C-COM Satellite Systems Inc. — Interim / Quarterly Report 2025

Jul 16, 2025

C-COM
SATELLITE SYSTEMS INC.

C-COM SATELLITE SYSTEMS INC.

INTERIM CONDENSED FINANCIAL STATEMENTS

SECOND QUARTER FINANCIAL REPORT
FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED MAY 31, 2025 AND MAY 31, 2024

PREPARED BY MANAGEMENT
(Unaudited)

Notice to Reader

Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim financial statements; they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim financial statements of the Corporation have been prepared by and are the responsibility of the Corporation's management. The Corporation's independent auditor has not performed a review of these unaudited interim financial statements in accordance with standards established by CPA Canada for a review of interim financial statements by an entity's auditor.

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C-COM SATELLITE SYSTEMS INC.

INTERIM CONDENSED FINANCIAL STATEMENTS

FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED MAY 31, 2025 AND MAY 31, 2024
UNAUDITED

Management's Responsibility for Financial Reporting

Management has established processes, which are in place to provide them sufficient knowledge to support management representations that they have exercised reasonable diligence that (i) the unaudited interim financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the unaudited interim financial statements and (ii) the unaudited interim financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Corporation, as of the date of and for the periods presented by the unaudited interim financial statements.

The Board of Directors is responsible for reviewing and approving the unaudited interim financial statements together with other financial information of the Corporation and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the unaudited interim financial statements together with other financial information of the Corporation. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the unaudited interim financial statements together with other financial information of the Corporation for issuance to the shareholders.

Management recognizes its responsibility for conducting the Corporation's affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

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C-COM
CATELLITE SYSTEMS INC.

May 31, 2025

Contents

Financial Statements	Page
Interim Condensed Statements of Financial Position - (unaudited)	1
Interim Condensed Statements of Changes in Equity - (unaudited)	2
Interim Condensed Statements of Net Earnings and Comprehensive Income - (unaudited)	3
Interim Condensed Statements of Cash Flows - (unaudited)	4
Notes To The Unaudited Interim Condensed Financial Statements	5

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CCOM
CATELLITE SYSTEMS INC.

Unaudited Interim Condensed Statements of Financial Position

As at May 31, 2025 and November 30, 2024
(Canadian dollars)

	Notes	May 31, 2025 (unaudited)	Nov. 30, 2024 (audited)
ASSETS
Cash		$ 4,814,452	$ 5,890,440
Marketable securities		10,860,959	10,050,000
Accounts receivable		366,384	582,976
Non-refundable investment tax credits		608,542	396,360
Inventory	8	6,627,838	7,161,061
Prepaid expenses		80,577	118,161
Tax recoverable		396,206	378,184
Future income tax asset - right of use lease	9	360,678	396,427
Total current assets		24,115,636	24,973,609
Capital assets		94,288	107,013
Right of use asset	9	1,319,360	1,477,683
Total non-current assets		1,413,648	1,584,696
TOTAL ASSETS		$ 25,529,284	$ 26,558,305
LIABILITIES & SHAREHOLDERS EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	12	$ 613,350	$ 928,492
Lease obligations	9	286,848	275,547
Total current liabilities		900,198	1,204,039
NON-CURRENT LIABILITIES
Deferred revenue		93,603	93,603
Deferred tax liability		459,418	483,922
Lease obligations	9	1,074,203	1,220,404
Total non-current liabilities		1,627,224	1,797,929
TOTAL LIABILITIES		2,527,422	3,001,968
SHAREHOLDERS EQUITY
Share capital	10	16,578,862	16,578,862
Contributed surplus		2,450,843	2,413,606
Retained earnings		3,972,157	4,563,869
TOTAL SHAREHOLDERS' EQUITY		23,001,862	23,556,337
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY		$ 25,529,284	$ 26,558,305

See accompanying notes to the financial statements

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CCOM
CATELLITE SYSTEMS INC.

Unaudited Interim Condensed Statements of Changes in Equity

For the six-month period ended May 31, 2025 and May 31, 2024
(Canadian dollars)

	Share Capital	Contributed Surplus	Retained Earnings	Total Equity
Balance December 1, 2024	$ 16,578,862	$ 2,413,606	$ 4,563,869	$ 23,556,337
Net income and comprehensive income (loss)	-	-	(591,712)	(591,712)
Dividends declared	-	-	-	-
Exercised options	-	-	-	-
Stock based compensation expense	-	37,237	-	37,237
Reclassification of contributed surplus on exercised options	-	-	-	-
Balance May 31, 2025	$ 16,578,862	$ 2,450,843	$ 3,972,157	$ 23,001,862
	Share Capital	Contributed Surplus	Retained Earnings	Total Equity
Balance December 1, 2023	$ 16,486,919	$ 2,160,352	$ 6,887,168	25,534,439
Net income and comprehensive income	-	-	452,301	452,301
Dividends declared	-	-	(1,055,411)	(1,055,411)
Exercised options	77,875	-	-	77,875
Stock based compensation expense	-	104,020	-	104,020
Reclassification of contributed surplus on exercised options	14,063	(14,063)	-	-
Balance May 31, 2024	$ 16,578,857	$ 2,250,309	$ 6,284,058	$ 25,113,224

See accompanying notes to the financial statements

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C-COM
CATELLITE SYSTEMS INC.

Unaudited Interim Condensed Statements of Net Earnings and Comprehensive Income

For the three-month and six-month periods ended May 31, 2025 and May 31, 2024
(Canadian dollars)

	Three Months Ended:		Six Months Ended:
	May 31, 2025 (unaudited)	May 31, 2024 (unaudited)	May 31, 2025 (unaudited)	May 31, 2024 (unaudited)
REVENUE	$ 1,586,631	$ 2,580,514	$ 2,285,000	$ 5,208,551
COST OF SALES	716,856	1,096,085	1,108,810	2,074,199
GROSS PROFIT	869,775	1,484,429	1,176,190	3,134,352
	54.8%	57.5%	51.5%	60.2%
EXPENSES
General and administrative	351,587	506,039	865,361	1,024,868
Research and development	459,326	555,744	933,574	992,481
Sales and marketing	282,915	379,517	472,554	636,743
	1,093,828	1,441,300	2,271,489	2,654,092
INCOME / (LOSS) BEFORE OTHER INCOME AND INCOME TAX	(224,053)	43,129	(1,095,299)	480,260
OTHER INCOME
Investment income	105,287	208,008	216,040	395,428
Lease obligation interest expense	(25,317)	-	(51,845)	-
Foreign exchange gain / (loss)	(20,828)	6,545	57,550	5,848
	59,142	214,553	221,745	401,276
INCOME / (LOSS) BEFORE INCOME TAX	(164,911)	257,682	(873,554)	881,536
INCOME TAX	(74,051)	196,610	(281,842)	429,235
NET INCOME / (LOSS) AND COMPREHENSIVE INCOME	$ (90,860)	$ 61,072	$ (591,712)	$ 452,301
Basic earnings per share	$0.00	$0.00	$0.00	$0.01
Basic weighted average number of common shares outstanding	42,256,500	42,228,073	42,256,500	42,228,073
Diluted earnings per share	$0.00	$0.00	$0.00	$0.01
Diluted weighted average number of common shares	42,372,920	42,485,802	42,372,920	42,485,802

See accompanying notes to the financial statements

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C-COM
BATELLITE SYSTEMS INC.

Unaudited Interim Condensed Statements of Cash Flows

For the six-month periods ended May 31, 2025 and May 31, 2024
(Canadian dollars)

	Six Months Ended:
	May 31, 2025 (unaudited)	May 31, 2024 (unaudited)
OPERATING ACTIVITIES
Net income	$ (591,712)	$ 452,301
Items not affecting cash:
Investment income	(216,040)	(395,428)
Income tax expense	(281,842)	429,235
Scientific research and experimental development tax credit	(212,182)	(170,078)
Amortization	13,669	23,370
Obsolete inventory write-off	126,150	-
Unrealized foreign exchange loss	280,198	1,001,269
Stock-based compensation	37,237	104,020
	(844,522)	1,444,689
Changes in non-cash working capital:
Accounts receivable	(156,345)	(473,871)
Inventory	533,223	767,477
Prepaid expenses	37,584	26,402
Accounts payable and accrued liabilities	(590,759)	(501,659)
	(176,297)	(181,651)
Investment income received	424,337	397,067
Income tax refund / (paid)	323,075	(139,166)
Cash flow from/(used) in operating activities	(273,407)	1,520,939
INVESTING ACTIVITY
Acquisition of marketable securities	(10,860,959)	(5,500,000)
Disposal of marketable securities	10,050,000	5,588,482
Disposal of capital assets	1,100	-
Acquisition of capital assets	(1,235)	-
Cash flow from/(used) in investing activities	(811,094)	88,482
FINANCING ACTIVITY
Dividends paid to owners of Company	-	(1,055,411)
Options exercised	-	77,875
Cash flow from/(used) in financing activities	-	(977,536)
Foreign exchange gain / (loss) on cash	8,513	(4,281)
INCREASE/(DECREASE) IN CASH FLOW	(1,075,988)	627,604
CASH - beginning of period	5,890,440	5,482,360
CASH - end of period	$ 4,814,452	$ 6,109,964

See accompanying notes to the financial statements

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C-COM
C-COM
BATELLITE SYSTEMS INC.
www.c-comsat.com

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

For the three-month period ended May 31, 2025 and 2024

(Expressed in Canadian dollars)

1. DESCRIPTION OF INCORPORATION AND OPERATIONS

C-COM Satellite Systems Inc. (the "Company") was federally incorporated under the Canadian Business Corporations Act on December 9, 1997. On July 24, 2000, the Company's stock began trading on TSX Venture Exchange. The Company is engaged in the development of high quality and cost-effective satellite-based technology that allows delivery of high-speed internet access for fixed, transportable and mobile end-users. The address of its registered office and principal place of business is 2574 Sheffield Road, Ottawa, Ontario K1B 3V7.

These unaudited interim condensed financial statements for the three-month period ended May 31, 2025 were authorized for issuance by the Board of Directors on July 15, 2025.

2. BASIS OF PRESENTATION

These unaudited interim condensed financial statements are expressed in Canadian dollars, which is the Company's functional currency, and have been prepared in accordance with International Accounting Standard ("IAS") IAS34 – Interim financial reporting, as issued by the International Accounting Standard Board ("IASB"). These unaudited interim condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS") and in accordance with the accounting policies the Company adopted in its annual financial statements for the year ended November 30, 2024 and should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report for the year ended November 30, 2024. These unaudited interim condensed financial statements do not include all the information required in annual financial statements.

These unaudited interim condensed financial statements have been prepared on a going concern basis using historical cost conventions.

3. CHANGES IN ACCOUNTING POLICIES

There were no changes in the Company's accounting policies during its fiscal 2024 year.

There are no required or contemplated changes in the Company's accounting policies for this fiscal year.

4. CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATES

The preparation of financial statements in conformity with IFRS requires the Company's management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements

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C-COM CATELLITE SYSTEMS INC.
www.c-comsat.com

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

For the three-month period ended May 31, 2025 and 2024

(Expressed in Canadian dollars)

4. CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATES (CONTINUED)

and the reported amounts of revenues and expenses during the reporting periods presented. Actual results could differ from those estimates. There were no significant changes in estimates or approaches to determining estimates in the periods presented when compared to the estimates or approaches used in the annual financial statements for the year ended November 30, 2024.

5. GOVERNMENT GRANTS

In late 2023, the Company commenced an additional contribution agreement with the National Research Council Canada (NRC) – Industrial Research Assistance Program (IRAP) to reduce the cost of a specific research and development project. The Contribution agreement started Nov. 1, 2023 and is to be completed by Oct. 31, 2025. The NRC agreed to contribute up to a maximum of $815,845 over the period of the agreement with specific maximum contribution amounts allocated to each fiscal year. During Q2, the Company accrued $95,281 (2024 – $62,048) for this project's IRAP funding. NRC reserves the right to claim back all or part of its payments from the Company under certain circumstances. No repayment has been requested for and no contingent liability has been accrued at year end.

In Q2 2025, the Company commenced a contribution agreement with Industry, Science, and Economic Development Canada ("ISED") to develop high efficiency beamforming IC and intelligent beam-forming antenna modules for satellite and ESA terminals. This ISED "FABrIC" grant totals $497,650. The agreement started April 1, 2025 and is to be completed by Mar. 31, 2027. During Q2 2025, the Company accrued $11,000 (2024 – $Nil) for this project's ISED funding. ISED reserves the right to claim back all or part of its payments from the Company under certain circumstances.

6. SEASONALITY

The results of operations for the interim periods are not necessarily indicative of the results of operations for the full year. The Company's revenues and earnings have historically been subject to some quarterly seasonality due to the timing of vacation periods and statutory holidays.

7. OPERATING SEGMENT INFORMATION

IFRS 8 "Operating Segments" defines an operating segment as (a) a component of an entity that engages in business activities from it which may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), (b) whose operating results are regularly reviewed by the entity's chief decision maker to make decisions about resources to be allocated to the segment and to assess its performance and (c) for which discrete financial information is available.

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C-COM
C-STELLITE SYSTEMS INC.
www.c-comsat.com

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

For the three-month period ended May 31, 2025 and 2024

(Expressed in Canadian dollars)

7. OPERATING SEGMENT INFORMATION (CONTINUED)

For managements purposes the Company's activities are attributable to a single operating segment, engaged in the design and manufacture of auto-deploying mobile satellite antennas. Consequently, the group does not present any operating segment information.

Revenue by Geographic area

The location of the customer determines the geographic areas for revenue.

	3 months ended May 31, 2025	3 months ended May 31, 2024
	$	$
Canada	184,093	Nil
Asia	385,490	951,507
United States	277,580	179,479
France	254,337	Nil
Kazakhstan	226,466	254,962
Middle East	171,437	29,087
Rest of the World	87,228	1,145,479
	1,586,631	2,580,514

Capital assets

The location of capital assets determines the geographic areas. All capital assets are located in Canada.

Major Customers

For the quarter ended May 31, 2025, the Company had three customers who accounted for more than 10% of revenues, contributing a total of $642,295 or 40% of total revenues (for the quarter ending May 31, 2024 – the Company had two customers who generated more than 10% of revenues with a total of 68% of revenues).

8. INVENTORY AND COST OF SALES

	May 31, 2025	Nov. 30, 2024	Change
	$	$	$
Component parts	5,214,823	6,334,165	1,119,342
Finished goods	1,413,015	1,741,817	328,802
Total	6,627,838	8,075,982	1,448,144

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C-COM
C-STELLITE SYSTEMS INC.
www.c-comsst.com

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

For the three-month period ended May 31, 2025 and 2024

(Expressed in Canadian dollars)

1. INVENTORY AND COST OF SALES (CONTINUED)

	May 31, 2025	May 31, 2024	Change
	$	$	$
Value of inventory expensed in the period	685,691	1,067,937	382,246
Value of obsolete inventory in costs of sales	(1,258)	-	1,258
Un-recovered freight and storage charges	28,223	18,208	10,015
Allocation of amortization	4,200	9,940	5,740
Total Cost of Sales	716,856	1,096,085	379,229

The Company supplies its manufacturers with the component parts for its antenna systems, in conjunction with its purchase orders.

9. RIGHT OF USE ASSET AND LEASE OBLIGATION

During Q3 2024 the Company entered into a five-year lease for its office and warehouse space at its Head Office in Ottawa. The Company recognized this right of use asset and a lease liability starting in Q3 2024.

The following table presents the Company's right-of-use asset for this lease:

	As of May 31, 2025	As of May 31, 2024
	$	$
Balance, December 1	$1,477,683	-
Additions	-	-
Disposals and other adjustments	-	-
F2025 depreciation	(158,323)	-
	1,319,360	-

The Company has not included the renewal option in the measurement of its lease obligation for this space. Accordingly, the right of use lease asset is being amortized on a straight-line basis over a 60-month period.

The following table presents this lease obligation for the company's Head Office space:

	As of May 31, 2025	As of May 31, 2024
	$	$
Balance, December 1	1,495,951	-
Additions	-	-
Disposals and other adjustments	-	-
Less: F2025 principal payments	(134,900)	-
Total lease obligation	1,361,051	-

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C-COM
C-COM
SATELLITE SYSTEMS INC.
www.c-comsat.com

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

For the three-month period ended May 31, 2025 and 2024

(Expressed in Canadian dollars)

9. RIGHT OF USE ASSET AND LEASE OBLIGATION (CONTINUED)

Current portion	286,848	-
Non-current	1,074,203	-

The interest rate used to discount the lease payments to the present value over the 60-month lease period is 7.2% per annum. Imputed interest expense for 2025 is presented in the Other Income and Expenses.

The following table presents the Company's total contractual lease obligations as of May 31, 2025 on an undiscounted cash-flow basis:

Less than one year	$ 195,914
One to five years	1,392,911
More than five years	Nil
Total undiscounted lease costs	1,588,825

10. ISSUED CAPITAL

Stock options

The Company has an established stock option plan, which provides that the Board of Directors may grant stock options to eligible directors, officers and employees. Under the plan, eligible directors, officers and employees are granted the right to purchase shares of common stock at a price established by the Board of Directors on the date the options are granted but in no circumstances below fair market value of the shares at the date of grant. Under the plan, options granted to employees vest 1 year after the grant date. Options granted to the Company's board members vest at time of the grant date.

On May 10, 2022, the Company reset the option pool to 20% of the issued and outstanding common shares on that date. Formal approval for the reset was received from the TSXV on June 17, 2022. A total of 8,176,280 common shares then became authorized for issuance under the plan.

There were 2,405,130 options available to be granted as of May 31, 2025. No consideration is payable on the grant of an option with options generally vesting after one year from the date of grant.

As of May 31, 2025, there were 4,396,050 options outstanding, of which 4,109,050 were exercisable.

Outstanding share capital

On May 31, 2025, there were 42,256,500 common shares of the Company outstanding. (May 31, 2024 – 42,256,500)

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C-COM
C- and C-Forums
BATELLITE SYSTEMS INC.
www.c-comsat.com

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

For the three-month period ended May 31, 2025 and 2024

(Expressed in Canadian dollars)

11. NET EARNINGS PER SHARE

The diluted weighted average number of shares has been calculated as follows:

	3 months ended May 31, 2025	3 months ended May 31, 2024
Weighted average number of shares – basic	42,256,500	42,228,073
Addition to reflect the dilutive effect of employee stock options	116,420	257,729
Weighted average number of shares – diluted	42,372,920	42,485,802

Options that are anti-dilutive because the exercise price was greater than the average market price of the common shares are not included in the computation of diluted earnings per share. For the three-month period ending May 31, 2025, 3,894,150 were excluded from the above calculation (May 31, 2024 – 3,265,150 anti-dilutive options were excluded from the above calculation). Net income represents the measure of profit and loss used to calculated earnings per share.

12. RELATED PARTY TRANSACTIONS AND BALANCES

The Company regards the members of the Board of Directors, the partners of LaBarge Weinstein LLP, and the senior managers and their immediate families of the following entities as related parties: C-COM Satellite Systems Inc., Triton Inc., 718133 Ontario Inc., Rampart International Corp. and Art Slaughter, CPA Professional Corporation.

The Company had the following transactions and balances with related parties during the period:

		3 months ended May 31, 2025	3 months ended May 31, 2024
		$	$
Board of Directors:
Board of Director fees	(i)	36,000	36,000
Transactions with Rampart International Corp.:
Reimbursement of office and other expenses	(ii)	1,232	4,325
Transactions with 718133 Ontario Inc.:
Rental of office and warehouse space	(iii)	98,969	82,459

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C-COM
C-COM
SATELLITE SYSTEMS INC.
www.c-comsat.com

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

For the three-month period ended May 31, 2025 and 2024

(Expressed in Canadian dollars)

12. RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

Transactions with Art Slaughter CPA Pro. Corp.:

Purchase of consulting services	(iv)	8,875	7,750
Transactions with LaBarge Weinstein LLP:
Legal fees and expenses	(v)	17,365	12,211
		As At May 31, 2025	As At May 31, 2024
		$	$
Balances with related parties
Amounts due from Rampart International Corp.		Nil	4,888
Amounts due to 718133 Ontario Inc.		6,323	Nil
Amounts due to Art Slaughter CPA Pro. Corp.		Nil	Nil
Amounts due to LaBarge Weinstein LLP		4,817	2,913

Balances with related parties are due upon demand and included with accounts payable and accrued liabilities.

i. The Board of Directors instituted a Board of Directors fee of $36,000 per annum per board member commencing November 3, 2022 and is paid quarterly.
ii. The Company occupies the same building as Rampart International Corp. From time to time, they invoice each other for incidental costs. The sole shareholder of Rampart International Corp. is related to the Chief Executive Officer of C-COM Satellite Systems Inc.
iii. The Company has a 5-year lease commitment with 718133 Ontario Ltd. which ends July 31st, 2029, for office and warehouse space. The Company and 718133 Ontario Ltd. have common ownership.
iv. The Company purchases financial consulting services from Art Slaughter CPA Professional Corporation. The Company's Chief Financial Officer is the director of this company.
v. The Company retains a business law firm in Ottawa, Canada to provide legal services and advice. The Company's secretary is a partner of this firm.

13. IMPACT OF THE RUSSIA/UKRAINE CONFLICT

Russia's attack on Ukraine on February 24, 2022 has created much uncertainty and its economic impact has been wide-ranging. The Company has experienced the effects of supply chain disruptions, shipping delays, inflationary price pressures and the inability to sell to its Russian based re-sellers as a result of this conflict. These and other risks may have an impact on the Company in the future. The extent that the conflict will continue to affect the Company's cannot be predicted at this time.

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C-COM
C-ACTIVITATIS · SUSTAINS INC.
www.c-comsat.com

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

For the three-month period ended May 31, 2025 and 2024

(Expressed in Canadian dollars)

14. IMPACT OF THE GLOBAL TRADE AND TARIFF DISPUTE

The United States initiative in April 2025 to tariff most countries around the world, including Canada, has created much uncertainty and its economic impact has already been significant. Though the Company's global customer base is diverse and its volume of goods sold to the US in recent years has not been significant, it is likely that these US trade actions will eventually have a negative impact on the Company's revenue and profit margins. The extent that these trade disputes will continue to affect the Company cannot be predicted at this time.