Appulse Corporation — Audit Report / Information 2025

Apr 15, 2026

Appulse Corporation

Consolidated Financial Statements

Years ended December 31, 2025 and 2024

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Independent Auditor's Report

MNP

To the Shareholders of Appulse Corporation:

Opinion

We have audited the consolidated financial statements of Appulse Corporation and its subsidiary (the "Corporation"), which comprise the consolidated statements of financial position as at December 31, 2025 and December 31, 2024, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Corporation as at December 31, 2025 and December 31, 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Corporation in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. We have determined that there are no key audit matters to communicate in our report.

Other Information

Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audits of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits or otherwise appears to be materially misstated. We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

MNP LLP

2000, 112 - 4th Avenue SW, Calgary AB, T2P 0H3

1.877.500.0792 T: 403.263.3385 F: 403.269.8450

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Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Corporation's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Corporation's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

MNP

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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor's report is Rahim Rajan.

Calgary, Alberta April 14, 2026

MNP LLP Chartered Professional Accountants

MNP

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Appulse Corporation

Consolidated Statements of Financial Position

As at December 31, 2025 and 2024

(amounts in Canadian dollars)

	Notes	2025 $	2024 $
Assets
Current assets
Cash and cash equivalents	5	210,644	3,371,796
Accrued interest	5	-	9,415
Marketable securities	6	3,054,872	-
Goods and Services Tax receivable		30,562	-
Prepaid expenses		31,380	-
Other receivables	7	774,853	772,768
Total current assets		4,102,311	4,153,979
Total assets		4,102,311	4,153,979
Liabilities
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Current liabilities
Accounts payable and accrued liabilities		38,624	30,583
Total current liabilities		38,624	30,583
Deferred tax liability	11	38,321	35,700
Total liabilities		76,945	66,283
Equity
Share capital	8	370,810	370,810
Contributed surplus		564,789	534,789
Retained earnings		3,089,767	3,182,097
Total equity		4,025,366	4,087,696
Total liabilities and equity		4,102,311	4,153,979

Approved by the Board of Directors

/s/ Douglas A. Baird Director

/s/ Dennis R. Schmidt Director

See accompanying notes to the consolidated financial statements.

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Appulse Corporation

Consolidated Statements of Loss and Comprehensive Loss

For the years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

	Notes	2025 $	2024 $
Expenses
General and administrative	10	(236,066)	(501,519)
Share-based compensation	9	(30,000)	(57,000)
Loss before the following:		(266,066)	(558,519)
Interest, dividends and other income	4, 5, 6, 7	101,891	336,861
Net change in unrealized fair value gain on investments	6	36,918	-
Loss before taxes		(127,257)	(221,658)
Income tax recovery	11	34,927	77,114
Net loss and comprehensive loss for the year		(92,330)	(144,544)
Loss per share:
Basic and diluted loss per share	13	(0.01)	(0.01)

See accompanying notes to the consolidated financial statements.

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Appulse Corporation

Consolidated Statements of Changes in Equity

For the years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

	Notes	Number of common shares	Common share capital $	Contributed surplus $	Retained earnings $	Total $
Balance, December 31, 2023		14,622,304	2,329,161	489,744	5,542,532	8,361,437
Share options exercised	9	150,000	35,955	(11,955)	-	24,000
Dividends paid	8	-	-	-	(2,215,891)	(2,215,891)
Return of paid-up capital	8	-	(1,994,306)	-	-	(1,994,306)
Share-based compensation	9	-	-	57,000	-	57,000
Net loss and comprehensive loss for the year		-	-	-	(144,544)	(144,544)
Balance, December 31, 2024		14,772,304	370,810	534,789	3,182,097	4,087,696
Share-based compensation	9	-	-	30,000	-	30,000
Net loss and comprehensive loss for the year		-	-	-	(92,330)	(92,330)
Balance, December 31, 2025		14,772,304	370,810	564,789	3,089,767	4,025,366

See accompanying notes to the consolidated financial statements.

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Appulse Corporation

Consolidated Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

	Notes	2025 $	2024 $
Operating activities
Net loss		(92,330)	(144,544)
Adjustments for:
Income tax recovery	11	(34,927)	(77,114)
Share-based compensation	9	30,000	57,000
Interest, dividends and other income		(2,085)	(32,183)
Net change in unrealized fair value gain on investments	6	(36,918)	-
		(136,260)	(196,841)
Changes in:
Other receivable		-	110,982
Good and Services Tax receivable		(30,562)	-
Prepaid expenses		(31,380)	-
Accounts payable and accrued liabilities		8,041	(208,693)
		(190,161)	(294,552)
Income taxes recovered (paid)		37,548	(287,186)
Net cash used in operating activities		(152,613)	(581,738)
Investing activities
Purchase of marketable securities – net	6	(3,017,954)	-
Receipt of interest income		9,415	-
Net cash used in investing activities		(3,008,539)	-
Financing activities
Dividends paid	8	-	(2,215,891)
Return of paid-up capital	8	-	(1,994,306)
Proceeds from exercise of stock options	8	-	24,000
Net cash used in financing activities		-	(4,186,197)
Decrease in cash and cash equivalents		(3,161,152)	(4,767,935)
Cash and cash equivalents, beginning of year		3,371,796	8,139,731
Cash and cash equivalents, end of year		210,644	3,371,796
Cash and cash equivalents comprise:
Cash		210,644	371,796
Guaranteed Investment Certificates (GICs)		-	3,000,000
Cash and cash equivalents, end of year		210,644	3,371,796

See accompanying notes to the consolidated financial statements.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

1. General business description

Appulse Corporation ("Appulse" or the "Corporation"), is a publicly traded corporation, listed on the TSX Venture Exchange under the symbol APL and was incorporated on March 23, 2021 in Alberta. The corporate address of business is Suite 603, 734 – 7 Avenue S.W., Calgary, Alberta, Canada, T2P 3P8.

Prior to November 1, 2023, the Corporation, through its wholly owned subsidiaries, sold new and refurbished centrifuge machines and related parts, rented centrifuge equipment, and provided maintenance services, consulting, and design advice to customers across North America. Effective November 1, 2023, the Corporation disposed of its wholly owned subsidiary, Centrifuges Unlimited Inc. ("Centrifuges"). As a result of this disposition, from that date through to the date of these consolidated financial statements, the Corporation has had no active business operations and no revenue-generating activities.

2. Basis of preparation

(a) Basis of accounting

These consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

These consolidated financial statements were authorized for issue by the Board of Directors on April 14, 2026.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for marketable securities, which are measured at fair value through profit or loss.

(c) Functional and presentation currency

These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Corporation and its subsidiary.

(d) Use of judgments and estimates

The preparation of consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities as at the date of the statement of financial position, and the reported amounts of revenues and expenses during the year. Estimates and judgments are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Actual results may differ from these estimates.

Management has determined that there are no material judgments or key sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amounts of assets or liabilities within the next financial year.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

3. Material accounting policy information

The Corporation has consistently applied the following accounting policies to all periods presented in these financial statements.

(a) Principles of consolidation

The consolidated financial statements include the accounts of the Corporation and its subsidiary, being an entity over which the Corporation has control. Control exists when the Corporation is exposed, or has rights, to variable returns from its involvement with an investee and has the ability to affect those returns through its power over the investee. Consolidation of subsidiary commences from the date control is obtained and ceases when control is lost.

The consolidated financial statements include the activities of Appulse and its wholly owned subsidiary, Rolyn Oilfield Services Inc.

Rolyn Oilfield Services Inc. was inactive during the year-ended December 31, 2025, and 2024.

The consolidated financial statements of the Corporation and its subsidiary are prepared for the same reporting periods and as of the same reporting dates. Uniform accounting policies are applied by all entities within the group. Management has determined that the Corporation operates as a single operating and reportable segment.

Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions (except for foreign currency transaction gains or losses), are eliminated on consolidation. Unrealized losses are eliminated in the same manner as unrealized gains, but only to the extent that there is no evidence of impairment.

(b) Financial instruments

Recognition and derecognition

All financial assets and financial liabilities are initially recognized when the Corporation becomes a party to the contractual provisions of the instrument.

Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred.

Financial liability is derecognized when it is extinguished, discharged, cancelled or expires.

Classification and initial measurement of financial assets

A financial asset (unless it is a trade receivable without a significant financing component) is initially measured at fair value plus or minus, for an item not at fair value through profit or loss ("FVTPL"), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

On initial recognition, a financial asset is classified as subsequently measured at: amortized cost; fair value through other comprehensive income ("FVOCI"); or FVTPL.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

The classification is determined by both the Corporation's business model for managing the financial asset and the contractual cash flow characteristics of the financial asset.

Financial instruments that are subsequently measured at fair value are classified in one of three fair value hierarchy levels, based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The three fair value hierarchy levels are as follows:

• Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities
• Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly including inputs in markets that are not considered to be active; and
• Level 3 – Inputs for the asset or liability that are not based on observable market data.

Subsequent measurement of financial assets

Financial assets at amortized cost

Financial assets are measured at amortized cost if the assets meet the following conditions (and are not designated as FVTPL):

• they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial recognition, these are measured at amortized cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

The Corporation's cash and cash equivalents, and other receivables fall into this category of financial assets.

Financial assets at FVTPL

Financial assets that are held within a different business model than 'hold to collect' or 'hold to collect and sell', and financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL.

Assets in this category are measured at fair value with gains or losses recognized in profit or loss. The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.

The Corporation's marketable securities fall into this category of financial assets that are measured at FVTPL. Changes in fair value, including realized gains and losses on disposal and unrealized gains and losses arising from remeasurement to fair value, are recognized in profit or loss in the period in which they arise.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

Financial assets at FVOCI

The Corporation accounts for financial assets at FVOCI if the assets meet the following conditions:

• they are held under a business model whose objective is to hold to collect the associated cash flows and sell; and
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Any gains or losses recognized in other comprehensive income ("OCI") will be recycled upon derecognition of the asset.

The Corporation does not have any financial assets in this category.

Classification and initial measurement of financial liabilities

Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Corporation designated a financial liability at FVTPL.

Subsequent measurement of financial liabilities

Subsequently, financial liabilities are measured at amortized cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognized in profit or loss.

The Corporation's accounts payable and accrued liabilities are measured at amortized cost.

The Corporation does not have and has not designated any financial liabilities at FVTPL.

Impairment of financial assets

The Corporation recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to 12 months of expected credit losses. For trade receivables, the Corporation applies the simplified approach to providing for expected credit losses, which allows for the use of a lifetime expected credit loss provision. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and is related to an event occurring after the impairment was recognized.

(c) Income from marketable securities

Income earned from marketable securities (measured at FVTPL) includes interest income, dividend income, and realized and unrealized gains or losses. Interest income from debt securities is recognized using the effective interest method. Dividend income is recognized when the Corporation's right to receive payment is established.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

(d) Interest income

The Corporation earned interest income on the short-term guaranteed investment certificates, which formed a part of its cash and cash equivalents as well as on the funds held in escrow. Interest income is accrued monthly using the effective interest method.

(e) Share-based compensation

The Corporation has a stock option plan and share options granted to directors, officers, employees and consultants of the Corporation are accounted for using the fair value method under which compensation expense is recorded based on the estimated fair value of the options at the grant date using the Black-Scholes option pricing model or other option pricing model as relevant.

The Corporation measures share-based payments to non-employees, if applicable, at the fair value of the goods or services received at the date of receipt of the goods or services. If the fair value of the goods or services cannot be measured reliably, the value of the options granted is measured using the Black-Scholes option-pricing model or other option pricing model as relevant.

Each tranche in an award is considered a separate award with its own vesting period and grant date fair value. Compensation cost is expensed over the vesting period with a corresponding increase in contributed surplus. When stock options are exercised, the cash proceeds along with the amount previously recorded as contributed surplus are recorded as share capital. A forfeiture rate is estimated on the grant date and is adjusted to reflect the actual number of options that vest.

(f) Provisions and contingent liabilities

Provisions are recognized by the Corporation when it has a legal or constructive obligation as a result of past events, it is probable that an outflow of economic resources will be required to settle the obligation and a reliable estimate can be made of the amount of that obligation. Provisions are stated at the present value of the expenditure expected to settle the obligation. The obligation is not recorded and is disclosed as a contingent liability if it is not probable that an outflow will be required, if the amount cannot be estimated reliably or if the existence of the outflow can only be confirmed by the occurrence of a future event.

(g) Taxes

Tax expense comprises current and deferred tax. Tax expense is recognized in the statement of income and comprehensive income except to the extent that it relates to items recognized directly in equity or other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities and the amounts used for taxation purposes. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill.

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 offset, and they relate to income taxes levied by the same taxation 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.

(h) Income (loss) per share

Basic income (loss) per share is calculated by dividing the Corporation's net income or loss by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is calculated by adjusting the Corporation's net income or loss and the weighted average number of common shares outstanding to reflect the effects of all potentially dilutive common shares.

(i) Accounting standards issued but not effective

The following standards and amendment are not yet effective and not being early adopted, but may have a material impact on the financial statements of the Corporation in the future:

Classification and Measurements of Financial Instruments (Amendments to IFRS 9 and IFRS 7)

These amendments change the requirements as to when a financial liability can be derecognized when it is settled via electronic transfer as well as when cash flows can be considered simply payments of principal and interest and hence the ability to classify assets as at amortized cost.

The mandatory effective date for adoption is effective to annual periods beginning on or after January 1, 2026.

Based on preliminary assessment performed by the Corporation, these amendments are not expected to have a significant impact on its financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements

IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies for annual reporting periods beginning on or after 1 January 2027. The new accounting standard introduces the following key new requirements:

• Entities are required to classify all income and expenses into five categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations and income tax categories. Entities are also required to present a newly-defined operating profit subtotal. Entities net profit will not change.
• Management-defined performance measures (MPMs) are disclosed in a single note in the financial statements.
• Enhanced guidance is provided on how to group information in the financial statements.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

In addition, all entities are required to use the operating profit subtotal as the starting point for the statement of cash flows when presenting operating cash flows under the indirect method.

The Corporation is still in the process of assessing the impact of the new accounting standard.

There are no other new standards or amendments that are expected to have a material impact on the Corporation.

4. Financial instruments – fair value and risk management

(a) Fair value of financial instruments

The Corporation's financial instruments include cash and cash equivalents, marketable securities, other receivables, accrued interest and accounts payable and accrued liabilities. The carrying amounts of cash and cash equivalents, other receivables, accrued interest, and accounts payable and accrued liabilities approximate their fair values due to their short-term nature. Marketable securities are measured at fair value at each reporting date.

(b) Risk management

The Corporation's activities expose it to a variety of risks arising from its use of financial instruments. These risks include credit risk, liquidity risk and market risk. This note presents information about the Corporation's exposure to each of these risks, the Corporation's objectives, policies and processes for measuring and managing risk, and the Corporation's management of capital. Further quantitative disclosures are included throughout these consolidated financial statements. The Corporation employs risk management strategies and polices to ensure that any exposures to risk are in compliance with the Corporation's business objectives and risk tolerance levels. While the Board of Directors has the overall responsibility for the Corporation's risk management framework, management has the responsibility to administer and monitor these risks.

Credit risk

Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Corporation's cash and cash equivalents, other receivable and accrued interest. The Corporation's maximum exposure to credit risk associated with financial assets is equivalent to their carrying amounts.

The Corporation manages the credit exposure related to cash and cash equivalents by selecting financial institutions with high credit ratings and monitors all short-term deposits to ensure an adequate rate of return. Given these credit ratings, management does not expect any counterparty to fail to meet its obligations.

As of December 31, 2025, the Corporation's other receivables include a remaining balance of $774,853 (2024 - $772,768) related to proceeds from the sale of Centrifuges, including accrued interest (Note 7). The funds are in escrow. Appulse expected to receive the escrow funds by November 2, 2025, pending specific terms and conditions. Receipt has been delayed pursuant to the terms of the escrow agreement and the master sales agreement related to an outstanding issue between the new owner of Centrifuges and a customer. Management is confident that there is no merit to the delay and are currently addressing the outstanding issue.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

Liquidity risk

Liquidity risk is the risk that the Corporation will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

The Corporation's approach to managing liquidity is to ensure it will have sufficient liquidity to meet its liabilities when due.

The Corporation's accounts payable and accrued liabilities are generally due within 30 days from the receipt of vendor invoices, which as at December 31 2025, totaled $38,624 (2024 - $30,583).

Market risk

Market risk is the risk that changes in market prices – e.g., foreign exchange rates, interest rates and equity prices – will affect the Corporation's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

As at December 31, 2025 (2024 – none), the Corporation's exposure to equity price fluctuation risk relates to the Corporation's marketable securities (Note 6).

The Corporation does not have any significant exposure to interest rate or foreign currency risks as at December 31, 2025 and 2024.

(c) Capital management

The Corporation's objectives in managing capital are to maintain a capital structure that allows the Corporation to meet its growth strategies and build long term shareholder value while satisfying its financial obligations.

The capital of the Corporation as at December 31, 2025 is comprised of its total equity.

The Corporation's management is responsible for the management of capital as approved by the directors of the Corporation.

There were no changes in the Corporation's approach to capital management during the year.

5. Cash and cash equivalents

As at December 31, 2025, the Corporation's cash and cash equivalents comprises cash held with Canadian financial institutions.

As at December 31, 2024, the Corporation's cash and cash equivalents comprised of cash held with Canadian financial institutions and Guaranteed Investment Certificates (GICs) that carried interest ranging between $3.95%$ per annum and $6.00%$ per annum with original maturities ranging between 90 days to 1 year but were redeemable at any time with no interest being earned on early redemption.

The GICs matured during the year ended December 31, 2025 and majority of the proceeds were reinvested in marketable securities.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

Interest income

During the year ended December 31, 2025, the Corporation earned interest income of $71,554 (2024 - $314,093) on GICs and cash balance recognized in profit or loss. Of this amount, $Nil (2024 - $9,415) was recorded as accrued interest in the statements of financial position as at December 31, 2025.

1. Marketable securities

During the year ended December 31, 2025, the Corporation invested in marketable securities (2024 – none), consisting of a combination of fixed-term investments and Canadian and global equity securities. These investments are managed through the facilities of Royal Bank of Canada and are measured at fair value through profit or loss. The marketable securities are classified as Level 1 within the fair value hierarchy in accordance with IFRS 13, Fair Value Measurement.

	Average cost $	Unrealized gain (loss)	Fair value $
Fixed income	1,000,008	618	1,000,626
Equity	2,017,946	36,300	2,054,246
	3,017,954	36,918	3,054,872

In addition to recognizing net change in unrealized fair value gain on investments of $36,918, the Corporation earned other income totaling 28,252 (2024 - $Nil) during the year, which was recognized in profit or loss.

1. Other receivable

Other receivables consist of the remaining balance of $750,000 (2024 - $750,000) relating to the proceeds from the sale of Centrifuges, together with accumulated accrued interest of $24,853 (2024 - $22,768), totaling $774,853 (2024 - $772,768) as at December 31, 2025. The increase during the year represented interest earned on the balance totaling $2,085 (2024 - $22,768).

These amounts are held in escrow pursuant to the Escrow Agreement dated November 1, 2023 (the "Escrow Agreement") in connection with the sale of Centrifuges. The Corporation initially expected to receive these funds by November 2, 2025, subject to the satisfaction of certain terms and conditions. The receipt of the funds has been delayed in accordance with the terms of the Escrow Agreement and due to an outstanding matter between the new owner of Centrifuges and a customer. Management believes the matter giving rise to the delay lacks merit and is actively working to resolve the issue.

13

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

8. Share capital

(a) Authorized

• Unlimited number of voting common shares; and
• Unlimited number of preferred shares, issuable in series

(b) Issued and outstanding

Common shares	Number	Amount $
Balance December 31, 2023	14,622,304	2,329,161
Issued upon exercise of share option	150,000	35,955
Return of paid-up capital	-	(1,994,306)
Balance, December 31, 2024	14,772,304	370,810
Balance, December 31, 2025	14,772,304	370,810

During the year ended December 31, 2024, 150,000 share options were exercised to acquire 150,000 common shares for gross proceeds of $24,000. As a result of the exercise, $11,955 of share-based compensation reserve previously recognized was transferred from contributed surplus to share capital.

(c) Dividend

On June 7, 2024, the Corporation paid a dividend of $0.15 per common share, for a total payment of $2,215,891, to shareholders of record on May 28, 2024.

(d) Return of paid-up capital

At the annual and special meeting of shareholders held on August 21, 2024, the shareholders approved a return of paid-up share capital of the Corporation's common shares totaling $1,994,306 representing a return of $0.135 per share to shareholders of record on August 27, 2024.

9. Share-based compensation

(a) Share option plan

The Corporation has a share option plan under which directors, officers and employees of the Corporation and its subsidiary are eligible to receive share options. The aggregate number of common shares to be issued upon the exercise of all options granted under the plan shall not exceed 10% of the issued common shares of the Corporation at the time of granting of the options. Options granted under the plan generally have a term of five years and may not exceed ten years, and vest at terms to be determined by the directors at the time of grant. The exercise price of each option is determined by the directors at the time of grant, but shall not be less than the price permitted by the policy or policies of the stock exchange(s) upon which the Corporation's common shares are then listed.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

The following table provides activities of the share option plan during the years ended December 31, 2025 and 2024:

	2025		2024
	Number	Weighted average exercise price $	Number	Weighted average exercise price $
Outstanding, beginning of year	1,020,000	0.23	395,000	0.26
Exercised (Note 8(b))	-		(150,000)	0.16
Issued	300,000	0.22	775,000	0.20
Outstanding, end of year	1,320,000	0.23	1,020,000	0.23
Exercisable, end of year	1,320,000	0.23	1,020,000	0.23

On November 20, 2025, the Corporation granted an aggregate of 300,000 options to purchase common shares of the Corporation to Directors of the Corporation at a price of $0.22 per share. The options vested upon issuance and are exercisable over the five-year term expiring November 19, 2030.

On September 27, 2024, the Corporation granted an aggregate of 775,000 options to purchase common shares of the Corporation to Directors of the Corporation at a price of $0.20 per share. The options vested upon issuance and are exercisable over the five-year term expiring September 26, 2029.

The following table summarizes information related to the Corporation's outstanding share options as at December 31, 2025:

Date of grant	Outstanding options	Exercise price $	Weighted average remaining contractual life (years)	Number of share options exercisable
January 26, 2022	245,000	0.32	1.08	245,000
September 27, 2024	775,000	0.20	3.75	775,000
November 20, 2025	300,000	0.22	4.92	300,000
	1,320,000		3.52	1,320,000

The following table summarizes information related to the Corporation's outstanding share options as at December 31, 2024:

Date of grant	Outstanding options	Exercise price $	Weighted average remaining contractual life (years)	Number of share options exercisable
January 26,2022	245,000	0.32	2.07	245,000
September 27,2024	775,000	0.20	4.57	775,000
	1,020,000		3.97	1,020,000

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

(b) Share-based compensation expense

During the year ended December 31, 2025, the Corporation recorded share-based compensation expenses of $30,000 (2024 - $57,000). This amount was determined using the Black Scholes Options Pricing Model using the following assumptions:

	2025	2024
Share price at grant date per common share	$0.21	$0.20
Exercise price per common share	$0.22	$0.20
Risk-free interest rate	2.30%	2.73%
Expected volatility	44.00%	36.98%
Expected life in years	5	5
Expected dividend yield	$Nil	Nil

1. General and administrative expenses

General and administrative expenses is comprised of the following:

	2025	2024
	$	$
Salaries, consulting fees, directors' fees and benefits	120,617	259,529
General office	12,460	93,774
Marketing and travel	1,508	4,996
Other corporate costs	101,481	143,220
	236,066	501,519

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

11. Income tax recovery

Income tax (recovery) expense for the year comprises the following components, and a reconciliation of the effective tax rate is presented below:

	2025	2024
	$	$
Loss before taxes	(127,257)	(221,658)
Effective tax rate	23%	23%
Expected tax expense	(29,269)	(50,981)
Tax effects of:
Permanent differences	249	431
Capital gains not taxable	(7,884)	-
Other items	39,525	-
Refund in respect of prior year loss carried back	(37,548)	-
Prior year over-provision in current tax	-	(26,564)
Income tax (recovery) expense	(34,927)	(77,114)
Allocated as follows:
- Current	(37,548)	(26,564)
- Deferred	2,621	(50,550)
	(34,927)	(77,114)

Deferred tax asset (liability) as at December 31, 2025 and 2024 is comprised of the following:

	2025	2024
	$	$
Capital gain reserve – presented as deferred tax liability	(38,321)	(35,700)
Deferred tax liability	(38,321)	(35,700)

The following provides the details of unrecognized deductible temporary differences and unused losses for which no deferred tax asset has been recognized:

	2025	2024
	$	$
Non-capital loss carried forwards	222,076	144,704
Unrecognized deductible temporary differences	222,076	144,704

The Corporation has unused non-capital losses of $222,076 to offset future taxable income. The non-capital losses expire in 2045.

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Appulse Corporation

Notes to the Consolidated Financial Statements

Years ended December 31, 2025 and 2024

(amounts in Canadian dollars)

12. Related party transactions

Key management compensation

Key management personnel include executive officers (includes the president and chief financial officer) and directors.

During the year ended December 31, 2025, the executive officers received compensation by way of consulting fees totaling $97,116 (2024 - $184,978), which is included within general and administration expenses. No amounts remained unpaid in respect of the consulting fees as at December 31, 2025 (2024 - $Nil).

The Director's remuneration for the year ended December 31, 2025 amounted to $23,500 (2024 - $40,830), which is recorded within general and administration expenses. Of this amount, $11,750 (2024 - $11,750) was unpaid and was recorded within accounts payable and accrued liabilities in the statements of financial position.

See Note 9 for the details of stock options issued to the Directors.

13. Loss per share

The weighted average number of common shares used in the calculation of loss per share is as follows:

	2025	2024
Basic	14,772,304	14,743,615
Effect of dilutive options	-	-
Diluted	14,772,304	14,743,615

The effects of anti-dilutive potential units are ignored in calculating dilutive loss per share. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive.