SEDAR Interim Financial Statements

INEO Tech Corp. Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian Dollars) MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING Management of the Company is responsible for the preparation of the accompanying unaudited interim condensed consolidated financial statements. The unaudited interim condensed consolidated financial statements have been prepared using accounting policies in compliance with International Financial Reporting Standards (“IFRS”) for the preparation of interim condensed financial statements and are in accordance with International Accounting Standard (“IAS”) 34 – Interim Financial Reporting. The Company’s auditor has not performed a review of these interim condensed consolidated financial statements in accordance with the standards established by the Canadian Institute of Chartered Professional Accountants for a review of interim financial statements by an entity’s auditor. INEO Tech Corp. Interim Condensed Consolidated Statements of Financial Position (Unaudited - Expressed in Canadian dollars) 3 Notes December 31, 2025 June 30, 2025 Assets Current assets Cash 1,919,567 110,909 Accounts and other receivables 4 235,564 205,559 Due from related party 16 209,768 206,625 Prepaid expenses 6 44,555 7,523 Inventory 5 231,026 267,012 2,640,480 797,628 Non-current assets Equipment 7 1,562,927 1,820,376 Right-of-use asset 19 708,733 26,300 2,271,660 1,846,676 Total assets 4,912,140 2,644,304 Liabilities and Shareholders' Equity (Deficiency) Current liabilities Payables and accrued liabilities 8 2,329,727 1,800,012 Loans payable to related parties 9 212,500 206,216 Interest payable 10,11,12,13 328,992 272,165 Note payable 10 951,498 892,752 Current portion of the bank loan payable 12 62,217 61,988 Due to related parties 16 130,690 12,036 Current portion of lease liability 20 93,294 30,399 Government grant 13 120,000 - 4,228,918 3,275,568 Non-current liabilities Convertible debentures 11 93,955 87,718 Non-current portion of the bank loan payable 12 215,677 246,880 Non-current portion of lease liability 20 617,312 - Government grant 13 - 120,000 926,944 454,598 Total liabilities 5,155,862 3,730,166 Shareholders' equity (deficiency) Share capital 14 21,988,315 19,403,380 Reserves 14 1,494,940 1,339,258 Equity conversion feature on convertible debentures 11 92,140 92,140 Deficit (23,819,117) (21,920,640) (243,722) (1,085,862) Total liabilities and shareholders' equity 4,912,140 2,644,304 The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements. Nature and continuance of operations (Note 1). INEO Tech Corp. Interim Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited - Expressed in Canadian dollars) 4 For the three months ended December 31 For the six months ended December 31 Notes 2025 2024 2025 2024 Sales 22,23 170,985 293,254 459,156 571,958 Cost of sales 22 (101,334) (140,414) (263,467) (306,729) Gross profit 69,651 152,840 195,689 265,229 Expenses General and administrative 15 575,674 531,328 1,014,123 910,235 Selling 260,223 167,699 422,374 334,583 Research and development 207,492 223,472 432,333 371,315 1,043,389 922,499 1,868,830 1,616,133 Net Income (loss) before other income (expenses) (973,738) (769,659) (1,673,141) (1,350,904) Other Income (Expenses) Interest expense, net 9,10,11,12,13,20,21,22 (93,418) (100,717) (183,125) (191,923) Foreign e --- xchange gain (loss) 22 (13,309) (24,362) (22,105) (27,317) Miscellaneous income (expenses), net 22 (5,599) 1,154 (20,106) (2,113) (112,326) (123,925) (225,336) (221,353) Loss and comprehensive loss (1,086,064) (893,584) (1,898,477) (1,572,257) Weighted average number of common shares outstanding - basic and diluted 171,227,235 90,601,232 171,227,235 90,601,232 Basic and diluted loss per share (0.006) (0.010) (0.011) (0.017) The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements. INEO Tech Corp. Interim Condensed Consolidated Statements of Shareholders’ Equity (Deficiency) (Unaudited - Expressed in Canadian dollars) 5 Notes Number of shares Amount Equity portion of convertible debentures Warrant reserves Share-based payment reserves Deficit Total shareholder s' equity Balance, June 30, 2024 76,143,709 $14,968,97 9 $92,140 $271,954 $892,118 $(18,334,054) $(2,108,863) Share issuance during the year: Private placement 14 80,000,000 4,000,000 - - - - 4,000,000 Settlement of convertible notes 11,14,2 1 6,201,975 434,401 - 434,401 Share-based payment 14 - - - - 175,186 175,186 Net loss and comprehensive loss - - - - (3,586,586) (3,586,586) Balance, June 30, 2025 162,345,68 4 19,403,380 92,140 271,954 1,067,304 (21,920,640) (1,085,862) Share issuance during the year: Private placement 14 162,345,68 4 2,584,935 - - - - 2,584,936 Share- based payment 14 - - - - 155,682 - 155,682 Net loss and comprehensive loss - - - - - (1,898,477) (1,898,477) Balance, December 31, 2025 324,691,36 8 $21,988,31 5 $92,140 $271,954 $1,222,986 $(23,819,117) $(243,722) The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements. INEO Tech Corp. Interim Condensed Consolidated Statements of Cash Flows (Unaudited - Expressed in Canadian dollars) 6 For the six months ended December 31 2025 2024 Cash flows used in operating activities: Net loss for the period $(1,898,477) $(1,572,257) Items not involving cash: Amortization on equipment, and intangibles 255,758 226,673 Share-based payment 155,682 66,426 Interest expense 189,131 189,562 Accretion on convertible debentures 6,237 43,497 Amortization of right-of-use asset 50,739 15,526 Interest income on notes receivable - (1,875) Derecognition of asset/write off 42,052 - Bad debts expense - 5,430 Change in non-cash operating working capital: Accounts and other receivables (30,005) (90,537) Due from related party (3,143) - Prepaid expenses (37,032) (10,431) Inventory 35,986 24,328 Payables and accrued liabilities 498,092 119,658 (734,980) (984,000) Cash flows used in investing activities: Purchase of equipment (40,361) (509,713) (40,361) (509,713) Cash flows provided by (used in) financing activities: Loan received - 19,517 Repayment of bank loan (30,974) (39,833) Interest paid (27,074) (21,420) Payments for lease obligations (61,542) 178,797 Advances from related parties 130,690 (88,198) Repayment to related parties (12,036) 3,000,000 Proceeds from issuance of shares 2,584,935 (29,772) 2,583,999 3,019,091 Change in cash 1,808,658 1,525,378 (Bank indebtedness) Cash, beginning of period 110,909 (17,561) Cash, end of period $1,919,567 $1,507,817 Supplemental cash flow information (Note 21). The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ende --- d December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 7 1. NATURE AND CONTINUANCE OF OPERATIONS INEO Tech Corp. (the “Company” or “INEO”) is a Canadian company incorporated under the laws of the Province of British Columbia on March 4, 2008. The Company’s shares trade on the TSX Venture Exchange (“TSX-V”) under the symbol ‘INEO.’ The Company’s corporate head office and records office are located at 301 – 19055 54 Avenue, Surrey, B.C. V3S 4R1. INEO is the inventor and operator of the INEO Media Network for retailers, which provides retail analytics and targeted advertising through its cloud-based IoT (Internet of Things) and AI (Artificial Intelligence) technology. The Company operates the INEO Media Network using a SaaS-based model for retail stores. These consolidated financial statements, including comparatives (the ’Financial Statements’), have been prepared in accordance with IFRS Accounting Standards (“IFRS”) and interpretations of the IFRS Interpretations Committee (“IFRIC”) with the going concern assumption, which assumes that the Company will continue operations for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations. The Company’s ability to realize its assets and discharge its liabilities depends upon the Company obtaining the necessary financing and, ultimately, upon its ability to achieve profitable operations. For significant expenditures, the Company will depend on external capital. Such external capital will include the issuance of additional equity shares. There can be no assurance that capital will be available, as necessary, to meet the Company’s operating commitments and development plans. The issuance of additional equity securities by the Company may result in the dilution of current shareholders’ equity interests. The Company’s future capital requirements will depend on many factors, including the cash flows from its operating activities, costs of research and developing its products, operating costs, the current capital market environment, and global market conditions. The continued operations of the Company are dependent on its ability to generate revenues, develop a sufficient financing plan, receive continued financial support from related parties, complete sufficient public equity financing, and ultimately generate profitable operations in the future. The Company has no assurance that it will be successful in its efforts. If the Company cannot obtain financing in the amounts and on terms deemed acceptable, the business's future success could be adversely affected. These conditions result in material uncertainties, which may cast significant doubt on whether the Company will continue as a going concern. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 8 2. BASIS OF CONSOLIDATION AND PREPARATION These Financial Statements have been prepared on a historical cost basis except for certain financial instruments, measured at fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting, except for the cash flow information. These Financial Statements, except as otherwise stated, are presented in Canadian dollars and include the accounts of the Company and its wholly owned subsidiaries, each having a Canadian functional currency --- . Entity Parent Country of Incorporation Effective Interest INEO Solutions Inc. INEO Tech Corp. Canada 100% FG Manufacturing Inc. (“FG”) INEO Solutions Inc. Canada 100% These Financial Statements include the accounts of the Company and its subsidiaries of which it has control. IFRS 10 states that an investor has control over an investee if and only if the investor has the power over the investee and is able to use it to influence the amount of the investor’s returns. And that the investor has exposure or rights, to variable returns from its involvement with the investee. All intercompany balances, transactions, and any unrealized gains and losses arising from intercompany transactions have been eliminated. Use of estimates and judgments The preparation of these Financial Statements requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets, liabilities, revenues, and expenses. Estimates and associated assumptions applied in determining asset or liability values are based on historical experience and various other factors, including other sources that are believed to be reasonable under the circumstances but are not necessarily readily apparent or recognizable when such estimate or assumption is made. Actual results may differ from these estimates. The information about significant areas of estimation uncertainty considered by management in preparing the Financial Statements is as follows: Inventories Inventories are valued at the lower of cost and net realizable value. Cost of inventory includes cost of purchase (purchase price, import duties, transport, handling, and other costs directly attributable to the acquisition of inventories) and other costs incurred in bringing the inventories to their present location and condition. Net realizable value for inventories is the estimated selling price in the ordinary course of business, less the estimated completion costs and costs necessary to make the sale. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 9 2. BASIS OF CONSOLIDATION AND PREPARATION (CONTINUED) Use of estimates and judgments (continued) Share-based payment Management assesses the fair value of stock options granted in accordance with the accounting policy stated in Note 3. The fair value of stock options granted is measured using the Black-Scholes option pricing model, which was created to estimate the fair value of freely tradable, fully transferable options. The Company’s stock options have characteristics significantly different from those of traded options, and changes in the highly subjective input assumptions can materially affect the calculated values. Income taxes Tax provisions are based on enacted or substantively enacted laws. Changes in those laws could affect amounts recognized in profit or loss both in the period of change, which would include any impact on cumulative provisions, and in future periods. Deferred tax assets (if any) are recognized only to the extent it is considered probable that those assets will be recoverable. This involves assessing when those deferred tax assets are likely to reverse and a judgment as to whether or not there will be sufficient taxable profits available to offset the tax assets when they do reverse. This requires assumptions regarding future profitability and is t --- herefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets and the amounts recognized in profit or loss in the year in which the change occurs. The information about significant areas of judgment considered by management in preparing these Financial Statements is as follows: Convertible Debentures The component parts of convertible debentures are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. The classification of the conversion option as equity requires significant judgement in assessing whether the settlement would result in a fixed amount of cash for a fixed number of equity instruments. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 10 3. MATERIAL ACCOUNTING POLICY INFORMATION In preparing these Financial Statements, the significant accounting policies and judgements made by management in applying the Company’s significant accounting policies and key sources of estimation uncertainty were the same as those that applied to the Company’s audited financial statements for the year ended June 30, 2025. Interim results are not necessarily indicative of the results expected for the financial year. Annual results may differ from interim estimates. The significant judgments made by management applied in the preparation of these Financial Statements are consistent with those applied and disclosed in the Company's audited consolidated financial statements for the year ended June 30, 2025. 4. ACCOUNTS AND OTHER RECEIVABLES December 31, 2025 June 30, 2025 Gross trade and accounts receivable $233,509 $187,311 Less: estimated credit losses (8,591) (8,591) Net trade accounts receivable 224,918 $178,720 GST receivable 10,646 26,839 Total $235,564 $205,559 Reconciliation of expected credit loss is as follows: December 31, 2025 June 30, 2025 Beginning balance $8,591 $8,591 Written off receivables - (8,304) Bad debts expense - 8,304 Ending balance $8,591 $8,591 5. INVENTORY Inventory of finished goods held by the Company as at December 31, 2025, was $231,026 (June 30, 2025 - $267,012). Finished goods inventory consists of EAS products held for resale. During the six months ended December 31, 2025, the Company recognized $151,366 of inventory in cost of sales (December 31, 2024 - $99,145). 6. PREPAID EXPENSES The components of prepaid expenses are as follows: December 31, 2025 June 30, 2025 Prepaid insurance $3,152 $2,186 Security deposit 26,007 1,363 Other prepaids 15,396 3,974 TOTAL $44,555 $7,523 Other prepaid consist of advances to contractors and suppliers for goods and services delivered subsequent to the period ending December 31, 2025. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 11 7. EQUIPMENT The movements in the balance of equipment follows: Furniture and Equipment R&D Equipment Computer Hardware Motor Vehicle Welcoming Pedestals -Installed Units WIP Installed Units Total Costs: Balance, June 30, 2024 $151,930 - $80,327 $13,800 $1,975,714 $237,328 $2,459,099 Additions 8,560 3,452 - - 474 --- ,387 284,994 771,393 Transfer of WIP to Installed units - - - - 260,432 (260,432) - Balance, Jun 30, 2025 160,490 3,452 80,327 13,800 2,710,533 261,890 3,230,492 Derecognition/write off - - - - (132,449) (42,052) (174,501) Additions - - - - 40,361 - 40,361 Transfer of WIP to installed units - - - - 22,298 (22,298) - Balance, December 31, 2025 160,490 3,452 80,327 13,800 2,640,743 197,540 3,096,352 Accumulated Depreciation: Balance, June 30, 2024 119,193 - 67,079 7,408 738,228 - 931,908 Amortization 15,544 321 2,590 1,167 458,586 - 478,208 Balance, Jun 30, 2025 134,737 321 69,669 8,575 1,196,814 - 1,410,116 Derecognition/write off - - - - (132,449) - (132,449) Amortization 5,408 706 1,122 501 248,021 - 255,758 Balance, December 31, 2025 140,145 1,027 70,791 9,076 1,312,386 - 1,533,425 Net Book Value: June 30, 2025 $25,753 - $10,658 $5,225 $1,513,719 $261,890 $1,820,376 December 31, 2025 $20,345 $2,425 $9,536 $4,724 $1,328,357 $197,540 $1,562,927 INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 12 8. PAYABLES AND ACCRUED LIABILITIES The components of accounts payable and accrued liabilities are as follows: December 31, 2025 June 30, 2025 Accounts payable $1,359,533 $921,123 Accrued liabilities 970,194 878,889 Total $2,329,727 $1,800,012 Accounts payable are generally non-interest bearing and are settled on 30 to 60-day payment terms. Accrued liabilities include accruals for remuneration and benefits, other expenses billed, and collections received from customers for sales delivered after the reporting date. Accrued liabilities are generally settled within 12 months from year-end. 9. LOANS PAYABLE TO RELATED PARTIES The Company entered into related party transactions with two officers. On December 16, 2016, INEO received $100,000 as a loan, bearing an annual interest rate of 12.5% from an officer of the Company. The related party loan is due on demand and unsecured and proceeds were used for the Company’s operating expenses. The loans balance as at December 31, 2025, amounted to $212,500 (June 30, 2025 - $206,216). During the six months ended December 31, 2025, the Company incurred $6,284 in interest expense (December 31, 2024 – $9,467). The reconciliation of opening and closing balances of loans payable are as follows: Amount Balance, June 30, 2024 $249,365 Interest accrued 15,862 Additional loan 20,000 Loan repayment (74,500) Interest paid (4,511) Balance, June 30, 2025 206,216 Additional loan - Interest accrued 6,284 Balance, December 31, 2025 $212,500 INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 13 10. NOTE PAYABLE On November 17, 2022, INEO received a $1,000,000 unsecured promissory note bearing an annual interest rate of 12.0% from a third party. Repayment of this note is due November 17, 2025. In connection with the note, the Company issued 1,428,571 common shares with a fair value of $171,428. The shares issued were considered debt issuance costs resulting in a discount and amortized using the effective interest method over the credit term of three (3) years with an effective annual interest rate of 19.60%. Pursuant to the agreement dated June 18, 2025, the Company amended its unsecured promissory note, extending the maturity date to May 17, 2026, and red --- ucing the interest rate to 10%. As part of this debt restructuring, BDC subordinated its previously held General Security Agreement in favor of the lender effective June 18, 2025. The recalculated effective interest is 23.62% over the remaining term of the note. The Company concluded that this was a non-substantive loan modification, and it recorded a modification gain of $80,673 during the year ended June 30, 2025. During the six months ended December 31, 2025, the Company incurred $109,156 in interest expense (December 31, 2024 – $90,765). The details of the outstanding note as at December 31, 2025, are as follows: Balance as at December 31, 2025 Maturity date Interest rate Accrued Interest Current portion Total Note - $1,000,000 17-May-26 10.00% - $1,000,000 $1,000,000 Interest payable 303,754 - 303,754 Discount on note - 32,171 32,171 Loan modification - (80,673) (80,673) Total $303,754 $951,498 $1,255,252 Balance as at June 30, 2025 Maturity date Interest rate Accrued Interest Current portion Total Note - $1,000,000 17-May-26 10.00% - $1,000,000 $1,000,000 Interest payable 253,344 - 253,344 Discount on note - (26,575) (26,575) Loan modification - (80,673) (80,673) Total $253,344 $892,752 $1,146,096 The reconciliation of opening and closing balances of note payable follows: Note Payable Accrued interest Total Balance, June 30, 2024 $908,566 $134,166 $1,042,732 Interest expense 64,859 119,178 184,037 Interest paid - - - Gain on loan modification (80,673) - (80,673) Balance as at June 30, 2025 $892,752 $253,344 $1,146,096 Interest expense 58,746 50,410 109,156 Interest paid - - - Balance as at December 31, 2025 $951,498 $303,754 $1,255,252 INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 14 11. CONVERTIBLE DEBENTURES On January 11, 2024, the Company announced an offering of a non-brokered private placement of unsecured convertible debenture in the aggregate principal amount of up to $700,000. Each Debenture will be convertible into common shares in the capital of the Company (each, a “Share”) at a conversion price of $0.085 per Share for the first year from the date of issuance and thereafter at an adjusted conversion price of $0.10 per Share until the date which is three (3) years from the date of issuance (the “Maturity Date”) and bears interest at the rate of 12.0% per annum for a period expiring on the Maturity Date. Upon a change of control, the Company may also redeem the principal amount and any unpaid interest of the Debenture in cash, without penalty, at any time before the Maturity Date by providing a ten (10) day notice period to the debenture holder by way of a written notice. In connection with the Offering, the Company paid finders’ fees to certain eligible finders, as permitted by the policies of the TSX Venture Exchange (the “Exchange”). The Shares issuable upon the conversion of the Debenture will be subject to a statutory hold period of four (4) months plus a day from the date of issuance in accordance with applicable securities legislation. On January 31, 2024, the Company issued $510,000 convertible debenture with net proceeds of $485,680. The Company incurred $24,320 on finder’s fee and issued 286,116 share warrants. The warrants were valued $13,713 using the Black Scholes option pricing model with the following assumptions: volatility rate of 106.0%, risk-free rate of 3.77%, w --- eighted average life of 3 years. Each warrant entitles the holder to purchase one common share at a price of $0.085 per share for a period of three years. On February 16, 2024, the Company issued $60,000 convertible debenture with net proceeds of $55,200. The Company incurred $4,800 on finder’s fee and issued 56,470 share warrants. The warrants were valued $2,946 using the Black Scholes option pricing model with the following assumptions: volatility rate of 106.0%, risk-free rate of 4.05%, weighted average life of 3 years. Each warrant entitles the holder to purchase one common share at a price of $0.085 per share for a period of three years. The Company allocated $92,140 to the equity component of the debenture. The finder’s fee and share warrants issued were considered part of the debt issuance cost resulting to a discount and amortized using the effective interest method over the credit term of three (3) years with an effective annual interest rate of 17%. During the six months ended December 31, 2025, the Company incurred $12,671 in interest expense (December 31, 2024 – $57,912). During the year ended June 30, 2025, 6,201,975 shares were issued as redemption of $462,000 convertible debt and $54,047 interest by conversion. As of the six months ended December 31, 2025, the convertible debentures had a remaining principal balance of $108,000 (June 30, 2025 - $108,000). Convertible Debentures Accrued Interest Interest Payable Balance, June 30, 2024 $436,968 $34,116 $(133,032) Interest on convertible debentures - 38,242 - Accretion on convertible debentures 31,104 - 31,104 Settlement of convertible debentures (380,354) (54,047) 81,646 Balance, June 30, 2025 87,718 18,311 (20,282) Interest on convertible debentures - 6,434 - Accretion on convertible debentures 6,237 - 6,237 Balance, December 31, 2025 $93,955 $24,745 $(14,045) Convertible debentures, equity component, December 31, 2025 $92,140 INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 15 12. BANK LOAN PAYABLE On September 14, 2023, the Company received a secured bank loan amounting to $350,000 from the Business Development Bank of Canada (BDC). The loan is payable in 72 equal monthly installments starting July 31, 2024, to June 30, 2030. The interest on the loan is equivalent to BDC’s Floating Base Rate plus a variance of 7.50% per year. During the six months ended December 31, 2025, the BDC’s Floating Base rate is at 6.55% and the Company incurred $20,382 in interest expense (December 31, 2024 - $27,256). Under the terms of existing debt agreements, the following are the three material covenants: (i) Guarantee of the CEO for 5.5% of the Loan amount outstanding on the date BDC demands payment under this guarantee; (ii) Guarantee of the founder and CFO for 16.8% of the Loan amount outstanding on the date BDC demands payment under this guarantee and; (iii) General Security Agreement from the Company, providing a first security interest in all present and after-acquired personal property, except consumer goods, subject only to priority on inventory and receivables to lender extending line of credit. On June 28, 2025, BDC subordinated its security interest to another lender as part of a debt restructuring by the Company. On October 23, 2024, the Company’s Business Line of Credit with Toronto-Dominion (TD) bank was converted to a business loan amounti --- ng to $19,517. The loan is payable in 60 equal monthly installments starting November 23, 2024 to October 23, 2029. The interest on the loan is equivalent to TD’s Prime Rate plus 3.00% per annum. During the six months ended December 31, 2025, the TD’s prime rate is at 4.45% and the Company incurred $642 in interest expense (December 31, 2024 - $287). Balance as at December 31, 2025 Maturity date Interest rate Current portion Long-term portion Total Bank loan payable - BDC 30-Jun-30 14.05% $58,320 $204,120 $262,440 Bank loan payable - TD 23-Oct-29 7.45% 3,897 11,557 15,454 Interest Payable 34,117 53,330 87,447 Total $96,334 $269,007 $365,341 Balance as at June 30, 2025 Maturity date Interest rate Current portion Long-term portion Total Bank loan payable - BDC 30-Jun-30 14.55% $58,320 $233,280 $291,600 Bank loan payable - TD 23-Oct-29 8.00% 3,668 13,600 17,268 Interest Payable 39,515 72,014 111,529 Total $101,503 $318,894 $420,397 The reconciliation of the opening and closing balances of the bank loan follows: Principal Interest Total Balance, June 30, 2024 $350,000 $4,763 $354,763 Proceeds 19,517 - 19,517 Interest expense - 50,769 50,769 Payment (60,649) (55,532) (116,181) Balance, June 30, 2025 $308,868 - $308,868 Interest Expense - 21,024 21,024 Payment (30,974) (21,024) (51,998) Balance, December 31, 2025 $277,894 - $277,894 INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 16 13. GOVERNMENT GRANT Principal Interest Total Balance, June 30, 2024 $120,000 $508 $120,508 Interest Expense - 5,992 5,992 Interest paid - (5,990) (5,990) Balance, June 30, 2025 120,000 510 120,510 Interest Expense - 3,008 3,008 Interest paid - (3,025) (3,025) Balance, December 31, 2025 $120,000 $493 $120,493 During the year ended June 30, 2021, FG Manufacturing and INEO Solutions applied and received $60,000 each under the Canada Emergency Business Account (CEBA) program which has no repayment terms and non- interest bearing during the initial term until January 18, 2024. The Company has estimated the initial carrying value of each initial CEBA loan at $26,880 and additional loans at $15,408, using a discount rate of 15%, which was the estimated rate for a similar loan without the interest-free component. The difference will be accreted to each CEBA loan liability over the term of the CEBA Loan and offset to other income on the statements of loss and comprehensive loss. On January 18, 2024, the remaining outstanding loan balance was converted into a term loan at a fixed interest rate of 5% per annum, due on December 26, 2026. Additionally, repaying the balance of the loan on or before said date will result in loan forgiveness of up to 33% or up to $20,000. Furthermore, CEBA loan holders who submit a refinancing loan application to their financial institution provider by January 18, 2024, requiring a grace period can still qualify for partial loan forgiveness if the outstanding principal of their CEBA loan, plus any applicable interest is repaid by March 28, 2024. The loan was not paid by the Company and did not qualify for the $20,000 loan forgiveness. During the six months ended December 31, 2025, the total interest expense recognized for the CEBA grants amounted to $3,008 (December 31, 2024 - $3,000). 14. SHARE CAPITAL AND RESERVES Authorized share capital The Company's authorized share capital consists of an unlimited numb --- er of common shares without par value. Shares held in escrow On January 24, 2023, all common shares held in escrow were released to shareholders. As of December 31, 2025, nil shares were held in escrow. (June 30, 2025 – nil shares held in escrow). Issued share capital The Company issued 5,990,000 common shares at $0.04 per share, with total consideration of $239,600 and 156,355,684 common shares at $0.015 per share, with total consideration $2,345,335.26 during the six months ended December 31, 2025. The Company issued 80,000,000 common shares at $0.05 per share, with total consideration of $4,000,000. In addition, 6,201,975 shares were issued as redemption of $462,000 convertible debt and $54,047 interest by conversion during the year ended June 30, 2025. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 17 14. SHARE CAPITAL AND RESERVES (CONTINUED) Stock options The Company has adopted a stock option plan that allows the Company to issue options to certain directors, officers, employees, and consultants to acquire up to 10% of the issued and outstanding common stock. The exercise price of each option cannot be less than the market price of the Company's stock as calculated on the date of grant. The options can be granted for a maximum term of 10 years. Stock options granted under the plan vest immediately subject to vesting terms, which may be imposed at the directors' discretion. The summary of changes in stock options during the six months ended December 31, 2025, and the year ended June 30, 2025, are as follows: December 31, 2025 June 30, 2025 Number of options Weighted average exercise price Number of options Weighted average exercise price Options outstanding, beginning 15,689,613 $0.10 7,375,863 $0.19 Options granted - - 9,730,000 0.06 Options forfeited (968,750) $0.10 (1,416,250) 0.08 Options outstanding, ending 14,720,863 $0.10 15,689,613 $0.10 Options exercisable, ending 4,854,613 $0.18 4,959,613 $0.18 Details of options outstanding as at December 31, 2025, are as follows: Expiry date Number of options Weighted average exercise price Weighted average contractual life Number of Options exercisable January 8, 2028 175,863 0.09 2.02 175,863 April 15, 2030 2,250,000 0.22 4.29 2,250,000 April 15, 2030 500,000 0.35 4.29 500,000 October 18, 2030 100,000 0.05 4.80 100,000 June 18, 2031 225,000 0.05 5.47 225,000 February 28, 2033 1,965,000 0.11 7.17 1,057,500 September 18, 2033 530,000 0.05 7.72 265,000 August 28, 2034 1,125,000 0.05 8.66 281,250 February 3, 2035 7,550,000 0.07 9.10 - May 27, 2035 300,000 0.05 9.41 - 14,720,863 0.10 6.00 4,854,613 During the six months ended December 31, 2025, the Company recognized share-based payment related to stock options of $155,682 (December 31, 2024 - $66,426). The fair value of stock options granted was determined using the Black-Scholes Option Pricing Model using the following assumptions: December 31, 2025 June 30, 2025 Expected life of options 10 years 10 years Annualized volatility 114% 114% Risk-free interest rate 2.99% 2.99% Dividend rate 0% 0% Weighted average fair value per option granted 0.06 0.07 Stock price 0.02 0.05 INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 18 14. SHARE CAPITAL AND RESERVES (CONTINUED) --- Warrants The summary of changes in warrants during the six months ended December 31, 2025, and the year ended June 30, 2025, are as follows: December 31, 2025 June 30, 2025 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Warrants outstanding, beginning 8,528,807 $0.09 8,528,807 $0.18 Warrants issued - - - - Broker warrants issued - - - - Warrants expired (8,186,221) 0.18 - - Warrants outstanding, ending 342,586 0.09 8,528,807 0.09 Warrants exercisable, ending 342,586 $0.09 8,528,807 $0.09 Details of warrants outstanding as at December 31, 2025, are as follows: Expiry date Number of warrants Exercise price Number of warrants exercisable 31-Jan-27 286,116 0.09 286,116 16-Feb-27 56,470 0.09 56,470 342,586 0.09 342,586 15. BREAKDOWN OF EXPENSES General and administrative expenses are composed of the following: For the three months ended December 31 For the six months ended December 31 2025 2024 2025 2024 Remuneration and benefits (Note 18) $155,224 $294,514 $321,253 $452,930 Amortization and depreciation (Note 4, 9, 21) 155,756 126,953 306,497 242,199 Office expenses 55,208 37,532 92,643 74,924 Share-based payment (Note 16,18) 70,824 30,186 142,936 53,618 Accounting and legal 100,198 10,729 83,163 22,096 Rent (Note 22) 19,687 15,261 38,066 38,291 Insurance 10,357 10,289 20,988 19,563 Bad debt (Note 5) - 5,430 - 5,430 Lease interest (Note 22) 8,420 434 8,577 1,184 Total $575,674 $531,328 $1,014,123 $910,235 INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 19 16. RELATED PARTY TRANSACTIONS Key management personnel: Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers. Amounts due to or from related parties are non-interest-bearing and unsecured unless specified. During the six months ended December 31, 2025, the Company’s total advances received from the related parties were $130,690 (June 30, 2025 - $190,833). Repayments made to the related parties were a total of $12,036 for the six months ended December 31, 2025 (June 30, 2025 - $212,495). As at December 31, 2025, the Company has $130,690 due to the officers of the Company (June 30, 2025 - $12,036). The Company recognized loss prevention revenue of $3,143 (December 31, 2024 – $Nil) from a related party by virtue of common director and significant influence. As at December 31, 2025, trade receivables from the related party were $209,768 (June 30, 2025 - $206,625). During the six months ended December 31, 2025, and 2023, the Company incurred the following key management compensation: For the three months ended December 31 For the six months ended December 31 2025 2024 2025 2024 Remuneration and benefits $125,000 $106,250 $250,000 $312,500 Share-based payment 63,954 24,035 126,143 49,997 Total $188,954 $130,285 $376,143 $362,497 17. CAPITAL MANAGEMENT The Company considers the items in shareholders’ equity (deficiency) as capital, which was $243,722 deficit at December 31, 2025 (June 30, 2025 - $1,085,862 deficit). The Company’s objectives when managing capital are to support the further advancement of the Company’s business object --- ives and existing product lines, as well as to ensure that the Company can meet its financial obligations as they become due. The Company manages its capital structure to maximize its financial flexibility, adjusting it in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. The Company relies on the expertise of the Company’s management to sustain the future development of the business. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the Company's relative size, is reasonable. The approach to capital management has not changed since the prior year, and the Company is not subjected to externally imposed capital requirements. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 20 18. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Fair value of financial instruments The Company’s financial instruments consist of cash, bank indebtedness, accounts and other receivable, note receivable, payables and accrued liabilities, due to related parties, loans payable to related parties, note payable, interest payable, convertible debentures, bank loan payable, and government grants. Financial instruments recorded at fair value on the statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are as follows: • Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly (i.e., as prices) or indirectly (i.e., derived from prices); and • Level 3: Inputs that are not based on observable market data Cash under the fair value hierarchy is based on Level 1 quoted prices in active markets for identical assets or liabilities. Accounts and other receivables, note receivable, payables and accrued liabilities, due to related parties and loans payable approximate their fair value due to their short-term maturities. The fair value of convertible debentures, note payable, bank loans payable, and government grants also approximates the carrying value since they are discounted using market rates. Financial and capital risk management The Company examines the various financial instruments and risks to which it is exposed and assesses the impact and likelihood of those risks. These risks include market risk, credit risk, and liquidity risk. These risks are reviewed and monitored by the Board of Directors. The Board of Directors has overall responsibility for the determination of the Company’s risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility. Discussions of risks associated with financial assets and liabilities are detailed below. a) Market risk Market risk is the risk that a financial instrument's fair value or future cash flows will fluctuate because of changes in market prices or prevailing co --- nditions. Market risk comprises three types of risk: currency risk, interest rate risk, and price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 21 18. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Financial and capital risk management (Continued) a) Market risk (continued) (i) Currency risk Currency risk is the risk of change in profit or loss that arises from fluctuations in foreign exchange rates and the degree of volatility of these rates. The Company’s exposure to the risk of changes in foreign exchange rates relates to its operational activities. The Company does not use derivative instruments to reduce its exposure to foreign currency risk. The Company’s international sales and purchases of goods and services from foreign companies are denominated in US Dollars and are exposed to foreign exchange fluctuations. Due to these fluctuations, operating results may differ materially from expectations, resulting in significant gains and losses on the remeasurements associated with these transactions. The Company’s approach to management of foreign currency risk has not changed materially from that of the year ended June 30, 2025. As at December 31, 2025, and June 30, 2025, a summary of the quantitative information of the exposure due to foreign currencies is provided as follows: December 31, 2025 June 30, 2025 in US Dollar in US Dollar Cash $1,044,969 $7,116 Accounts receivable 125,815 239,865 Prepaid expenses 10,680 2,600 Accounts payable and accrued liabilities (295,035) (281,463) Net assets denominated in foreign currency $886,429 $(31,882) The most significant closing exchange rates and the approximate average exchange rates of Canadian Dollar per US dollar used in these Financial Statements were as follows: December 31, 2025 June 30, 2025 Currency Closing Average Closing Average U.S. Dollar 1.39 1.40 1.36 1.40 The Company estimates that a 10% increase (decrease) in applicable U.S. dollar exchange rates would impact loss and comprehensive loss by $121,494 (June 30, 2025 - $4,350). (ii) Interest rate risk Interest rate risk is the risk that future cash flows will fluctuate due to changes in market interest rates. As at December 31, 2025, the Company is exposed to interest rate risks primarily on the floating interest rate corresponding to $262,440 (June 30, 2025 - $291,600) long-term bank loan with BDC and on the prime rate corresponding to $15,454 (June 30, 2025 - $19,517) long-term loan with TD bank (see Note 12). A 10% change in interest rates would not result in a material change in profit or loss. The Company’s approach to management of interest risk has not changed materially from that of the year ended June 30, 2025. (iii) Price risk Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. The Company does not hold any securities or investments which could expose it to stock prices volatility. The Company’s approach to management of price risk has not changed materially from that of the year ended June 30, 2025. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for --- the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 22 18. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Financial and capital risk management (Continued) b) Credit risk Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. All the Company’s cash is held through Canadian chartered banks; accordingly, the Company’s exposure to credit risk is limited. The Company’s GST recoverable are refunds due from the Government of Canada, and the exposure to credit risk on these amounts is considered limited. The Company’s accounts receivable consists of amounts due from various customers. The maximum exposure to credit risk is equal to the carrying value of accounts receivable. The business models of the Company’s respective segments require credit risk analysis specific to each business line. The Company’s historic rate of bad debts is low. The Company’s approach to management of credit risk has not changed materially from that of the year ended June 30, 2025. The due date of these amounts can vary by agreement but in general, balances over 30 days are considered past due. The aging of the receivables is as follows: December 31, 2025 June 30, 2025 0 - 30 days $15,116 $90,557 30 - 90 days 36,828 7,948 Over 90 days 181,565 88,806 Total receivables before allowance for credit losses 233,509 187,311 Less: allowance for credit losses (8,591) (8,591) Receivables $224,918 $178,720 The Company applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits using the lifetime expected loss provision for all accounts receivable. To measure the expected credit losses, accounts receivable are assessed primarily on days past due combined with the Company’s knowledge of past bad debts. During the six months ended December 31, 2025, expected credit losses for the Company were $Nil (December 31, 2024 - $Nil). c) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. As at December 31, 2025, the Company has a cash balance of $1,919,567 (June 30, 2025 – $110,909) and current liabilities balance of $4,228,918 (June 30, 2025 – $3,275,568). The Company manages its liquidity risk by attempting to maintain sufficient cash balances to enable settlement of transactions on the due date. As the Company has limited sources of revenue, additional financing is necessary to accomplish its long-term strategic objectives. The Company’s approach to management of liquidity risk has not changed materially from that of the year ended June 30, 2025. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 23 18. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Financial and capital risk management (Continued) c) Liquidity risk (continued) The following table summarizes the amount and the contractual maturities of the principal portion of significant financial liabilities on an undiscounted basis as at December 31, 2025: 2026 2027 2028 2029 2030 Total Convertible debentures - $108,000 - - - $108,000 Accounts payables and accrued liabilities 2,329,727 - - - - 2,329,727 Note payable 1,000,000 - - - - 1,000,000 Bank loan 31,073 62,364 62,673 63,009 58,775 277,894 Government grant - 120,000 - - - 120,000 --- Total $3,360,800 $290,364 $62,673 $63,009 $58,775 $3,835,621 19. RIGHT-OF-USE ASSET On March 6, 2020, the Company entered into a 5-year lease agreement for leased premises in Surrey, British Columbia, commencing April 1, 2020, and ending on March 9, 2025. The minimum monthly base rent for years 1 to 5 of the 5-year lease is $3,290 for year 1, $3,360 for year 2, $3,430 for year 3, $3,500 for year 4, and $3,570 for year 5, respectively. In accordance with IFRS 16, the Company recognized a right-of-use asset of $155,260 as at March 6, 2020, equal to the present value of all remaining lease payments discounted at an incremental borrowing rate of 12.5%. On February 6, 2025, the Company entered into a modification of lease agreement with the landlord to extend the original lease for a period of six months. The minimum monthly base rent is $7,643 for the six months ending on October 31, 2025. The Company recognized a right-of-use asset and recalculated the lease liability over the remaining term. Upon the expiration of the lease term on October 31, 2025, the Company derecognized the related right‑of‑use asset and lease liability in accordance with IFRS 16. The remaining carrying amounts of the ROU asset and lease liability were derecognized from the statement of financial position. No further obligations exist in respect of this lease as at December 31, 2025. On October 23, 2025, the Company entered into a new 5-year lease agreement for leased premises in Surrey, British Columbia, commencing November 1, 2025 and ending on October 31, 2030. The minimum monthly base rent for years 1 to 5 of the 5-year lease is $15,485 for year 1, $16,261 for year 2, $17,068 for year 3, $17,922 for year 4, and $18,822 for year 5, respectively. In accordance with IFRS 16, the Company recognized a right-of-use asset of $733,172 as at October 23, 2025, equal to the present value of all remaining lease payments discounted at an incremental borrowing rate of 14.05%. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 24 19. RIGHT-OF-USE ASSET (CONTINUED) The Company depreciates the right-of-use assets on a straight-line basis over the lease term. Cost Amount Balance, June 30, 2025 $207,860 Additions 733,172 Derecognition (207,860) Balance, December 31, 2025 $733,172 Accumulated Amortization Balance, June 30, 2024 $(134,559) Amortization (47,001) Balance, June 30, 2025 (181,560) Amortization (50,739) Derecognition 207,860 Balance, December 31, 2025 $(24,439) Net Book Value Balance, June 30, 2025 $26,300 Balance, December 31, 2025 $708,733 20. LEASE LIABILITY The lease liability is initially measured at the present value of the lease payments to be made over the lease term, using the effective interest method for the present value determination. As the rate implicit in the lease cannot be readily determined, the Company applied an average incremental borrowing rate. The Company used a discount rate of 14.05% to calculate the present value of its lease payments. Total interest expense on lease liabilities for the six months ended December 31, 2025 was $8,577 (December 31, 2024 - $1,184). The following table represents the lease obligation for the Company: December 31, 2025 June 30, 2025 Current $93,294 $30,399 Non-current 617,312 - Total lease obligation $710,606 $30,399 The following table shows the roll forward of lease obligations for --- the six months ended December 31, 2025 and for the year ended June 30, 2025: December 31, 2025 June 30, 2025 Beginning balance $30,399 $27,266 Additions 733,172 52,600 Interest expense 8,577 1,598 Lease payments (61,542) (51,065) Ending balance $710,606 $30,399 INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 25 20. LEASE LIABILITY (CONTINUED) The following table presents the contractual undiscounted cash flows for lease obligation for the six months ended December 31, 2025, and for the year ended June 30, 2025: December 31, 2025 June 30, 2025 Less than one year $187,367 $30,573 One to five years 808,347 - Total undiscounted lease obligation $995,714 $30,573 During the six months ended December 31, 2025, the Company expensed $38,067 in short-term and low- value leases (December 31, 2024 – $38,291) 21. SUPPLEMENTAL CASH FLOW INFORMATION December 31, 2025 December 31, 2024 Disclosure of non-cash financing activities: Settlement of convertible debenture by conversion - $97,156 Fair value of warrants - - Equity portion of the convertible debentures - - Disclosure of non-cash investing activities: Settlement of convertible debenture by conversion - 97,156 Disclosure of cash flow information: Cash paid for income taxes - - Cash paid for interest $27,074 $39,833 22. SEGMENTED INFORMATION The Company has the following reporting segments: corporate and administration, loss prevention, retail media, and fabrication. Reportable segments are defined as components of an enterprise for which separate financial information is available. They are evaluated regularly by the chief operating decision maker when deciding how to allocate resources and assess performance. The reportable segments were determined based on the nature of the services provided and goods sold. Loss Prevention refers to sales of security technology, EAS systems, and supplies. Fabrication specializes in precision CNC cutting, routing, and drilling for various industries and sectors. Retail media refers to advertising revenue on welcoming systems and licensing arrangements. Corporate and administrative refers to the Company’s common costs that are shared across the company and are not associated with any reportable segment. INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 26 22. SEGMENTED INFORMATION (CONTINUED) For the six months ended December 31, 2025 Loss Prevention Fabrication Retail Media Corporate and administration Total Sales $351,753 $44,456 $62,947 - $459,156 Cost of goods sold (207,725) (33,074) (22,668) - (263,467) Gross profit 144,028 11,382 40,279 - 195,689 Operating expenses* (104,889) (13,332) (209,671) (1,234,441) (1,562,333) Amortization, equipment (2,496) (5,241) (248,021) - (255,758) Amortization, right-of-use asset (12,685) - (12,685) (25,369) (50,739) Foreign exchange gain - - - (22,105) (22,105) Miscellaneous income, net - - - (20,106) (20,106) Operating income (loss) 23,958 (7,191) (430,098) (1,302,021) (1,715,352) Finance costs: Interest expense (1,504) (1,504) - (180,117) (183,125) Net income (loss) and comprehensive income (loss) $22,454 $(8,695) $(430,098) $(1,482,138) (1,898,477) *Operating expenses include Administration, Selling, Marketing, and Research and Development costs. Fo --- r the six months ended December 31, 2024 Loss Prevention Fabrication Retail Media Corporate and administration Total Sales $381,597 $80,203 $110,158 - $571,958 Cost of goods sold (195,019) (31,321) (80,389) - (306,729) Gross profit 186,578 48,882 29,769 - 265,229 Operating expenses (115,457) (8,310) (166,896) (1,083,271) (1,373,934) Amortization, equipment (3,270) (8,362) (215,041) - (226,673) Amortization, right-of-use asset (3,881) - (3,882) (7,763) (15,526) Foreign exchange gain - - - (27,317) (27,317) Miscellaneous income, net - - - (2,113) (2,113) Operating income (loss) 63,970 32,210 (356,050) (1,120,464) (1,380,334) Finance costs: Interest expense (1,500) (1,500) - (190,798) (193,798) Interest income - - - 1,875 1,875 Net income (loss) and comprehensive income (loss) $62,470 $30,710 $(356,050) $(1,309,387) $(1,572,257) Loss Prevention has one customer, accounting for 11% of revenue (December 31, 2024 – no customer which individually represented more than 10% of the total revenue). Fabrication Operations has three customers, accounting for 91% of revenue (December 31, 2024 – two customers accounting for 87%). Retail Media has three customers accounting for 82% of revenue during the period (December 31, 2024 – three customers for 68%). The Company’s chief operation decision makers are the CEO, President, Corporate Secretary, and CFO. They review the operations and performance of the Company. December 31, 2025 June 30, 2025 Total assets by segment Fabrication $25,130 $30,802 Loss Prevention and other operations 4,887,010 2,613,502 Total $4,912,140 $2,644,304 INEO Tech Corp. Notes to the Interim Condensed Consolidated Financial Statements As at and for the six months ended December 31, 2025, and 2024 (Unaudited - Expressed in Canadian dollars) 27 22. SEGMENTED INFORMATION (CONTINUED) Sales by geographical locations are as follows: For the six months ended December 31 2025 2024 Canada $248,523 $372,373 USA 161,836 195,638 Turkey 20,815 - United Kingdom 27,982 - Mexico - 3,947 $459,156 $571,958 23. REVENUE December 31, 2025 December 31, 2024 Revenue Loss prevention and fabrication $396,209 $461,800 Retail media 62,947 110,158 Total $459,156 $571,958 The Company recorded revenue from the transfer of goods and services at a point-in-time and over time in the following lines of business: December 31, 2025 December 31, 2024 Point-in-time Loss prevention and fabrication $396,209 $461,800 Total $396,209 $461,800 December 31, 2025 December 31, 2024 Overtime Retail media $62,947 $110,158 Total $62,947 $110,158 24. SUBSEQUENT EVENTS Subsequent to the reporting date, on January 8, 2026, a shareholder previously considered a related party by virtue of significant influence reduced its ownership interest to a minority position. As a result of this change, the shareholder is no longer assessed to have significant influence over the Company and is no longer considered a related party. On January 21, 2026, INEO Solutions Inc. issued a notice of material breach to Bon Intelligence Inc. under the license agreement for failing to meet payment and reporting obligations. The Company is evaluating the potential impact, including possible adjustment of $206,625 of previously recognized revenue during the year ended June 30, 2025.