total assets 2,483,901 2,693,744 Equity and Liabilities Current liabilities Trade and other payables 10 831,291 1,030,159 Borrowings 11 79,578 103,600 Lease liabilities 9 14,793 19,520 Other liabilities 12 9,049 40,335 Current tax liabilities - - Loans from related parties 20 557,687 539,607 Total current liabilities 1,492,398 1,733,221 Non-current liabilities Borrowings 11 208,316 208,310 Lease liabilities 9 12,160 8,080 Total non-current liabilities 220,476 216,390 Total liabilities 1,712,874 1,949,611 Equity Share capital 14 2,941,418 2,941,418 Reserve - Warrants 15 130,823 130,823 Reserve - Options 16 703,804 600,114 Accumulated earnings (deficit) (3,005,018) (2,928,222) Total equity 771,027 744,133 Total equity and liabilities 2,483,901 2,693,744 DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS (Note 1) APPROVED ON BEHALF OF THE BOARD OF DIRECTORS “Gary Alves” (signed) Director “Magaly Bianchini” (signed) Director The accompanying notes form an integral part of these financial statements. Urban Infrastructure Group Inc. (formerly Deal Pro Capital Corporation) Condensed Interim Consolidated Statement of Income (Loss) and Comprehensive Income (Loss) (All amounts are in CAD, unless otherwise stated) (Unaudited) 2 Three months ended December 31, Note 2025 $ 2024 $ Revenue 17 1,424,627 1,401,963 Cost of services 18 (973,289) (1,185,730) Gross margin 451,338 216,233 Operating expenses Consulting and management fees 20 24,125 - Depreciation 8, 9 18,642 22,707 Equipment and other 25,146 24,575 General and administrative 19 39,576 45,032 Insurance 31,891 34,372 Investor relations - - Licenses, due and subscription - - Marketing and promotion 12,701 16,036 Professional fees 53,956 107,4 --- 43 Remuneration and benefits 20 168,941 140,295 Repairs and maintenance - 386 Share-based payments 103,690 478,668 496,473 Operating profit (loss) (27,330) (280,240) Other income (expenses) Finance expenses (49,466) (9,321) Other income/expense - (86) Net income (loss) before tax (79,796) (289,647) Income tax (expense) / benefit Current tax 13 - - Deferred tax 13 - - Net income (loss) and comprehensive income (loss) (79,796) (289,647) Earnings (loss) per share Basic $(0.00) $(0.00) Diluted $(0.00) $(0.00) Weighted average number of common share outstanding Basic 104,922,916 104,512,916 Diluted 104,922,916 104,512,916 The accompanying notes form an integral part of these financial statements Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Condensed Interim Consolidated Statement of Changes in Equity (All amounts are in CAD, unless otherwise stated) (Unaudited) 3 Accumulated Share Reserve - Reserve - earnings/ Total Equity Capital Warrants Options (deficit) (Deficiency) $ $ $ $ $ As at October 1, 2024 $ 2,878,811 $ 130,823 $ 211,373 $ (1,396,822) $ 1,824,185 Share-based payment - - 105,627 - 105,627 Loss for the period - - - (289,647) (289,647) December 31, 2024 2,878,811 130,823 211,373 (1,686,469) 1,534,538 Share-based payments - - 410,348 - 410,348 Exercise of options (14(ii)) - - (21,607) - (21,607) Loss for the period - - - - - September 30, 2025 2,941,418 130,823 600,114 (2,928,222) 744,133 Share-based payments - - 103,690 - 103,690 Loss for the period - - - (76,796) (76,796) December 31, 2025 2,941,418 130,823 703,804 (3,005,018) 771,027 The accompanying notes form an integral part of these financial statements Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Condensed Interim Consolidated Statement of Cash Flows (All amounts are in CAD, unless otherwise stated) (Unaudited) 4 Three months ended December 31, 2025 $ 2024 $ Loss for the period (76,796) (289,647) Adjustments for: Depreciation and amortization 18,642 22,707 Share-based payments 103,690 105,627 Deferred tax - - Bad debts - - Finance expenses 13,000 - Gain from disposition of assets - - Cash flows - operating activities before working capital changes 58,536 (161,313) Changes in: Trade and other receivables 54,133 (279,012) Holdback receivables - 119,349 Prepaid expenses and sundry assets - (10,000) Contract assets 58,343 (54,573) Trade and other payables (198,868) 296,577 Other liabilities (31,286) (4,423) Tax liabilities - (169,760) (117,678) (109,045) Net cash from / (used in) operating activities (59,142) (270,358) Cash flows from / (used in) investing activities Acquisition of property, plant, and equipment - (3,896) Down payment on acquisition of right of use assets - (81,440) Net cash from / (used in) investing activities - (85,426) Cash flows from / (used in) financing activities Proceeds from borrowings - - Proceeds from exercise of options - - Proceeds from related party loans - - Issuance of shares, net of share issue costs - - Repayment of borrowings (18,383) (12,540) Payment of lease liabilities (1,200) (11,829) Net cash from / (used in) financing activities (19,583) (24,369) Net increase / (decrease) in cash and cash equivalents (78,725) (380,153) Cash, beginning of year 669,186 671,980 Cash, end of period 590,461 291,827 The accompanying notes form an integral part of these financial statements Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Cons --- olidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 5 1 Description of business, nature of operations and going concern Urban Infrastructure Group Inc. (“Urban”, the “Company” or “UIG” and formerly Deal Pro Capital Corporation) was incorporated under the Business Corporations Act (Ontario) on June 11, 2021 (“Date of Incorporation”). The Company was classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange (the “Exchange”). On March 18, 2024, the Company completed a reverse takeover transaction with Urban Utilities Contractors Inc. which became a wholly owned subsidiary of the Company (Note 4). Urban Utilities Contractors Inc. was incorporated on September 30, 2015 and its registered office is 106 East Drive, 2nd floor, Brampton, Ontario, L6T 1C1. The Company’s financial statements are prepared on the basis of accounting principles applicable to going concern, which assumes that the Company will continue in operation for the foreseeable future. As at December 31, 2025, the Company did not achieve profitable operations and has an accumulated deficit of $3,005,018. There is a material uncertainty which may cast doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon its ability to successfully generate profitable operations. These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. 2 Basis of preparation a) Statement of compliance These condensed interim consolidated financial statements of the Company are prepared in accordance with International Financial Standard 34 Interim Financial Reporting of the International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and interpretations of the International Financial Reporting Committee (“IFRIC”). Accordingly, these condensed interim financial statements do not include all of the information and footnotes required by IFRS for complete financial statements for the year-end reporting process. These condensed interim financial statements follow the same accounting policies and methods of application as the Company’s audited financial statements for the year ended September 30, 2025. The policies applied in these condensed interim financial statements are based on IFRS issued as of the date the Board of Directors approved the financial statements. These condensed interim financial statements should be read in conjunction with the Company’s annual audited financial statements for the year ended September 30, 2025. The consolidated financial statements were approved by the Company's Board of Directors on February 25, 2026. These consolidated financial statements incorporate the financial statements of the Company and its controlled, wholly-owned subsidiary. Intercompany balances, transactions, income and expenses are eliminated on consolidation. b) Statement of compliance The Company’s consolidated financial statements include the accounts of the Company and its subsidiary, Urban Utilities Contractors Inc.. Subsidiaries are entities controlled by the Company, where control is achieved by the Company having the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. The existence and effect of potential voting right --- s that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is obtained and are deconsolidated from the date that control ceases. c) Basis of measurement These consolidated financial statements have been prepared on a going concern basis, maintains its accounts on an accrual basis, except for cash flow information, and the concept of historical cost is followed except for the following: 1. Financial instruments at fair value through profit or loss are measured at fair value. 2. Financial assets at fair value through other comprehensive income are measured at fair value. 3. In relation to lease prepayments, the initial fair value of the security deposit is estimated as the present value of the refundable amount, discounted using the market interest rates for similar instruments. The difference between the initial fair value and the refundable amount of the deposit is recognized as a Right of Use Asset and present value of lease liability. The valuation method used to measure financial instruments are further discussed in Note 21. d) Functional and presentation currency The functional currency and presentation currency of the Company is Canadian dollars. The Company does not have any transactions in currencies other than the functional currency. e) Use of estimates and judgments The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosures of contingent assets and contingent liabilities at the date of financial statements, and income and expenses during the period. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods which are affected. Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 6 (i) Significant estimates Allowance for credit losses The Company must make an assessment of whether trade receivables and holdback receivables are collectible from customers. Accordingly, management establishes an allowance for estimated credit losses arising from non-payment, taking into consideration customer credit, current economic trends and past experience. If future collections differ from estimates, future earnings would be affected. Useful lives or property, plant and equipment The Company estimates the useful lives of property, plant and equipment by analyzing the internal life of the asset which takes into account actual and expected future usage, physical wear and tear, replacement history and assumptions about the evolution of technology. Changes in these factors may cause the estimated useful lives of these assets to change. When factors indicate that the assets’ useful lives are different from the prior assessment, the Company depreciates the remaining carrying value prospectively over the adjusted estimated useful lives. The Company reviews estimates of the useful lives of property, plant and equipment on an annual basis. Leases The Company estimates the --- lease term by considering the facts and circumstances that can create an economic incentive to exercise an extension option, or not exercise a termination option by assessing relevant factors such as profitability and operations. Extension option (or options after termination options) are only included in the lease term if the lease is reasonably certain to be included (or not terminated). The assessment of the lease term is reviewed if a significant event or significant change in circumstance occurs, which affects this assessment and that is within the control of the lessee. The Company estimates the incremental borrowing rate used, if the interest rate implicit in the lease is not readily determinable, to measure its lease liability for each lease contract. This includes estimation in determining the asset- specific security impact. Valuation of contract assets Contract assets consist of an estimate of the percentage of completion within each performance obligation applied to the contractual value of each component work stream reduced by the profit margin of each component to arrive at the value of the costs to date. On site evaluation as well as daily site reports containing details of raw material, labour, and other costs are used in the estimation process. Current and deferred taxes Estimations of current and deferred tax provisions and assets or obligations require assessments to be made based on the potential tax treatment of certain items that will only be resolved once finally agreed with the relevant tax authorities. Assumptions underlying the composition of deferred tax assets and liabilities include estimates of future financial performance and the timing of reversal of temporary differences as well as the tax rates and laws at the time of the expected reversal. Share-based payments Management determines costs for share-based payments using market-based valuation techniques. The fair value of the market-based and performance-based share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviors, and corporate performance. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates. The expected volatility assumptions for the Company’s option and warrant grants are based on comparable public companies. Reverse Takeover Judgement is required when assessing the value of the consideration transferred and the net identifiable assets acquired and liabilities assumed in connection with the reverse takeover (Note 4). (i) Significant judgments Current and deferred taxes Judgment is required in determining whether deferred tax assets are recognized on the statement of financial position and what tax rate is expected to be applied in the year when the related temporary differences reverse, particularly in regard to the utilization of tax losses carry forward. Deferred tax assets, including those arising from unutilized tax losses require management to assess the likelihood that the Company will generate taxable earnings in future periods in order to utilize recognized deferred tax assets. Revenue recognition Revenue is measured at the fair value of the consideration received or --- receivable. The Company considers the terms of the contracts, the nature of the transaction, estimated time required on the project, and the specific circumstances of each arrangement. The Company recognizes revenue as it fulfills its performance obligations by transferring control of the promised services to the customer. Judgement involves determining when revenue recognition criteria have been met including when all performance obligation have been fulfilled. Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 7 Pensions The company has a pension plan for employees, and Liuna 183 Union manages the annual required contribution. Liuna is responsible for investing the funded contribution to generate returns that adequately cover employees' retirement benefits. The Company is solely responsible for the pension contributions to be made and has assessed the pension plan as a defined contribution pension plan. 3 Material Accounting Policy Information The accounting policies set out below have been applied consistently to all periods presented in these financial statements. a) Business Combinations The acquisition method of accounting is used to account for business combinations. The consideration transferred for the combination of a business comprises the fair value of the assets transferred, the liabilities incurred, and the equity interests issued by the combined companies. The consideration transferred also includes the fair value of any contingent consideration arrangement. Acquisition-related costs are expensed as incurred. b) Financial instruments (i) Financial Assets Financial assets comprise of trade and other receivables and holdback receivables. Initial recognition: All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Subsequent measurement: Financial assets measured at amortized cost: Financial assets held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are measured at amortized cost using effective interest rate (EIR) method. The EIR amortization is recognized as finance income in the Statement of Income. Financial assets at fair value through other comprehensive income (FVTOCI): Financial assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are subsequently measured at FVTOCI. Fair value movements in financial assets at FVTOCI are recognized in other comprehensive income. Financial assets at fair value through profit or loss (FVTPL): Financial assets are measured at fair value through profit or loss if it does not meet the criteria for classification as measured at amortized cost or at fair value through other comprehensive income. All fair value changes a --- re recognized in the Statement of Income. Derecognition of financial assets: Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred, and the transfer qualifies for derecognition. On derecognition of a financial asset in its entirety, the difference between the carrying amount (measured at the date of derecognition) and the consideration received (including any new asset obtained less any new liability assumed) shall be recognized in the Statement of Income. Impairment of financial assets: Trade receivables and other and holdback receivables are tested for impairment based on the expected credit losses for the respective financial asset. The carrying amount of these assets in the Statement of Financial Position is stated net of any allowance. (ii) Financial liabilities Initial recognition: Financial liabilities are initially recognized at fair value and any transaction cost that are attributable to the acquisition of the financial liabilities, except financial liabilities recognized at fair value through profit or loss which are initially measured at fair value. Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 8 Subsequent measurement: The financial liabilities are classified for subsequent measurement into the following categories: - at amortized cost - at fair value through profit or loss Amortized cost: Amortized cost for financial liabilities represents amount at which financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount. Financial liabilities at fair value through profit or loss (FVTPL): Financial liabilities at fair value through profit of loss are initially recorded at fair value and transaction costs are expensed in the statement of income and comprehensive income. Realized and unrealized gains and losses arising from changes in the fair value of the financial liabilities held at FVTPL are included in the statements of comprehensive income in the period in which they arise. When management has opted to recognize a financial liability at FVTPL, any changes associated with the Company’s own credit risk will be recognized in the Statement of Comprehensive Income. Derecognition of financial liabilities: A financial liability shall be derecognized when, and only when, it is extinguished i.e. when the obligation specified in the contract is discharged or cancelled or expires. (i) Offsetting of Financial Assets and Financial Liabilities Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the assets and settle the liability simultaneously. (ii) Reclassification of financial assets The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are categorized as equity instruments at FVTOCI and financial assets or liabilities that are specifically designated as FVTPL. --- For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be very infrequent. The management determines change in the business model as a result of external or internal changes which are significant to the Company's operations. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest. (iii) Fair value Financial assets and financial liabilities are measured at fair value using a valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in the valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). Observable inputs are in puts that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the assumptions that market participants would use, and are based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 - unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - unobservable inputs for the asset or liability. Cash under the fair value hierarchy was recorded based on level 1 inputs. The Company’s financial assets and liabilities are recorded and measured as follows: Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 9 Asset or Liability Category Cash and bank overdraft FVTPL Trade and other receivables Amortized cost Holdback receivables Amortized cost Trade and other payables Amortized cost Other liabilities Amortized cost Loans from related parties Amortized cost Borrowings Amortized cost Lease liabilities Amortized cost b) Cash and cash equivalents and bank indebtedness Cash and cash equivalents and bank overdraft comprise of cash at banks and short-term money market instruments which are readily convertible into a known amount of cash. c) Share-based compensation The Company grants stock options to buy common shares of the Company to directors, officers, employees and service providers. The Company recognizes share-based compensation expense based on the estimated fair value of the options. A fair value measurement is made for each vesting instalment within each option grant and is determined using the Black-Scholes option-pricing model. The fair value of the options is recognized over the vesting period of the options granted as both share-based compensation expense and reserves. Th --- is includes a forfeiture estimate, which is revised for actual forfeitures in subsequent periods. The reserves account is subsequently reduced if the options are exercised and the amount initially recorded is then credited to capital stock. In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as considerati on cannot be specifically identified, they are measured at the fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of the goods or services received. d) Fair value of warrants The Company measures the fair value of warrants granted from financings using the residual value method. When warrants are granted, the fair value is recorded in the warrant reserve, with the corresponding entry to share capital. When warrants are exercised, their fair value is removed from the warrant reserve account and recorded as share capital. e) Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation and where applicable accumulated impairment losses. Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchases taxes, after deducting trade discounts and rebates and includes expenditure directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labor and any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Amounts paid as advances towards the acquisition of property, plant and equipment are disclosed separately under other non-current assets as ‘capital advances’ and the cost of assets not put to use as on the balance sheet date are disclosed under ‘Capital work-in-progress’. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within other income (expenses) in the Statement of Income and Comprehensive Income. (i) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is de-recognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in Statement of Income during the period in which it is incurred. (ii) Depreciation Depreciation is recognized in the Statement of Income and Comprehensive Income on a declining basis over the estimated useful lives of each part of an item of property, plant and equipment considering residual value to be zero. Depreciation on contract-specific assets is charged co-terminus over the contract period. Management’s estimated useful lives of its assets are as follows: Asset Computers 50% declining balance basis Furniture and Fixtures 20% declining balance basis Equipment 20% declining balance basis Vehicles 30% declining balance basis Urban I --- nfrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 10 The depreciation method, useful lives and residual value are reviewed annually. f) Contract assets and contract liabilities Contract assets represent the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditioned by something other than the passage of time and not billed at the reporting date. Contract assets are transferred to trade receivables when the rights to the amount become unconditional. This usually occurs when the Company issues an invoice to the customer. Contract liabilities represent the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration in excess of revenue recognized under the contract. g) Leases The Company as a lessee The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (1) the contract involves the use of an identified asset (2) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (3) the Company has the right to direct the use of the asset. At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short- term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised. The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value- in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, --- using the incremental borrowing rates in the country of domicile of the leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option. Lease liability and ROU asset have been separately presented in the Statement of Financial Position and lease payments have been classified as financing cash flows. h) Revenue Recognition The Company enters into contracts with customers to provide concrete and drain work construction services. The Company accounts for a contract when enforceable rights and obligations between the Company and its customer are present, the contract has commercial substance, the rights of the parties and payment terms are identified, collectability of consideration is probably, and both parties have approved the contract. The Company contracts with customers include promises or arrangements to transfer multiple services to a customer. The Company assesses whether such arrangements in the contract have distinct services (performance obligation). A performance obligation is a promise in the contract to transfer distinct services to the customer. The Company’s contracts generally have multiple performance obligations, as the promise to transfer the services are separately identifiable from each other. An amendment made to an existing contract is accounted for in combination with the existing contract unless it adds services differing from services promised in the existing contract at stand alone selling prices. The Company measures revenue, for the consideration to which the Company is expected to be entitled in exchange for transferring promised services. The Company identifies the various performance obligations of the contract and allocates the transaction price to these perform ance obligations. The Company recognizes revenue as it fulfills its performance obligations by transferring control of the promised services to the customer. Incurred inefficiency cost such as the unexpected cost of materials, labor hours expended or other resources consumed do not generate revenue as they do not contribute to the Company’s progress in satisfying the performance obligations. Contract costs include direct costs such as materials, labour, and subcontract costs as well as indirect overhead costs that relate directly to satisfying the performance obligations under the contract. Costs related to the revenues recognized are expensed as incurred. i) Share capital Common shares are classified as equity. Issuance costs directly attributable to the issue of the shares or share options are recognized as a deduction from equity, net of any tax effects. Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 11 j) Impairment of non-financial assets The carrying amounts of the Company's non-financial assets and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to --- their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in income or loss. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit or group of units on a pro rata basis. Reversal of impairment loss An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized directly in other comprehensive income and presented within equity. k) Employee benefits (i) Short-term employee benefits Employee benefits such as salaries, wages and union dues falling due wholly within twelve months of rendering the service are classified as short- term employee benefits and are expensed in the period in which the employee renders the service. (ii) Union Dues: The Company pays a portion of salary as union dues (Union of employees is formed to protect the rights and interests of employees). Obligations for contributions to union dues are recognized as an employee benefit expense in income or loss in the periods during which the related services are rendered by employees. (iii)Defined contribution pension plan The Company maintains pension plans for its employees whereby the Company pays contributions based on a percentage of the employees’ monthly salaries. Obligations for contributions to pension plans are recognized as an employee benefit expense in the Statement of Income and Comprehensive Income as the services are provided. As the Company is not committed beyond these contributions, no additional provision related to these plans has been recorded. The Company participates in these mandatory general pension plans which are accounted for as defined contribution plans. l) Earnings per share The Company presents basic and diluted earnings per share (EPS) data for its common shares. Basic EPS is calculated by dividing the income or loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Where common shares are issued but not fully paid, they are treated in the calculation of basic earnings per share as a fraction of a common share to the extent that they were entitled to participate in dividends during the period relative to a fully paid common share. Diluted EPS is determined by adjusting the income or loss attributable to common shareholders and the weighted av --- erage number of common shares outstanding for the effects of all dilutive potential common shares, which includes share options granted to employees. To the extent that partly paid shares are not entitled to participate in dividends during the period they are treated as the equivalent of warrants or options in the calculation of diluted earnings per share. m) Income taxes Income tax expense comprises current and deferred tax. Income tax expense is recognized in income or loss except to the extent that it relates to items recognized directly in equity or in other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date. Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: a. the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable income or loss. b. differences relating to investments in subsidiaries and associates to the extent that it is probable that they will not reverse in the foreseeabl e future. c. arising due to taxable temporary differences on the initial recognition of goodwill, as the same is not deductible for tax purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 12 offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognized to the extent that it is probable that future taxable income will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred taxation arising on investments in subsidiaries and associates is recognized except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred taxation on temporary differences arising out of undistributed earnings of the equity method accounted investee is recorded only when it is expected to be distributed in foreseeable future based on the management's intention. n) Provisions, contingent liabilities and contingent assets Provisions are recognized only when: (i) the Company has a present obligation (legal or co --- nstructive) as a result of a past event; and (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (iii) a reliable estimate can be made of the amount of the obligation. Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: d. a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and e. a present obligation arising from past events, when no reliable estimate is possible. Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each reporting date. Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognized and measured as a provision. o) Commitments Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: f. estimated amount of contracts remaining to be executed on capital account and not provided for; g. other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. p) Accounting standards, amendments and interpretations not yet adopted IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation and disaggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. Management believes that IFRS 18 will likely have a material impact on the Company’s present or future financial position, results of operations or cash flows. The Company has not early adopted these amendments. 4 Reverse Takeover Transaction On March 18, 2024, Urban and Deal Pro Capital Corporation ('Deal Pro") completed their reversed takeover transaction (the "RTO"), pursuant to which Urban acquired all of the issued and outstanding common shares of Deal Pro in exchange for common shares of Urban. The transaction was completed by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) with the common shares of Urban listed on the Toronto Stock Ventures Exchange (TSXV) following the amalgamation of Deal Pro and Urban. On closing of the RTO and pursuant to the amalgamation agreement dated March 18, 2024, the following steps were taken to take effect to the RTO: (i) All issued and outstanding classes of common shares and stock options of Deal Pro were exchanged for post-consolidated common shares of Urban on a one-to-one basis. As a result of th --- e exchange, the exercise price of the stock options remained unchanged and there was no incremental fair value identified in relation to the exchange. The exchange resulted in the issue of 8,207,001 common shares, 570,000 stock options with a $0.05 exercise price, of which 154,054 expire June 25, 2031 and the remaining 415,946 expire March 18, 2025, and 250,700 stock options with a $0.10 exercise price, of which 67,757 expire October 22, 2031 and the remaining 182,943 expire March 18, 2025. (ii) An additional 4,357,920 post-consolidated common shares (the “Finder Shares”) were issued to Finders in connection with the RTO at no additional cost to the finders. Further, the Finders received 269,866 Finder Warrants, which can be exercised at a price of $0.15, at any time until March 18, 2026, into one common share and one-half of a common share purchase warrant. Each full purchase warrant could be exercised for a common share in the Company at a price of $0.25 for a period of two years until March 18, 2026. Upon closing of the RTO, the shareholders of Urban held a total of 100,000,000 common shares (as 83,000,000 Class A common shares and 17,000,000 Class B common shares) of the Company, representing 82.3% of the common shares of the Company before taking effect to the Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 13 subscription receipt financing. Accordingly, the acquisition of Deal Pro was considered a reverse acquisition of Deal Pro. However, as the Corporation did not meet the definition of a business as defined by IFRS 3 Business Combinations (“IFRS 3”), it has been accounted for as a share-based payment transaction in accordance with IFRS 2. The accounting for this transaction resulted in the following: a) The consolidated financial statements of the combined entity are issued under the legal parent, Deal Pro, but are considered a continuation of the consolidated financial statements of the legal subsidiary, Urban. b) As Urban is deemed to be the acquirer for accounting purposes, its assets and liabilities are included in the consolidated financial statements at their historical carrying values. c) Since the shares allocated to the former shareholders of the Corporation on closing of the RTO are considered within the scope of IFRS 2, and the Corporation cannot identify specifically some or all of the goods or service received in return for the allocation of the shares, the value in excess of the net identifiable assets or obligations of Deal Pro acquired on closing was expensed in the Statement of Income and Comprehensive Income as a listing expense. The fair value of the 8,207,001 common shares issued and outstanding with shareholders of the Company and the 4,357,920 Finder Shares issued on closing of the RTO was determined by reference to the fair value of the common shares issued pursuant to the subscription receipt financing completed by the Company, determined to be $0.137 on the date of close. At the date of acquisition on March 18, 2024, the RTO was recorded as follows: Purchase Price Consideration March 18, 2024 Fair value of common shares issued $ 1,121,988 Finder Shares 595,776 Option grant 70,953 Total Consideration Issued 1,788,717 Net Identifiable Assets (Liabilities) Acquired Cash 35,360 Loan Receivable 65,000 Prepaid Ex --- pense 31,755 Accounts payable and accrued liabilities (164,174) Total net identifiable assets (32,059) Professional Fees 137,286 Listing expenses $ 1,958,062 5 Trade and other receivables December 31, 2025 $ September 30, 2025 $ Other trade receivables, net 1,238,158 1,292,291 Less: Allowance for doubtful receivables (12,299) (12,299) Total 1,225,859 1,279,992 The Company maintains an allowance for doubtful receivables based on expected credit loss model. Trade receivables were subsequently realized and hence the credit loss allowance is $12,299 for the period ended December 31, 2025 and (year ended September 30, 2025 - $12,229) . The Company’s exposure to credit risk related to trade and other receivables, excluding contract assets is disclosed in Note 21. During the period ended December 31, 2025, the Company recorded bad debt expense of $Nil (year ended September 30, 2025 - $24,526) in the Statement of Income and comprehensive income. As of December 31, 2025, the Company has recorded accounts receivable in the amount of $1,238,158, of which $1,179,970 (inclusive of H.S.T.) is classified as overdue and there is also a holdback receivable of $321,217. The overdue balance primarily relates to amounts invoiced to a specific customer (referred to as "Customer ABC"). The Company has been actively engaging with Customer ABC to resolve the outstanding balance; however, a dispute has arisen regarding the nature and validity of certain charges. The dispute with Customer ABC has led to the commencement of litigation in Ontario Court (the “Court”), with the Company filing a statement of claim against Customer ABC on July 27, 2023. The legal proceedings are still in process and management is diligently pursuing a resolution. As part of the litigation, the Company has successfully registered liens against developer Customer ABC and Customer ABC has fully paid all amounts owed to the Company into the Court. The ultimate outcome of the litigation is uncertain, and the Company is unable to reasonably estimate the potential financial impact on the accounts receivable balance at this time. The Company continues to recognize the full amount of the overdue accounts receivable on the Statement of Financial Position, as it believes the collection of the outstanding balance is probable and can be reliably measured. Management is actively monitoring the situation, and any necessary adjustments will be made as more information becomes available. As of the date of these consolidated financial statements, no provision for a contingent liability has been recognized in the consolidated Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 14 financial statements. No amount has been specified by Customer ABC in their defense materials that have been filed with the Court. Further developments in the litigation and additional information obtained during the resolution process will be assessed, and any required adjustments will be recorded in the period in which they become reasonably estimable. 6 Holdback receivables December 31 2025 $ September 30, 2025 $ Holdback receivables Retention funds from contracts 321,217 321,217 Total 321,217 321,217 Holdback receivables represent a 10% retention of funds on ongoing contract billings with customers. The holdback receivables are re --- leased upon completion of the project, accompanied by a certification of completion to verify full discharge of obligations. As at December 31, 2025, $321,217 (September 30, 2025 - $321,217) relates to Customer ABC as per Note 5 above. 7 Contract assets December 31, 2025 $ September 30, 2025 $ Unbilled receivables 38,184 96,527 Total 38,184 96,527 Contract assets represent any excess costs over progress billings. Upon the completion of delayed billings, contract assets will be replaced by accounts receivable in the Company's financial records. As at September 30, 2025, the Company recorded a credit loss allowance of $Nil (September 30, 2025 - $Nil), related to contract assets. Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 15 8 Property, plant and equipment Computers Equipment Vehicles Furniture and Fixtures Total Cost Balance as at September 30, 2025 14,694 132,568 314,593 89,563 551,418 Additions - - - - - Disposals - - - - - Balance as at December 31, 2025 14,694 132,568 314,593 89,563 551,418 Accumulated Depreciation Balance as at September 30, 2025 12,362 85,309 231,275 39,568 368,514 Additions 291 2,380 6,250 2,500 11,421 Disposals - - - - - Balance as at December 31, 2025 12,653 87,689 237,525 42,068 379,935 Carrying Amounts Balance as at September 30, 2025 2,332 47,259 83,318 49,995 182,904 Balance as at December 31, 2025 2,041 44,879 77,068 47,495 171,483 9 Leases The Company leases mainly cars, equipment and real estate assets (such as office space). Short-term leases and leases of low-value assets refer mainly to equipment (equipment used in construction) and real estate assets (office space) which are expensed off in income and loss and hence vehicle (car) is capitalized as Right of use asset under IFRS 16. The Company incurred finance costs (interest expenses) on lease liabilities of $553 for the period ended December 31, 2025, (year ended September 30, 2025 - $3,179). The discount rate used to determine the right-of-use asset and the lease liability for each leased asset is calculated based on the implicit rate on the lease, where the implicit rate is unavailable, the leased asset is calculated based on the incremental borrowing rate at inception of the lease. The Company calculated the rate applicable to each lease contract on the basis of the lease duration. The maturity analysis of lease liabilities, based on contractual undiscounted cash flows is shown at the end of this note. Right of Use Assets Following are the changes in the carrying value of right of use assets: Vehicles $ Total $ Balance as at September 30, 2024 Additions 69,801 - 69,801 - Disposition - - Depreciation (7,221) (7,221) Balance as at December 31, 2024 62,580 62,580 Balance as at September 30, 2025 40,918 40,918 Additions and deletions Depreciation - (7,221) - (7,221) Balance as at December 31, 2025 33,697 33,697 Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 16 Lease Liabilities Following is the movement in lease liabilities: December 31, 2025 $ September 30, 2025 $ Balance, beginning of year 27,600 45,536 Additions - - Finance cost 553 3,179 Deletions --- - - Payment of lease liabilities (1,200) (21,115) Balance, end of period 26,953 27,600 December 31, 2025 $ September 30, 2025 $ Current lease liabilities 14,793 19,520 Non-current lease liabilities 12,160 8,080 Total 26,953 27,600 The table below provides details regarding the contractual maturities of lease liabilities on an undiscounted basis: December 31, 2025 $ September 30, 2025 $ Less than one year 21,115 21,115 One to five years 7,037 8,798 More than five years - - Total 28,152 29,913 10 Trade and Other Payable December 31, 2025 $ September 30, 2025 $ Trade Payables 473,632 730,748 Remuneration and benefits payable 46,662 54,098 Provincial sales tax payable (refund) 90,073 41,648 Accrued expenses 195,810 198,310 Other liabilities 25,114 5,355 Total 831,291 1,030,159 11 Borrowings December 31, 2025 $ September 30, 2025 $ a) Current Borrowings from banks -Term loan 50,096 53,896 -Vehicle loan 29,482 49,704 Total 79,578 103,600 b) Non-Current Borrowings from banks -Term loan 167,334 147,320 -Vehicle loan 40,981 60,990 Total 208,316 208,310 Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 17 Loan Principal Amount $ December 31, 2025 $ September 30, 2025 $ Issuance date Effective interest rate Maturity date Additional features Term loan (BDC 1) 100,000 - 4,980 15-06-2020 4.55% 10-12-2025 Monthly payment - $ 1,660 Term loan (BDC 2) 182,000 50,400 57,960 15-09-2021 3.00% 15-08-2027 Monthly payment - $ 2,520 Term loan (BDC 3) 138,276 138,277 138,276 28-03-2025 8.05% 28-01-2031 Highest payment - $ 3,521 Lowest payment - $ 2,316 Vehicle loan 2174 63,620 28,754 31,567 01-05-2023 6.99% 01-05-2028 Monthly payment - $ 1,116 Vehicle loan 2187 71,833 31,044 34,372 09-02-2023 1.49% 20-01-2028 Biweekly payment - $ 532 Vehicle loan 2186 40,826 10,625 12,329 14-05-2021 5.69% 28-05-2027 Biweekly payment - $ 310 Vehicle loan 2183 42,418 14,711 16,209 08-02-2021 5.99% 31-01-2028 Biweekly payment - $ 286 Vehicle loan 2182 28,304 6,844 7,877 09-06-2020 5.63% 01-06-2027 Biweekly payment - $ 188 Vehicle loan 2177 30,077 7,239 8,340 09-06-2020 5.64% 01-06-2027 Biweekly payment - $ 200 697,354 287,894 311,910 Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 18 12 Other liabilities December 31, 2025 $ September 30, 2025 $ Union dues 9,049 40,335 Pension dues - - Total 9,049 40,335 13 Income Taxes This note has not been updated from September 30,2025. 14 Share Capital Authorized Unlimited – Class A Common Shares with no par value Unlimited – Class B Common Shares with no par value Common shares – Subscribed and Fully Paid Shares Amount Class A Class B $ Balance, September 30, 2023 200 - 10 Private placement financing (i) 8,947,995 - 1,342,200 Valuation of warrants (i) - - (118,909) Cost of issuance – cash (i) - - (50,340) Finder warrants (i) - - (11,914) Share exchange from Urban to UIG (Note 4) 83,000,000 - - Replacement of Urban shares to UIG (Note 4) (200) - (6) Replacement of Urban shares to UIG (iii) (Note 4) - 17,000,000 6 Share exchange from Deal Pro to UIG (Note 4) 8,207,001 - 1,121,988 Finder shares (Note 4) 4,357,920 - 595,776 Balance, September 30, 2024 104 --- ,512,916 17,000,000 2,878,811 Stock options exercised (ii) 410,000 - 62,607 Balance, December 31, 2025 and September 30, 2025 104,922,916 17,000,000 2,941,418 (i) On March 18, 2024, the Company completed its previously announced concurrent financing with respect to the RTO transaction, pursuant to which it sold an aggregate of 8,947,995 units (“Unit”) at a price of $0.15 per Unit for aggregate gross proceeds of $1,342,200. Each Unit was comprised of one Class A common share in the capital of Urban and one-half of one warrant, each warrant is exercisable into one Urban common share, at a price of $0.25 at any time until March 18, 2026. The warrants were valued at $118,909 using the residual value method. Pursuant to the concurrent financing, Urban paid three arm’s length parties (collectively, the “Finders”) an aggregate cash commission of $50,340 and issued to the Finders an aggregate of 269,866 non-transferable Finders warrants, with each warrant exercisable into one unit (“Compensatio n Unit) at a price of $0.15 per Compensation Unit, at any time until March 18, 2026. Each whole Compensation Unit warrant entitles the holder to purchase one common share at $0.25 per common share until March 18, 2026. The Finders warrants were valued at $11,914, using the Black- Scholes pricing model with the following assumptions: Underlying price of $0.15, Exercise price of $0.25, Risk free rate of 4.02%, Volatility of 59% and the expected life of two years. (ii) On March 18, 2025, the Company issued 410,000 common shares on the exercise of 410,000 stock options. The exercise price of these options was $0.10 per share for total proceeds of $41,000. The options exercised had a fair value of $21,607 which has been reclassified from Reserve – Options to Share Capital. (iii) As at September 30, 2025, a total of 45,650,000 common shares and 9,350,000 of Class B Common shares previously held in escrow had been released and are freely tradable through the facilities of the TSX Venture. The remaining 37,350,000 common shares and 7,650,000 Class B Common shares remain subject to escrow restrictions and are scheduled to be released by March 2026, September 2026 and March 2027. Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 19 15 Warrants The following table reflects the continuity of warrants for the periods ended December 31, 2025, and September 30, 2025: Number of Grant date warrants fair value $ $ Balance, September 30, 2023 - Issued - Financing Note 14(i) 4,473,998 118,909 Issued - Finders warrants Note 14(i) 269,866 11,914 Balance, September 30, 2024 4,743,864 130,823 Issued 5,750,000 - Balance, December 31, 2025 and September 30, 2025 10,493,864 130,823 The following table reflects the warrants issued and outstanding as of December 31, 2025, and September 30, 2025: Exercise Warrants Expiry date Price ($) Outstanding Valuation March 18, 2026 $ 0.25 4,743,864 $ 130,823 March 4, 2026 (i) (Note 20) 0.12 750,000 $ - September 3, 2026 (i) (Note 20) 0.05 5,000,000 $ - (i) On August 18, 2025, the Company issued 5,750,000 common share purchase warrants as a loan bonus in connection with loans provided by the Company’s directors and an officer. The warrants are exercisable at $0.05 to $0.12 per share and expire on March 4, 2026 and September 3, 2026. See note 20 for --- details. The warrants were assessed as a compound financial instrument and were measured using the residual value method, resulting in an estimated fair value of $nil. 16 Options The following table reflects the continuity of stock options for the periods ended December 31, 2025 and September 30, 2025: Number of Weighted stock options Exercise price ($) Balance, October 1, 2023 - Granted (i) 820,700 0.01 Granted (ii) 8,778,767 0.17 Balance, September 30, 2024 9,599,467 0.17 Balance, September 30, 2024 9,599,467 0.17 Granted (iii)(iv) 3,220,000 0.10 Cancelled - - Expired (3,196,839) (0.17) Exercised (410,000) (0.10) Balance, December 31, 2025 and September 30, 2025 9,212,628 0.10 The following table reflects the Company's stock options outstanding and exercisable as at December 31, 2025: Options outstanding Options exercisable Weighted averaged remaining contractual Number of Options Weighted average exercise Number of Weighted average Expiry date 5.49 154,054 $ 0.05 154,054 $ 0.05 June 25, 2031 5.81 67,757 0.10 67,757 0.10 October 22, 2031 3.42 4,380,817 0.10 4,790,817 0.10 May 30, 2029 3.42 980,000 0.10 980,000 0.10 May 30, 2029 0.40 820,000 0.10 820,000 0.10 May 27, 2026 4.42 2,400,000 0.10 2,400,000 0.10 May 30, 2030 4.60 410,000 0.10 410,000 0.10 August 5, 2030 3.51 9,212,628 $ 0.10 6,402,628 $ 0.10 (i) With the closing of the RTO (Note 4), the Company had 570,000 and 250,700 stock options outstanding. The holders of the 570,000 stock options will be entitled to the purchase of one common share at a price of $0.05, of which 154,054 stock options expire on June 25, 2031 and 415,946 stock options expire within 12 months from closing of the RTO. The holders of 250,700 stock options will be entitled to the purchase of one common share at a price of $0.10, of which 67,757 stock options expire on October 22, 2031 and 182,943 stock options expire within 12 months from closing of the RTO. The value of these options were determined using the following parameters as per below. (ii) On May 30, 2024, the Company awarded 7,798,767 incentive options on the Company's common shares to directors, management, employee, and other individuals in accordance with the terms of the Company's incentive Stock Option Plan. The exercise price for the options is $0.18 per share. These options Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 20 will vest as to 1/2 at the date that is 18 months from the grant date and the remaining 1/2 will vest on the date that is 36 months from the grant date. The options are valid for a 5-year period from the date of grant. The Company also granted 980,000 stock options to Venture North (IR consultant), each exercisable at $0.17 per share and vesting quarterly. These options are valid for a 5-year period from the date of grant. The value of these options were determined using the following parameters as per below. On May 27, 2025, the Company repriced the remaining options with exercise price of $0.18 and $0.17 to $0.10 and accelerated the vesting terms on 820,000 options to vest immediately. This did not result in a modification of the fair value of the options. (iii) On May 27, 2025, the Company granted 2,810,000 options on the Company's common shares to directors and/or officers of the Company. The exercise price for the option --- s is $0.10 per share. These options will vest as to 50% by Nov 27, 2026 and remaining 50% to be vested by May 27, 2028. The options are valid for a 5-year period from the date of grant. The value of these options were determined using the following parameters as per below. (iv) On August 5, 2025, the Company granted 410,000 options on the Company's common shares to a director of the Company. The exercise price for the options is $0.10 per share and the options vest upon grant. The options are valid for a 5-year period from the date of grant. The value of these options were determined using the following parameters as per below. Option units 154,054 67,757 415,946 182,943 980,000 7,798,767 2,810,000 410,000 Estimated Life in year 7 7 years 1 year 1 years 1 year 5 years 5 year 5 years Exercise Price 0.05 0.10 0.05 0.10 0.17 0.18 0.10 0.10 Volatility 65% 65% 60% 60% 57% 151% 97% 96% Dividend Yield % 0% 0% 0% 0% 0% 0% 0% 0% Risk-free rate % 3.6% 3.6% 4.33% 4.33% 4.31% 3.81% 2.87% 2.94% 17 Revenues Three months ended December 31, 2025 2024 Rendering of services 1,424,627 1,401,963 Total 1,424,627 1,401,963 a) Revenue concentration For the three-month period ended December 31, 2025, there were two customers that individually comprised of more than 97% (2024 – 87%) of total revenues. 18 Cost of services Three months ended December 31, 2025 2024 Changes in work in progress 58,343 (54,574) Raw materials and consumables 478,965 614,214 Direct labor 347,608 461,697 Sub-contractors 18,495 15,210 Union Dues 61,339 148,760 Equipment rental 715 423 Other - - Total 973,289 1,185,730 Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 21 19 General and administrative expenses Three months ended December 31, 2025 2024 Bad debts - - Meals and travel 7,200 15,392 Office, and miscellaneous 5,049 10,534 Rent 22,332 15,020 Telephone and internet 2,086 3,109 Travel and training 2,908 977 Total 39,575 45,032 20 Related party transactions Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director whether executive or otherwise. Key management personnel include the board of directors and other senior management executives. Related party transactions are in the ordinary course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed upon by the related parties. Amounts due to or from related parties are non-interest bearing and unsecured unless specified. As at December 31, 2025 and September 30, 2025, the Company has the following due to and from related parties: December 31, 2025 September 30, 2025 Loans from related parties (i) 646,881 641,336 Loans to related parties 81,361 81,361 Accounts payable and accrued liabilities 90,639 90,033 (i) The Company has related party loan that bears interest at a rate of 12% to 15% per annum. During the period ended December 31, 2025, total interest of $15,152 (year ended September 30, 2025 – $18,514) was accrued or paid to the related parties in respect of this loan. The related party loans consist of the following: • A loan of $500,000 bearing interest at 12% per annum, maturing on March 3rd, 2026. In connection with obtaining this loan, --- the Company incurred financing cost of $25,000 and issued 5,000,000 common share purchase warrants to the creditor. Each warrant is exercisable at $0.05 per share at any time within 12 months from the date of issuance. • A loan of $100,000 bearing interest at 15% per annum, matured on August 5, 2025. The loan remained unpaid as at December 31, 2025 and September 30, 2025. As part of the financing arrangement, the Company issued 500,000 common share purchase warrants to the creditor, exercisable any time at $0.12 per share for 12 months from date of issuance. • A loan of $25,000 bearing interest at 15% per annum, matured on September 4, 2025. In connection with this loan, the Company issued 250,000 common share purchase warrants to the creditor, exercisable any time at $0.12 per shares for 12 months from date of issuance. The loan was repaid during the 2025 fiscal year. • A loan of $25,000 bearing interest at 15% per annum, matured on September 4, 2025. As part of the financing arrangement, the Company issued 250,000 common share purchase warrants to the creditor, exercisable any time at $0.12 per share for 12 months from date of issuance. The loan remained unpaid as at December 31, 2025 and September 30, 2025. Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 22 During the three-month periods ended December 31, 2025 and 2024, the Company incurred the following key management compensation: Three month period ended December 31, 2025 2024 Salary paid to KMP 46,248 81,690 Share-based payment 76,538 94,282 Rent 13,125 - Legal Fees - - Dividend - - Consulting fees 15,000 5,000 Management fees - 47,156 150,911 228,128 21 Financial instruments and risk management Financial instruments by category The carrying amounts and fair value of the financial instruments by each category as at December 31, 2025 and September 30, 2025 were as follows: Carrying value Fair value December 31, 2025 $ September 30, 2025 $ December 31, 2025 $ September 30, 2025 $ Financial assets Financial assets at amortized cost Trade receivables 1,225,859 1,279,992 1,225,859 1,279,992 Holdback receivable 321,217 321,217 321,217 321,217 Contract assets 38,184 96,527 38,184 96,527 Total 1,585,260 1,697,736 1,585,260 1,697,736 Carrying value Fair value December 31, 2025 $ September 30, 2025 $ December 31, 2025 $ September 30, 2024 $ Financial liabilities Financial liabilities at amortized cost Borrowings (Long term) 181,104 208,310 181,104 181,104 Non-Current Lease Liabilities 12,160 8,080 12,160 12,160 Borrowings (Short term) 106,789 103,600 106,789 106,789 Current Lease Liabilities 14,793 19,520 14,793 14,793 Trade and other payables 831,292 1,030,154 831,292 831,292 Due to related party 557,687 641,336 557,687 557,687 Other Liabilities 9,049 40,335 9,049 9,049 Total 1,712,874 2,051,335 1,712,874 2,051,335 22 Capital management The capital structure is reviewed by management and the Board of Directors on an ongoing basis. The Company considers its capital to be equity, comprising share capital and components of equity, which at December 31, 2025, totaled $771,027 (September 30, 2025 - $744,133). The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expen --- ditures, and other investing and financing activities. The forecast is updated based on the Company’s operating activities and investment activities. Information is provided to the Board of Directors. The Company's capital management objectives, policies and processes have remained unchanged during the period ended December 31, 2025 and the year ended September 30, 2025. The Company is not subject to any capital requirements imposed by a lending institution or regulatory body. 23 Segment information The Company is in the business providing construction service. Accordingly, there are no separate reportable primary segments as per IFRS Urban Infrastructure Group Inc. (formerly Urban Utilities Contractors Inc.) Notes to the Condensed Interim Consolidated Financial Statements Three months ended December 31, 2025 and 2024 (All amounts are in CAD, unless otherwise stated) (Unaudited) 23 8. Secondary segmental reporting is based on geographical location is also not applicable to the Company has its transactions are only within Canada.