SEDAR Interim Financial Statements

IMPERIAL EQUITIES INC. Q1 2026 Interim Condensed Financial Statements NOTICE OF NO AUDITOR REVIEW OF THE INTERIM CONDENSED FINANCIAL STATEMENTS Under National Instrument 51-102, Part 4, Subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited interim condensed financial statements of Imperial Equities 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 standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor. IMPERIAL EQUITIES INC. INTERIM CONDENSED STATEMENTS OF FINANCIAL POSITION See accompanying notes to the financial statements. 1 Notes December 31, 2025 September 30, 2025 (Unaudited) (Audited) Assets Investment properties 3,13 $ 227,147,077 $ 227,029,386 Right-of-use assets 54,851 85,912 Mortgages and loans receivable 4 5,837,131 5,850,315 Total non-current assets 233,039,059 232,965,613 Current portion of mortgages and loans receivable 4 5,442,617 5,484,821 Receivables 70,229 764,839 Prepaid expenses and deposits 130,271 1,069,235 Cash 702,755 270,120 Total current assets 6,345,872 7,589,015 Total Assets $ 239,384,931 $ 240,554,628 Liabilities Mortgages 5 $ 8,101,871 $ 19,984,779 Security deposits 830,040 820,876 Term loan 199,479 214,086 Lease liabilities 13 8,031 - Deferred taxes 8 16,096,337 15,861,581 Total non-current liabilities 25,235,758 36,881,322 Income taxes payable 123,474 965,764 Current portion of lease liabilities 13 52,045 98,141 Current portion of mortgages 5 77,884,929 66,331,718 Current portion of term loan 58,267 57,709 Bank operating facilities 6 22,755,861 23,265,456 Payables and accruals 1,212,574 1,432,710 Total current liabilities 102,087,150 92,151,498 Total Liabilities 127,322,908 129,032,820 Equity Issued share capital 5,947,346 5,947,346 Contributed surplus 501,200 501,200 Retained earnings 105,613,477 105,073,262 Total Equity 112,062,023 111,521,808 Total Equity and Liabilities $ 239,384,931 $ 240,554,628 Post-reporting date events (Note 14) Signed “Sine Chadi”, Director Signed “Kevin Lynch”, Director IMPERIAL EQUITIES INC. INTERIM CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) See accompanying notes to the financial statements. 2 Three months ended December 31, Notes 2025 2024 Rental revenue 9,13 $ 4,788,428 $ 4,908,164 Property operating expenses 13 1,578,533 1,577,369 Income from operations 3,209,895 3,330,795 Finance costs 10 1,282,022 1,311,725 Administration expenses 402,874 324,232 Finance income (172,313) (114,817) Amortization of deferred leasing 98,737 104,103 Amortization of right-of-use asset 44,177 44,457 Loss on the sale of investment property 13 - 141,202 Valuation loss (gain) on investment properties, net 640,700 (133,648) Income before income tax 913,698 1,653,541 Income tax expense 8 184,458 526,129 Net income and comprehensive income $ 729,240 $ 1,127,412 Weighted average number of shares outstanding - basic & diluted 9,451,242 9,451,242 Earnings (loss) per share basic and diluted $ 0.08 $ 0.12 IMPERIAL EQUITIES INC. INTERIM CONDENSED STATEMENTS OF CHANGES IN EQUITY (Unaudited) See accompanying notes to the financial statements. 3 Number of s --- hares Capital stock Contributed surplus Retained earnings Total Balance, October 1, 2024 9,451,242 $ 5,947,346 $ 251,600 $ 100,963,197 $ 107,162,143 Dividends paid - - - (756,099) (756,099) Share based compensation - - 249,600 - 249,600 Net income and comprehensive income - - - 4,866,164 4,866,164 Balance, September 30, 2025 9,451,242 5,947,346 501,200 105,073,262 111,521,808 Dividends paid - - - (189,025) (189,025) Net income and comprehensive income - - - 729,240 729,240 Balance, December 31, 2025 9,451,242 $ 5,947,346 $ 501,200 $ 105,613,477 $ 112,062,023 IMPERIAL EQUITIES INC. INTERIM CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) See accompanying notes to the financial statements. 4 Three months ended December 31, Notes 2025 2024 Operating activities Net income from operations $ 729,240 $ 1,127,412 Finance costs 1,282,022 1,311,725 Finance income (172,313) (114,817) Leasing commissions (516,279) (36,180) Items not affecting cash: Amortization of right-of-use asset 44,177 44,457 Amortization of tenant inducements 31,714 31,714 Amortization of deferred leasing commissions 98,737 104,103 Loss on sale of investment properties - 141,202 Valuation loss (gain) on investment properties 640,700 (133,648) Straight-line rental revenue 77,110 48,036 Deferred income taxes 8 234,756 371,561 Net change in operating working capital 11 559,489 (90,474) Cash provided by operating activities 3,009,353 2,805,091 Investing activities Proceeds on sale of investment properties - 2,058,798 (Additions) recoveries to investment properties (449,673) 8,975 Advances on loans and mortgages receivable - (272,757) Principal received on mortgages and loans receivable 77,930 20,527 Interest received on mortgages and loans receivable 149,771 114,862 Cash provided by (used in) investing activities (221,972) 1,930,405 Financing activities Proceeds from new mortgages 1,050,000 - Repayment of mortgages (1,380,109) (1,902,596) Fees associated with new or renewed mortgages (16,003) (10,993) Repayment of term loan (14,049) - Finance costs paid (1,244,549) (1,209,943) Principal repayments on lease liability (51,416) (49,599) Dividends paid (189,025) (189,025) Net advances from bank operating facilities (509,595) (1,373,485) Cash used in financing activities (2,354,746) (4,735,641) Decrease in cash and cash equivalents 432,635 (145) Cash and cash equivalents, beginning of period 270,120 306,017 Cash and cash equivalents, end of period $ 702,755 $ 305,872 Supplemental cash flow information (Note 11) IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 5 1. Nature of operations Imperial Equities Inc. (“the Company”) was incorporated in Edmonton, Alberta, Canada. The registered and operating office of the Company is 2151, 10060 Jasper Avenue, Edmonton, Alberta T5J 3R8. The Company is an industrial landlord, and its operations consist of the acquisition, development, and redevelopment of industrial, agricultural, and commercial properties primarily in Edmonton, throughout Alberta and in British Columbia. The Company’s common shares trade on the TSX Venture Exchange (TSXV) under the symbol “IEI”. 2. Statement of compliance and basis of presentation Statement of compliance These interim condensed financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting (“IAS 34”), as issued by the International Accounting Standards Board (“IASB”). Accordingly, certa --- in information and note disclosures normally included in the annual financial statements have been omitted or condensed. The Board of Directors authorized these interim condensed financial statements for issue on February 12, 2026. Basis of presentation These interim condensed financial statements have been prepared using the same accounting policies and methods as those used in the audited financial statements for the year ended September 30, 2025, except as explained below, and should be read in conjunction with the Company’s annual September 30, 2025 financial statements which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB. The interim condensed statements are for the three months ended December 31, 2025, and are presented in Canadian dollars, which is the functional currency of the Company. Use of estimates judgments and assumptions The preparation of these interim condensed financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue, and expenses. The significant judgments made by management when applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Company’s annual September 30, 2025 audited financial statements. New and amended standards adopted Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosure clarify the requirements for the timing of recognition and derecognition of some financial assets and liabilities, add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion, add new disclosures for certain instruments with contractual terms that can change cash flows, and make updates to the disclosure for equity instruments designated at fair value through other comprehensive income. The effective date for these amendments is for annual reporting periods beginning on or after January 1, 2025. These amendments did not have a material effect on the interim condensed financial statements. IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 6 2. Statement of compliance and basis of presentation (cont’d) New and amended standards not yet adopted IFRS 18 Presentation and Disclosure in Financial Statements is the new standard on presentation and disclosure in financial statements, with a focus on updates to the statement of profit or loss. New key concepts include the structure of the statement of profit or loss, required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial statements, and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. The effective date for this standard is for annual reporting periods beginning on or after January 1, 2027. The Company is currently assessing the impact of this standard on its financial statements. 3. Investment properties Income producing properties Held for development Total investment properties Balance, September 30, 2025 $ 224,093,750 $ 2,935,636 $ 227,029,386 Additions: Property improvements and additions 449,673 - 449,673 Leasing commissions 516,279 - 516,279 Amortization of tenant inducements (31,714) - (31 --- ,714) Amortization of deferred leasing commissions (98,737) - (98,737) Change in straight-line rental revenue (77,110) - (77,110) Fair value losses, net (640,700) - (640,700) Balance, December 31, 2025 $ 224,211,441 $ 2,935,636 $ 227,147,077 Valuation methodology and processes There have been no changes to the valuation methodology and processes used by the Company since in the year ended September 30, 2025. The key level 3 valuation inputs for the investment properties are set out below. Valuation technique – Direct Comparison At December 31, 2025 Land held for development - Weighted average price per acre Edmonton Red Deer Rural Alberta $ 790,000 $ 400,000 $ 6,428 At September 30, 2025 Land held for development - Weighted average price per acre Edmonton Red Deer Rural Alberta $ 790,000 $ 400,000 $ 6,428 IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 7 3. Investment properties (cont’d) Valuation technique – Income capitalization At December 31, 2025 Single tenant - Edmonton region Single tenant - Alberta urban, outside Edmonton Single tenant - Rural Alberta and B.C. Multi tenant - Edmonton Range Weighted Average Vacancy loss percentage 1.00%-2.00% 1.78% 1.14% 1.43% 1.46% Structural reserve percentage 0.50%-2.00% 1.31% 0.58% 1.41% 1.86% Net operating income $ 513,426 $ 1,268,554 $ 372,469 $ 562,572 Capitalization rate 4.50%-8.00% 6.19% 6.50% 7.30% 6.08% Fair value (total) $ 113,410,442 $ 62,936,000 $ 20,450,000 $ 27,415,000 At September 30, 2025 Single tenant - Edmonton region Single tenant - Alberta urban, outside Edmonton Single tenant - Rural Alberta and B.C. Multi tenant - Edmonton Range Weighted Average Vacancy loss percentage 1.00%-2.00% 1.78% 1.14% 1.42% 1.46% Structural reserve percentage 0.50%-2.00% 1.45% 0.58% 1.41% 1.86% Net operating income $ 511,426 $ 1,268,554 $ 370,772 $ 562,781 Capitalization rate 4.50%-8.00% 6.19% 6.50% 7.29% 6.08% Fair value (total) $ 113,470,750 $ 62,936,000 $ 20,264,000 $ 27,423,000 A balance of $254,558 (September 30, 2025 - $259,250) is included with the carrying value of a specific property for the purposes of the valuation calculation, however is classified separately as a mortgage receivable for financial statement presentation. Fair value sensitivity The following table summarize the fair value sensitivity at December 31, 2025 for the Company’s income producing properties which are most sensitive to changes in capitalization rate, and normalized net operating income: Capitalization rate Normalized net operating income Rate sensitivity Weighted average cap rate Fair value Change in fair value Sensitivity Normalized NOI Fair value Change in fair value (0.50)% 5.87% $ 243,322,656 $ 19,111,215 $(500,000) $ 13,733,190 $216,357,165 $(7,854,276) (0.25)% 6.12% $ 233,376,447 $ 9,165,006 $(250,000) $ 14,023,190 $220,284,303 $(3,927,138) 0.00% 6.37% $ 224,211,441 $ - $ - $ 14,273,190 $224,211,441 $ - 0.25% 6.62% $ 215,739,080 $ (8,472,361) $ 250,000 $ 14,523,190 $228,138,580 $3,927,139 0.50% 6.87% $ 207,883,701 $(16,327,740) $ 500,000 $ 14,773,190 $232,065,719 $7,854,278 IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 8 4. Mortgages and loans receivable December 31, 2025 September 30, 2025 Loan receivable from a tenant, bearing interest at 5.5% per annum, repayable in equal monthly payments of principal and interest of $496, with a maturity date of May 1, 2028, at which time any --- outstanding balance is repayable in full. $ 40,344 $ 41,272 Loan receivable from a tenant, bearing interest at 8.5% per annum, repayable in equal monthly payments of principal and interest of $3,358, with payments commencing January 1, 2025 and a maturity date of December 31, 2034. 254,558 259,250 Mortgage receivable, bearing interest at 8.00% per annum, repayable in monthly blended payments of principal and interest of $10,303, due on demand (2025 – maturity date of October 31, 2025). Secured by a first mortgage charge against land and building (Note 4 (i)). 1,325,626 1,330,392 Mortgage receivable, bearing interest at 5.0% per annum, with monthly blended payments of principal and interest of $34,315, and a maturity date of May 28, 2027. Secured by a first mortgage charge against land (Note 4(ii)). 5,636,055 5,658,179 Mortgage receivable, bearing interest at 5.00% per annum, with monthly blended payments of principal and interest of $23,519, and a maturity date of Sep 1, 2026, at which time any outstanding balance is repayable in full. Secured by a first mortgage charge against land and building. 4,023,165 4,046,043 11,279,748 11,335,136 Less current portion (5,442,617) (5,484,821) Long-term portion $ 5,837,131 $ 5,850,315 i) During the quarter ended December 31, 2025, the maturity date was extended to December 31, 2025. Subsequent to December 31, 2025, the mortgage receivable became due on demand. The mortgage receivable can be prepaid in whole or in part without penalty and is carried at fair value. ii) Subsequent to December 31, 2025, the Company became aware that the mortgagor had defaulted on certain terms of the mortgage. The Company has entered into discussions with the mortgagor regarding remedying the defaults and is monitoring the situation. The security on the mortgage was assessed to have a value in excess of the outstanding debt, and as such no impairment has been recognized on this balance at December 31, 2025. IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 9 5. Mortgages Maturity Date Monthly blended principal and interest payments Rate December 31, 2025 September 30, 2025 $ $ $ ** October 1, 2025 53,312 7.020% 3,921,839 3,952,361 ** November 1, 2025 35,967 6.640% 2,681,962 2,724,272 January 1, 2026 23,512 5.930% 1,237,783 1,289,683 January 1, 2026 18,660 5.930% 982,368 1,023,558 February 1, 2026 27,167 4.300% 3,462,622 3,506,915 February 1, 2026 26,677 4.300% 3,400,099 3,443,592 February 1, 2026 16,761 4.300% 1,240,220 1,277,026 April 1, 2026 26,460 4.270% 2,653,896 2,704,835 April 1, 2026 28,047 4.270% 3,612,072 3,657,669 April 1, 2026 33,136 6.010% 3,065,695 3,119,077 April 1, 2026 23,715 2.675% 1,656,973 1,716,831 July 1, 2026 76,219 2.710% 8,413,669 8,584,873 July 1, 2026 39,884 2.710% 4,402,718 4,492,306 August 1, 2026 21,295 4.188% 2,803,485 2,838,030 September 1, 2026 100,705 4.950% 16,942,175 17,035,993 October 1, 2026 65,250 2.940% 7,263,505 7,405,500 November 1, 2026 39,621 4.663% 5,990,322 6,039,642 December 1, 2026 31,349 4.669% 2,245,960 2,313,521 December 1, 2026 28,482 4.669% 2,040,579 2,101,962 * December 1, 2026 (2025 - December 1, 2025) 39,063 (2025 - 43,161) 4.037% (2025 - 6.763%) 3,204,270 3,279,488 January 1, 2028 6,466 4.222% 1,050,000 - June 11, 2029 42,759 3.480% 3,776,552 3,871,737 Total mortgages 86,048,764 86,378,871 Less: current portion of principal payments (77,884,929) (66,331,718) Less: Balance of unamortized finance fees (6 --- 1,964) (62,374) 8,101,871 19,984,779 Weighted average rate 4.34% 4.44% * Mortgages renewed during the three months ended December 31, 2025. References to the comparative period of 2025 are the balances and terms at September 30, 2025. ** During the quarter, the Company entered into commitment letters to refinance these mortgages. Both refinancings were completed subsequent to quarter end. The net additional funds from refinancing totalling $4,260,000 were applied against the outstanding lines of credit. All the mortgages are repayable in blended monthly payments of interest and principal. The security pledged for each mortgage is limited to the related investment property. IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 10 6. Bank operating facilities December 31, 2025 September 30, 2025 LOC with a limit of $15,500,000 $ 14,887,266 $ 15,376,917 LOC with a limit of $8,000,000 7,868,595 7,888,539 Bank operating facilities $ 22,755,861 $ 23,265,456 There have been no changes to the terms of the bank operating facilities, which consist of lines of credit (“LOC”) since the year ended September 30, 2025. Starting May 1, 2025, the Company was in violation of the covenant requiring a minimum of 90% occupancy of the secured buildings as the result of the vacancy of one of the buildings securing the LOC. Under the terms of the LOC, a 6 month grace period commenced, wherein the property was subject to a reduced LTV of 50%, and the DCSR requirements remain unchanged. The grace period expired October 31, 2025 resulting in the LTV on the specific property being reduced to 0%, with the DSCR requirements remaining unchanged. At December 31, 2025 the Company remained in compliance with the LTV and DSCR requirements, and the availability of the facility remained unchanged. Subsequent to quarter end, the property was leased and the Company returned to compliance with the minimum 90% occupancy requirement. 7. Equity Dividends Holders of common shares are entitled to receive dividends when declared by the Company’s Board of Directors. During the quarter ended December 31, 2025, the Company paid dividends of $0.02 per share for a total of $189,025 (Quarter ended December 31, 2024 - $0.02 per share for a total of $189,025). Stock options Number Weighted average exercise price Outstanding at September 30, 2025 and December 31, 2025 400,000 $ 3.93 Exercisable at September 30, 2025 and December 31, 2025 400,000 $ 3.93 The weighted average contractual life for the share options outstanding at December 31, 2025 is 4.15 years (September 30, 2025 - 4.41 years). Earnings per share The impact of the 400,000 stock options that are exercisable at December 31, 2025 and 200,000 stock options exercisable at December 31, 2024 was anti-dilutive and therefore the stock options were excluded in the calculation of diluted earnings per share in both periods. IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 11 8. Income taxes a) Provision for income taxes Components of income tax expense (recovery) Three months ended December 31, 2025 2024 Current tax expense $ 123,474 $ 184,687 Prior period adjustments (173,772) (30,119) Deferred tax expense 234,756 371,561 $ 184,458 $ 526,129 b) Deferred taxes December 31, 2025 September 30, 2025 Deferred tax assets are attributable to the following: Lease liabilities $ 73,099 $ 85,085 Finance fees 8,475 7,244 Capital l --- osses - 51,628 Total deferred tax assets 81,574 143,957 Offset of deferred tax liabilities (81,574) (143,957) Net deferred tax assets $ - $ - Deferred tax liabilities are attributable to the following: Straight-line rent receivable $ 338,455 $ 356,191 Investment properties 15,124,507 14,966,816 Mortgages receivable 33,874 30,324 Deferred leasing 488,388 392,353 Right-of-use-assets 12,616 19,760 Capital gain reserve 180,071 240,094 Total deferred tax liabilities 16,177,911 16,005,538 Offset of deferred tax assets (81,574) (143,957) Net deferred tax liabilities $ 16,096,337 $ 15,861,581 IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 12 9. Rental revenue The Company leases its commercial properties under operating leases with current terms ranging between 1 and 13 years. Some leases have options to extend for further five-year terms. Two leases have early termination clauses under specific circumstances. Rental revenue includes the following: Three months ended December 31, 2025 2024 Rental revenue, contractual amount $ 3,604,554 $ 3,685,840 Property tax and insurance recoveries 873,029 889,298 Amortization of tenant inducements (31,714) (31,714) Straight-line rental revenue (77,110) (48,036) Total lease income 4,368,759 4,495,388 Operating expense recoveries 419,669 412,776 Total rental revenue $ 4,788,428 $ 4,908,164 Future contracted minimum rent receivable from non-cancellable tenant operating leases is as follows: 2025 2024 One year $ 14,080,019 $ 14,465,694 One to two years 13,098,104 12,711,460 Two to three years 10,989,247 11,290,047 Three to four years 8,771,391 9,004,400 Four to five years 7,553,051 6,769,843 Thereafter 26,862,551 29,392,461 $ 81,354,363 $ 83,633,905 The future contracted minimum rent receivable could be negatively impacted by a tenant having financial difficulties and being unable to meet their rent obligations. The future rent receivable assumes all tenants will honor the financial obligations of their leases, to the terms of their leases, with no defaults or variations in the contracted amounts. 10. Finance costs The components of finance costs are as follows: Three months ended December 31, 2025 2024 Interest on mortgages $ 938,755 $ 999,420 Interest on bank operating facilities 325,657 285,537 Interest on lease obligations 1,195 3,013 Amortization of deferred financing fees 16,415 18,755 Finance fees - 5,000 Total $ 1,282,022 $ 1,311,725 IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 13 11. Supplemental cash flow information Three months ended December 31, 2025 2024 Change in operating working capital: Receivables $ 694,610 $ 219,903 Prepaid expenses and deposits 938,964 987,817 Security deposits 9,164 - Payables and accruals (240,959) (251,433) Income taxes payable (842,290) (1,046,761) Net change in operating working capital $ 559,489 $ (90,474) Interest paid $ 1,244,784 $ 1,209,941 Income taxes paid $ 791,992 $ 1,201,423 Non-cash transactions: Three months ended December 31, 2025 2024 Acquisition of lease asset $ 17,025 $ - Disposition of a lease asset $ (3,909) $ - 12. Fair value of financial instruments December 31, 2025 September 30, 2025 Financial assets Cash and cash equivalents $ 702,755 $ 270,120 Receivables 70,229 764,839 Mortgages and loans receivable 11,279,748 11,335,136 12,052,732 12,370,095 Financial liabilities Bank operating facilities $ 22,755,861 $ 23,265,456 P --- ayables and accruals 1,212,574 1,432,710 Lease liability 60,076 98,141 Security deposits 830,040 820,876 Term loan 257,746 271,795 Mortgages 85,986,800 86,316,497 $ 111,103,097 $ 112,205,475 Measurement of fair value The carrying value of cash and cash equivalents, receivables, bank operating facilities, payables and accruals, and security deposits approximate their fair value because of the short term and demand nature of those instruments. IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 14 12. Financial instruments (cont’d) Mortgages and loans receivable include two mortgages that are measured at fair value as they are prepayable without penalty. The fair value of the mortgages at December 31, 2025 totals $5,375,945 (September 30, 2025 - $5,376,435). The remaining mortgage and loan receivables are recorded at amortized cost with a total carrying value of $5,932,915 (September 30, 2025 - $5,885,152). The estimated fair value of the mortgage and loan receivables carried at amortized cost at December 31, 2025 is $6,134,000 (September 30, 2025 - $6,184,000). The fair value of mortgages and loans receivable is a level 2 measurement and is based on discounted future cash flows using rates that reflect observable current market rates for similar debt with similar terms and conditions. The estimated fair value of the mortgages and loans receivable at December 31, 20205 September 30, 2025 is based on a discount rate of 3.98% (September 30, 2025 – 4.26%). The fair value of mortgages payable and term loan is a level 2 measurement and is based on discounted future cash flows using rates that reflect observable current market rates for similar investments with similar terms and conditions. The estimated fair value of mortgages payable as at December 31, 2025 is $83,865,000 (September 30, 2025 - $86,391,000). The estimated fair value of the term loan at December 31, 2025 is $253,000 (September 30, 2025 - $266,000). These estimates are subjective as current interest rates are selected from a range of potentially acceptable rates and accordingly, other fair value estimates are possible. The interest rate used for these calculations was 6.09% (September 30, 2025 – 6.09%). 13. Related party transactions Sable Realty & Management Ltd. (“Sable”), a company controlled by the President and CEO of the Company, provides property management services to the Company. North American Realty Corp. (“NARC”), which is controlled by the President and CEO of the Company, provides asset management services to the Company. North American Mortgage and Leasing Corp. (“NAML”) provides vehicles under lease to the Company. There have been no changes to the nature of related party transactions since the year ended September 30, 2025. Transactions with related parties during the period are summarized below: a) Management agreements Three months ending December 31, Financial statement category 2025 2024 Property management and maintenance fees paid to Sable Property operating expenses (Statement of income) $ 352,402 $ 453.692 Disposition fees paid to NARC Loss on sale of investment properties (Statement of income) - 66,000 Leasing fees paid to NARC Investment properties (Statement of financial position) 169,345 36,180 Vehicle lease payments paid to NAML Lease liabilities (Statement of financial position) 2,250 2,250 $ 523.997 $ 558.122 At December 31, 2025 the Company has $18,427 in outstanding payables to Sable (S --- eptember 30, 2025 – $31,198) to Sable. IMPERIAL EQUITIES INC. NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS Three months ended December 31, 2025 15 13. Related party transactions (cont’d) b) Other related party transactions i) Payments made to (received from) Sable Realty & Management Ltd. in the normal course of business for the period are as follows: Three months ending December 31, 2025 2024 Leased office space and parking $ 45,000 $ 45,000 Rent at Sable Centre (25,633) (25,633) Net payments for the period $ 19,367 $ 19,367 ii) Directors are paid a fee for attending directors’ meetings. The fees are measured at the exchange amount established and agreed to by the related parties. These transactions occurred in the normal course of operations. Total fees paid for the three months ended December 31, 2025 were $10,000 (December 31, 2024 – $10,000). iii) Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. The amount disclosed in the table are recognized as an expense during the year. There were no other transactions with key management personnel. Three months ending December 31, 2025 2024 Salaries and wages $ 130,000 $ 130,000 Short-term employee benefits 4,105 3,798 Total $ 134,105 $ 133,798 14. Post-reporting date events On January 5, 2026, the Company declared a quarterly dividend of $0.02 per share totalling $189,025 which was paid on February 6, 2026 to shareholders of record effective January 23, 2026.