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Edgewater Wireless Systems Inc. — Interim / Quarterly Report 2026
Mar 30, 2026
43924_rns_2026-03-30_9941027f-7833-4695-9486-e6f1e9c0bf2f.pdf
Interim / Quarterly Report
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EDGEWATER wireless
Edgewater Wireless Systems Inc.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
JANUARY 31, 2026 AND 2025
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED)
NOTICE TO READER
The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
Edgewater Wireless Systems Inc.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
(Unaudited)
| As at January 31, 2026 | As at April 30, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash | $ 13,327 | $ 1,143,967 |
| Amounts receivable (note 5) | 216,151 | 49,824 |
| Prepaid expenses | 145,032 | 155,458 |
| Deposit | 3,925 | 3,925 |
| Total current assets | 378,435 | 1,353,174 |
| Non-current assets | ||
| Property and equipment (note 6) | 751 | 1,026 |
| Right-of-use asset (note 7) | 4,313 | 14,018 |
| Total assets | $ 383,499 | $ 1,368,218 |
| LIABILITIES AND SHAREHOLDERS' DEFICIENCY | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities (notes 8 & 12) | $ 878,583 | 1,057,372 |
| Deferred revenue | 252,119 | 252,119 |
| Lease liability (note 9) | 4,557 | 12,858 |
| Notes and loan payable (note 10) | 13,705 | 13,337 |
| Convertible debentures (note 11) | 30,195 | 406,424 |
| Deferred share unit liability (note 13) | 6,575 | - |
| Total current liabilities | 1,185,734 | 1,742,110 |
| Non-current liabilities | ||
| Lease liability (note 9) | - | 1,160 |
| Loan payable (note 10) | 59,984 | 60,000 |
| Convertible debentures (note 11) | 327,503 | - |
| Total liabilities | 1,573,221 | 1,803,270 |
| Shareholders' deficiency | ||
| Share capital (note 13) | 37,581,968 | 37,506,947 |
| Warrants (note 13) | 2,258,359 | 2,202,033 |
| Contributed surplus (note 13) | 9,668,687 | 9,528,241 |
| Deficit | (50,698,736) | (49,672,273) |
| Total shareholders' deficiency | (1,189,722) | (435,052) |
| Total liabilities and shareholders' deficiency | $ 383,499 | $ 1,368,218 |
Going concern (note 1)
Contingencies (note 18)
Approved on behalf of the Board on December 22, 2025
(Signed) "Brian C. Imrie"
(Signed) "Ralph Garcea"
Director
Director
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Edgewater Wireless Systems Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
(Unaudited)
| Three Months Ended January 31, | Nine Months Ended January 31, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Operating expenses (note 16) | ||||
| Sales and marketing | 41,566 | 24,951 | 80,030 | 25,358 |
| General and administrative (notes 12 & 16) | 251,124 | 241,489 | 699,440 | 567,637 |
| Product development | 77,277 | (11) | 293,766 | 963 |
| Operations | (202) | 3,654 | 4,173 | 37,455 |
| Loss from operations before noted | 369,765 | 270,083 | 1,077,409 | 631,413 |
| Change in fair value of convertible debentures (note 11) | (32,791) | 296,602 | (77,976) | 355,166 |
| Interest expense (notes 9, 10 & 11) | 18,930 | 20,673 | 57,954 | 90,045 |
| Finance income | (124) | (3,506) | (6,011) | (4,233) |
| Foreign exchange (gain) loss | (1,482) | 11,551 | (2,074) | 15,422 |
| Other income (note 17) | (7,660) | - | (128,219) | - |
| Loss on amendment (notes 11 & 13) | - | - | 49,198 | - |
| Gain on write-off of payables (notes 11 & 13) | (1,295) | - | (1,295) | - |
| Net loss and comprehensive loss | $ (345,343) | $ (595,403) | $ (968,986) | $ (1,087,813) |
| Basic and diluted loss per share (note 14) | $ (0.001) | $ (0.003) | $ (0.004) | $ (0.005) |
| Weighted average number of common shares outstanding (basic and diluted) (note 14) | 238,792,871 | 210,727,896 | 238,191,555 | 201,732,043 |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
Edgewater Wireless Systems Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)
| Nine Months Ended January 31, | ||
|---|---|---|
| 2026 | 2025 | |
| Operating activities | ||
| Net loss for the period | $ (968,986) | $ (1,087,813) |
| Items not affecting cash: | ||
| Share-based payments (note 13) | 147,111 | 119,404 |
| Change in fair value of convertible debentures (note 11) | (77,976) | 355,166 |
| Interest expense (notes 9, 10 & 11) | 57,214 | 87,729 |
| Interest income | - | (462) |
| Loss on amendment (notes 11 & 13) | 49,198 | - |
| Depreciation of property and equipment (note 6) | 275 | 478 |
| Amortization on right-of-use asset (note 7) | 9,705 | 12,843 |
| Foreign exchange loss | 368 | 295 |
| Changes in non-cash operating working capital: | ||
| Amounts receivable | (166,327) | (34,331) |
| Prepaid expenses | 10,426 | 24,586 |
| Accounts payable and accrued liabilities | (178,789) | 245,978 |
| Net cash used in operating activities | (1,117,781) | (276,127) |
| Financing activities | ||
| Proceeds from private placements (note 13) | - | 1,840,000 |
| Share issuance costs (note 13) | - | (38,150) |
| Repayment of notes and loan payable (note 10) | (2,284) | (2,262) |
| Lease liability payments (note 9) | (10,575) | (16,029) |
| Net cash (used in) provided by financing activities | (12,859) | 1,783,559 |
| Investing activities | ||
| Purchase of equipment (note 6) | - | (495) |
| Net cash used in investing activities | - | (495) |
| Net change in cash | (1,130,640) | 1,506,937 |
| Cash, beginning of period | 1,143,967 | 99,393 |
| Cash, end of period | $ 13,327 | $ 1,606,330 |
| Non-cash items not included in cash flows | ||
| Shares issued for settlement of interest on convertible debentures (note 13) | $ 35,996 | $ 17,851 |
| Units issued for conversion of convertible debentures (note 13) | $ 3,325 | $ 75,000 |
| Shares issued as payment of share issuance cost (note 13) | $ - | $ 107,310 |
| Warrants issued as payment of share issuance cost (note 11) | $ - | $ 111,911 |
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Edgewater Wireless Systems Inc.
Condensed Interim Consolidated Statements of Changes in Shareholders' Deficiency
(Expressed in Canadian Dollars)
(Unaudited)
| Share capital | Warrants | Contributed surplus | Deficit | Total | |
|---|---|---|---|---|---|
| Balance, April 30, 2024 | $ 36,503,080 | $ 983,250 | $ 8,478,231 | $ (47,615,280) | $ (1,650,719) |
| Share-based payments (note 13(d)) | - | - | 119,404 | - | 119,404 |
| Shares issued to settle interest on convertible debenture (note 11) | 17,851 | - | - | - | 17,851 |
| Private placements (note 13(b)) | 1,080,750 | 1,053,471 | - | - | 2,134,221 |
| Issuance costs (note 13(b)) | (130,828) | (126,543) | - | - | (257,371) |
| Net loss and comprehensive loss | - | - | - | (1,087,813) | (1,087,813) |
| Balance, January 31, 2025 | $ 37,470,853 | $ 1,910,178 | $ 8,597,635 | $ (48,703,093) | $ (724,427) |
| Balance, April 30, 2025 | $ 37,506,947 | $ 2,202,033 | $ 9,528,241 | $ (49,672,273) | $ (435,052) |
| Share-based payments (notes 13(d)) | - | - | 140,536 | - | 140,536 |
| Shares issued to settle interest on convertible debenture (note 11) | 71,697 | - | - | - | 71,697 |
| Units issued for conversion of convertible debentures (note 11) | 3,324 | 1 | (1,242) | - | 2,083 |
| Warrants expired (note 13(c)) | - | (1,152) | 1,152 | - | - |
| Warrant extension (note 13(c)) | - | 57,477 | - | (57,477) | - |
| Net loss and comprehensive loss | - | - | - | (968,986) | (968,986) |
| Balance, January 31, 2026 | $ 37,581,968 | $ 2,258,359 | $ 9,668,687 | $ (50,698,736) | $ (1,189,722) |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
- NATURE OF OPERATIONS AND GOING CONCERN
Incorporated under the Canada Business Act, Edgewater Wireless Systems Inc. (the "Company") main activity is developing and commercializing leading edge technologies and intellectual property for the communications market. The Company's head office is Suite 127, 390 March Road, Ottawa, Ontario, Canada.
These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards. The going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business.
The Company has not earned substantial revenue from the sale of its products and is, therefore, considered to be in the development stage. For the nine months ended January 31, 2026, the Company incurred a net loss of $968,986 (nine months ended January 31, 2025 – $1,087,813) and negative cash flow from operating activities of $1,117,781 (nine months ended January 31, 2025 – $276,127). In addition, the Company had a deficit of $50,698,736 (April 30, 2025 – $49,672,273) and a working capital deficiency (current assets less current liabilities) of $807,299 (April 30, 2025 – $388,936) at January 31, 2026. As a result of the above factors, a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. The continuation of the Company's operations, including product development and marketing activities, is dependent upon the Company's ability to successfully fund its working capital requirements through either debt or equity financing. The Company is currently considering a number of options including conversion of the convertible debentures maturing on September 1, 2027. There are no material changes to report at this time.
Management will need to secure additional financing in sufficient time to complete its planned programs for the nine months ended January 31, 2026. There can be no assurance that the capital will be available as necessary to meet these continuing expenditures or, if the capital is available, that it will be on terms acceptable to the Company. If the Company cannot secure additional financing on terms acceptable to it or generate product sales with upfront payments, the Company will have to consider additional strategic alternatives which may include, among other strategies, additional cost curtailments, exploring the monetization of intangible assets, seeking to out-license and/or divest assets, winding up, dissolution or liquidation of the Company.
The unaudited condensed interim consolidated financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the going concern basis were not appropriate for these consolidated financial statements, then adjustments would be necessary in the carrying value of the assets and liabilities, the reported revenue and expenses and the consolidated statement of financial position classifications used.
- BASIS OF PRESENTATION
Statement of compliance
These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34"), and follow the same accounting policies and methods of application as the annual consolidated financial statements of the Company for the year ended April 30, 2025, except as noted below under changes in accounting policies. Accordingly, they do not contain all disclosures required by International Financial Reporting Standards ("IFRS") and should be read in conjunction with the annual consolidated financial statements for the year ended April 30, 2025 and the notes thereto. These unaudited condensed interim consolidated financial statements were approved by the Board of Directors of the Company on March 30, 2026.
These unaudited condensed interim consolidated financial statements have been prepared under the historical cost convention, except for certain financial instruments measured at fair value, as set out in the accounting policies in note 3 of the annual consolidated financial statements for the year ended April 30, 2025.
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
2. BASIS OF PRESENTATION (continued)
Statement of compliance (continued)
The preparation of these unaudited condensed interim consolidated financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual consolidated financial statements for the year ended April 30, 2025.
3. MATERIAL ACCOUNTING POLICIES
New accounting policies adopted
Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after May 1, 2025. Many are not applicable or do not have a significant impact to the Company and have been excluded. The Company has adopted the following policy effective May 1, 2025.
Amendments to IAS 21
Lack of exchangeability requires an entity to use a consistent approach when exchanging a currency into another. If the currency is unexchangeable, a consistent approach must be used in determining the exchange rate and necessary disclosures. The amendments are effective for annual periods beginning on or after January 1, 2025. There was no significant impact to the Company.
New accounting pronouncements to be adopted
At January 31, 2026, the following standards and interpretations which may be applicable to the Company, but have not yet been applied in these consolidated financial statements, were in issue but not yet effective:
IFRS 18, Presentation and Disclosure in Financial Statements
In April 2024, the IASB released IFRS 18 Presentation and Disclosure in Financial Statements. IFRS 18 replaces IAS 1 Presentation of Financial Statements while carrying forward many of the requirements in IAS 1, IFRS 18 introduces new requirements to: i) present specified categories and defined subtotals in the statement of earnings, ii) provide disclosures on management-defined performance measures in the notes to the financial statements, iii) improve aggregation and disaggregation. Some of the requirements in IAS 1 are moved to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and IFRS 7 Financial Instruments: Disclosures. The IASB also made minor amendments to IAS 7 Statement of Cash Flows and IAS 33 Earnings per Share in connection with the new standard. IFRS 18 requires retrospective application with specific transition provisions. The Company is required to apply IFRS 18 for annual reporting periods beginning on or after January 1, 2027 with early adoption permitted. The Company has not early adopted this IFRS.
4. SHORT-TERM INVESTMENT
On February 2024, the Company had invested $11,010 in a guaranteed investment certificate ("GIC") bearing an annual interest rate of 4.25% and maturing in February 2025. The Company redeemed the GIC on February 2025.
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
5. AMOUNTS RECEIVABLE
The composition of amounts receivable was as follows:
| As at January 31, 2026 | As at April 30, 2025 | |
|---|---|---|
| Grant receivable (note 17) | $ 95,233 | $ - |
| Trade receivable | 31,157 | - |
| HST receivable | 89,761 | 49,824 |
| $ 216,151 | $ 49,824 |
6. PROPERTY AND EQUIPMENT
| Cost | Laboratory equipment | Computer hardware | Furniture and fixtures | Total |
|---|---|---|---|---|
| Balance at April 30, 2024 | $ 175,586 | $ 118,275 | $ 10,799 | $ 304,660 |
| Additions | - | 495 | - | 495 |
| Balance at April 30, 2025 | $ 175,586 | $ 118,770 | $ 10,799 | $ 305,155 |
| Additions | - | - | - | - |
| Balance at January 31, 2026 | $ 175,586 | $ 118,770 | $ 10,799 | $ 305,155 |
| Accumulated Depreciation | Laboratory equipment | Computer hardware | Furniture and fixtures | Total |
| Balance at April 30, 2024 | $ 175,586 | $ 117,136 | $ 10,799 | $ 303,521 |
| Depreciation | - | 608 | - | 608 |
| Balance at April 30, 2025 | $ 175,586 | $ 117,744 | $ 10,799 | $ 304,129 |
| Depreciation | - | 275 | - | 275 |
| Balance at January 31, 2026 | $ 175,586 | $ 118,019 | $ 10,799 | $ 304,404 |
| Net Book Value | Laboratory equipment | Computer hardware | Furniture and fixtures | Total |
| Balance at April 30, 2025 | $ - | $ 1,026 | $ - | $ 1,026 |
| Balance at January 31, 2026 | $ - | $ 751 | $ - | $ 751 |
The following table presents the depreciation expense by function for the three and nine months ended January 31, 2026 and 2025:
| Three Months Ended January 31, | Nine Months Ended January 31, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| General and administrative | $ 48 | $ 140 | $ 110 | $ 475 |
| Product development | 39 | (11) | 165 | 3 |
| $ 87 | $ 129 | $ 275 | $ 478 |
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
7. RIGHT-OF-USE ASSET
| Office right-of-use asset | |
|---|---|
| Balance at April 30, 2024 | $ 17,127 |
| Addition | 14,018 |
| Amortization | (17,127) |
| Balance at April 30, 2025 | $ 14,018 |
| Amortization | (9,705) |
| Balance at January 31, 2026 | $ 4,313 |
8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
| As at January 31, 2026 | As at April 30, 2025 | |
|---|---|---|
| Trade accounts payable and accruals | $ 576,402 | $ 748,984 |
| Accrued salaries | 302,181 | 308,388 |
| $ 878,583 | $ 1,057,372 |
9. LEASE LIABILITY
The Company entered into a three-year office lease at its 11 Hines Road location in Kanata, Ontario with the facility being fully available on May 1, 2022. The lease matured on April 30, 2025. On April 11, 2025, the Company amended the lease to relocate the office lease from 11 Hines Road in Kanata, Ontario to 390 March Road in Ottawa, Ontario, and extended the term of the lease for a period of 1 year and 1 month, commencing on May 1, 2025 and matures on May 31, 2026. As at January 31, 2026, the present value of the lease using a 15% discount rate was $4,557.
| Balance at April 30, 2024 | $ 19,732 |
|---|---|
| Addition | 14,018 |
| Interest expense | 1,640 |
| Lease payments | (21,372) |
| Balance at April 30, 2025 | $ 14,018 |
| Interest expense | 1,114 |
| Lease payments | (10,575) |
| Balance at January 31, 2026 | $ 4,557 |
Allocated as:
| As at January 31, 2026 | As at April 30, 2025 | |
|---|---|---|
| Current | $ 4,557 | $ 12,858 |
| Non-current | - | 1,160 |
| Total lease liability | $ 4,557 | $ 14,018 |
The maturity analysis of the undiscounted contractual balances of the lease liability is as follows:
Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
- LEASE LIABILITY (continued)
| As at January 31, 2026 | As at April 30, 2025 | |
|---|---|---|
| Less than one year | $ 4,700 | $ 14,100 |
| More than one year | - | 1,175 |
| $ 4,700 | $ 15,275 |
During the nine months ended January 31, 2025, the Company recorded $4,331 for rental of a storage locker, which was expensed as operations. The Company did not recognize a right-of-use asset as the lease had a term of less than 12 months and is also considered a low-value asset.
- NOTES AND LOAN PAYABLE
| As at January 31, 2026 | As at April 30, 2025 | |
|---|---|---|
| Loan payable to the Government of Canada under the Canada Emergency Business Account (CEBA) program bearing interest of 5.0% per annum, due on December 31, 2026. | $ 59,984 | $ 60,000 |
| Note payable issued September 2015 non-interest bearing, effective rate of 6.0% per annum, payable on demand in one payment of $13,705 (Euro 8,502). | 13,705 | 13,337 |
| $ 73,689 | $ 73,337 | |
| Less: current portion | (13,705) | (13,337) |
| $ 59,984 | $ 60,000 |
During the year ended April 30, 2021, the Company applied and received $60,000 under the CEBA program offered by the Government of Canada. The CEBA loan has no repayment terms and are non-interest bearing during the initial term, until January 18, 2024. The Company has applied an interest rate of 12% in calculating the fair value of the interest free loan, and the $22,883 residual was initially recorded as deferred government assistance.
On January 18, 2024, the remaining outstanding loan balance was converted into a term loan at fixed interest rate of 5% per annum, due on December 31, 2026. If $40,000 of the loan is repaid by January 18, 2024, the remaining $20,000 of the loan will be forgiven. If the Company applies for refinancing with the financial institution that provided the loan by January 18, 2024, the Company may still qualify for the $20,000 loan forgiveness, if $40,000 of the loan and any outstanding interest is paid back by March 28, 2024. The Company did not qualify for the $20,000 loan forgiveness, and the interest free loan initially recorded as deferred government assistance was reclassified as loan payable subsequent to March 28, 2024.
Notes and loan payable
| Balance at April 30, 2024 | $ 72,494 |
|---|---|
| Repayment of loan payable | (2,294) |
| Interest expense | 2,294 |
| Foreign exchange adjustments | 843 |
| Balance at April 30, 2025 | $ 73,337 |
| Repayment of loan payable | (2,284) |
| Interest expense | 2,268 |
| Foreign exchange adjustments | 368 |
| Balance at January 31, 2026 | $ 73,689 |
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
11. CONVERTIBLE DEBENTURES
On September 1, 2022, the Company issued non-secured convertible debentures for proceeds of $716,000 which mature on September 1, 2025 ("convertible debentures"). The convertible debentures bear annual interest at 10%, payable quarterly, in shares or cash, at the discretion of management. If the Company elects to pay in shares, the interest payments are based on the price per share which equals the higher of (i) the market price on the date the interest becomes payable or (ii) the volume weighted average trading price of the Company's shares for ten (10) consecutive trading days preceding the date the interest becomes payable. The principal of the convertible debentures is convertible, as described below, into Units which represent one common share and one warrant to purchase one common share at an exercise price of $0.23 for a period of three years after September 1, 2022. The Company can elect to accelerate expiry of the Warrant if the volume weighted average trading price of the Company's shares exceeds $0.30 for ten consecutive trading days. The principal is convertible to Units at the option of the holders at any time after January 1, 2023 and at the option of the Company at any time after September 1, 2023 at $0.12 per Unit. The Company has the option to prepay the convertible debentures and accrued but unpaid interest at any time after September 1, 2023.
The convertible debentures, which are hybrid instruments, were initially elected to be recognized at fair value through profit and loss. On initial recognition, the liability component of the convertible debentures was valued at $538,214 determined by the sum of the fair values of the host debt and the net conversion and redemption feature. The host debt was valued at $611,732 based on the terms above and selected market yield of 30%. The net conversion and redemption feature was valued at $73,518 using the following assumptions: interest rate of 10%, unit price of $0.08, exercise price of $0.12, discount rate of 30%, volatility of 100%, risk-free rate of 3.51%, and expected life of 1 year. The unit price is determined as the share price plus the fair value of each warrant. Each warrant was valued at $0.01 using the barrier option model as they are subject to an acceleration feature if the volume weighted average price of the shares exceed $0.30 for 10 consecutive days. The following assumptions were used: share price of $0.07, exercise price of $0.23, barrier of $0.30, rebate of $0.07, volatility of 85%, risk-free rate of 3.54%, and expected life of 3 years.
Since the convertible debentures were entered into with non-arm's length related parties, the difference between the fair value at inception and the proceeds received from the convertible debentures of $177,786 was recognized as a capital contribution and included in contributed surplus.
The redemption feature of the convertible debentures became effective on September 1, 2023. As such, the Company holds the discretion to force the conversion of the host debt into units if the price per unit falls below $0.12. Since the fair value of units is below $0.12 as of the valuation date, the fair value of the convertible debentures is determined to equal to fair value of the units. As at January 31, 2026, the liability component of the convertible debentures was valued at $327,503 using the barrier option model with the following assumptions: share price of $0.05, exercise price of $0.23, barrier of $0.30, rebate of $0.07, volatility of 100%, risk-free rate of 3.55%, and expected life of 1.58 years.
During the nine months ended January 31, 2026, the Company received approval from TSX Venture Exchange to amend the terms of its unsecured convertible debentures originally issued on September 1, 2022 with an aggregate principal of $711,000. The original maturity date of September 1, 2025 has been extended by two years to September 1, 2027 (the "Amended Maturity Date").
The Company has also added an acceleration provision to the convertible debentures, pursuant to which it will be permitted, at its election, to convert the principal amount of the convertible debentures into units if the daily volume weighted average trading price of the Company's common shares is $0.18 or greater for ten consecutive trading days. In order to align with the Amended Maturity Date, the Company has also amended the expiry date of the warrants such that if issued, the warrants will expire on the Amended Maturity Date. All other terms of the convertible debentures remain the same.
During the nine months ended January 31, 2026, the Company recorded a loss on amendment of $49,198.
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
11. CONVERTIBLE DEBENTURES (continued)
The following table depicts the activity related to the convertible debentures for the nine months ended January 31, 2026 and year ended April 30, 2025.
| Convertible Debentures | Contributed Surplus | |
|---|---|---|
| Balance at April 30, 2024 | $ 181,834 | $ 177,786 |
| Interest expense | 102,005 | - |
| Settlement of interest through issuance of common shares (note 13) | (53,945) | - |
| Non-credit risk fair value adjustment | 176,530 | - |
| Balance at April 30, 2025 | $ 406,424 | $ 177,786 |
| Interest expense | 53,832 | - |
| Conversion of convertible debentures (note 13) | (2,083) | (1,242) |
| Settlement of interest through issuance of common shares (note 13) | (71,697) | - |
| Non-credit risk fair value adjustment | (77,976) | - |
| Loss on amendment | 49,198 | - |
| Balance at January 31, 2026 | $ 357,698 | $ 176,544 |
| Allocated as: | ||
| Current | $ 30,195 | |
| Non-current | 327,503 | |
| Balance, January 31, 2026 | $ 357,698 |
12. RELATED PARTY TRANSACTIONS
During the nine months ended January 31, 2026 and 2024, the Company paid no amounts to directors or senior management of the Company other than as remuneration in their capacity as directors or employees or reimbursement of expenses incurred traveling in the performance of their duties. The Company's compensation program provides that total compensation for senior management may include a combination of base salary, and objective-based incentives as well as the same health and insurance benefit programs as provided to all other employees. All directors and officers are eligible to receive stock options (see note 13(d)).
Senior management personnel are not entitled to any post-employment benefits other than those available to all employees.
Accounts payable and accrued liabilities at January 31, 2026 includes $11,837 (April 30, 2025 - $1,969) due to related parties.
| Three Months Ended January 31, | Nine Months Ended January 31, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Compensation and benefits | $ 82,739 | $ 47,010 | $ 174,211 | $ 138,272 |
| Share-based payments | 45,377 | 22,180 | 72,463 | 85,898 |
| $ 128,116 | $ 69,190 | $ 246,674 | $ 224,170 |
Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
13. SHARE CAPITAL
a) Authorized
- Unlimited number of common shares of no par value;
- 1,600,000 convertible preferred shares Series 1; and
- Unlimited number of convertible voting preferred shares Series 2.
b) Issued
| Number of common shares | Amount | |
|---|---|---|
| Balance at April 30, 2024 | 196,948,891 | $ 36,503,080 |
| Shares issued to settle interest on convertible debentures (note 11) | 357,016 | 17,851 |
| Shares issued in private placement | 38,300,000 | 973,440 |
| Shares issued as payment of share issuance cost | 1,533,000 | 107,310 |
| Share issuance costs | - | (130,828) |
| Balance at January 31, 2025 | 237,138,907 | $ 37,470,853 |
| Balance at April 30, 2025 | 237,860,779 | $ 37,506,947 |
| Shares issued to settle interest on convertible debentures (note 11) | 1,232,086 | 71,697 |
| Shares issued for conversion of convertible debentures (note 11) | 41,666 | 3,324 |
| Balance at January 31, 2026 | 239,134,531 | $ 37,581,968 |
On June 6, 2024, the Company settled its obligation to pay an aggregate of $17,851 interest as of March 1, 2024, to the holders of its unsecured debentures issued September 1, 2022 through the issuance of an aggregate of 357,016 common shares of the Company at a deemed price of $0.05 per share.
On December 31, 2024, the Company closed its non-brokered private placement (the "Dec 2024 Private Placement") of 38,300,000 units of the Company (the "Units") at a price of $0.05 per Unit, for gross proceeds of $1,915,000. Each Unit is comprised of one common share and one common share purchase warrant (a "Warrant") of the Company. Each Warrant is exercisable into one common share at a price of $0.08 per share for a period of 24 months from the date of issuance.
The gross proceeds of $1,915,000 were allocated between share capital (in the amount of $973,440) and the warrant reserve (in the amount of $941,560) on a relative fair value basis. The Company incurred cash commissions of $17,150, legal fees of $21,000, and issued 1,533,000 common shares with a fair value of $107,310 and 2,314,000 finder's warrants with a fair value of $111,911, for total share issuance costs of $257,371, out of which $130,828 related to the common share portion was recorded as a reduction of share capital and $126,543 related to the warrant portion was recorded as a reduction to the warrant reserve.
On June 20, 2025, $5,000 of the convertible debentures was converted into 41,666 Units. Each Unit is comprised of one common share and one warrant of the Company. Each warrant is exercisable into one common share at a price of $0.23 per share until September 1, 2025. The Company reclassified the carrying value of $2,084 for the liability component, and associated equity component of $1,241 from contributed surplus to share capital (in the amount of $3,324) and warrants reserve (in the amount of $1) on a relative fair value basis.
On November 10, 2025, the Company settled its obligation to pay an aggregate of $17,851 interest as of December 1, 2024, and $17,851 interest as of March 1, 2025 to the holders of its unsecured debentures issued September 1, 2022 through the issuance of an aggregate of 357,016 common shares of the Company at a deemed price of $0.05 per share and 238,010 common shares of the Company at a deemed price of $0.075 per share.
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
13. SHARE CAPITAL (continued)
b) Issued (continued)
On December 10, 2025, the Company settled its obligation to pay an aggregate of $18,047 interest as of June 1, 2025, and $17,948 interest as of September 1, 2025, to the holders of its unsecured debentures issued September 1, 2022 through the issuance of an aggregate of 360,936 common shares of the Company at a deemed price of $0.05 per share and 276,214 common shares of the Company at a deemed price of $0.065 per share.
There were no preferred shares of either series issued or outstanding at the dates of the statements of financial position presented.
c) Warrants
The following table reflects the continuity of warrants for the nine months ended January 31, 2026 and 2025:
| Number of Warrants | Weighted Average Exercise Price ($) | |
|---|---|---|
| Balance, April 30, 2024 and January 31, 2025 | 25,635,133 | 0.19 |
| Issued | 40,614,000 | 0.08 |
| Balance, January 31, 2025 | 66,249,133 | 0.12 |
| Balance, April 30, 2025 | 67,837,139 | 0.07 |
| Issued | 41,666 | 0.23 |
| Expired | (122,166) | 0.14 |
| Balance, January 31, 2026 | 67,756,639 | 0.07 |
On June 20, 2025, as part of the conversion of the $5,000 principal of convertible debentures, the Company issued 41,666 warrants, exercisable into one common share at a price of $0.23 per share until September 1, 2025. The value allocated to the warrants was determined to be $1 based on the relative fair value between the fair value of the common shares and the fair value of warrants issued in the conversion. The fair value of the warrants was determined using the Black-Scholes option pricing model with the following assumptions: share price of $0.05, dividend yield of 0%, volatility of 117.68%, risk-free rate of 2.65%, and expected life of 0.2 years.
The following table reflects the actual warrants issued and outstanding as at January 31, 2026:
| Expiry Date | Exercise Price($) | Number of Warrants Outstanding |
|---|---|---|
| December 20, 2026 | 0.10 | 7,830,000 |
| December 31, 2026 | 0.08 | 40,614,000 |
| February 26, 2027 | 0.10 | 500,000 |
| February 19, 2030 | 0.05 | 18,812,639 |
| 0.07 | 67,756,639 |
The Company recorded a total of $57,477 adjustment to warrants reserve and deficit.
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
13. SHARE CAPITAL (continued)
d) Stock options
The Company's equity incentive plan provides the Company with the ability to issue stock options, restricted share units, performance share units, and deferred share units (together, the "Awards") to directors, officers, employees or consultants of the Company or its subsidiaries. that total options outstanding be limited to a maximum of 10% of the issued and outstanding common shares, calculated at the time of each grant. The aggregate number of common shares reserved for issuance in respect of Awards granted under the plan will not, in the aggregate, exceed 47,669,494 common shares, representing 20% of the total number of issued and outstanding common shares (calculated on a non-diluted basis) at the date of implementation of the plan. The plan further provides that vesting requirements, pricing and term are all established, at the discretion of the Board of Directors, at the time of each grant, subject to a maximum term of 10 years and any regulatory restrictions.
The following table reflects the continuity of stock options for the nine months ended January 31, 2026 and 2025:
| Number of Stock Options | Weighted Average Exercise Price ($) | |
|---|---|---|
| Balance, April 30, 2024 | 15,645,001 | 0.14 |
| Granted | 4,050,000 | 0.05 |
| Expired | (2,300,001) | 0.05 |
| Balance, January 31, 2025 | 17,395,000 | 0.13 |
| Balance, April 30, 2025 | 17,395,000 | 0.13 |
| Granted | 6,800,000 | 0.05 |
| Expired | (2,005,000) | 0.26 |
| Balance, January 31, 2026 | 22,190,000 | 0.12 |
On September 9, 2024, the Company granted 4,050,000 options, exercisable at a price of $0.05 per share to certain employees, consultants and directors of the Company, expiring September 9, 2029. These options will vest 33% immediately, 33% on the first anniversary of the date of grant, and 34% on the second anniversary of the date of grant. The fair value of these options was determined to be $140,130 using the Black-Scholes option pricing model with the following assumptions: share price of $0.04, dividend yield of 0%, expected volatility of 136.04%, risk-free interest rate of 2.77% and expected life of 5 years.
On May 30, 2025, the Company granted 500,000 options, exercisable at a price of $0.05 per share to a certain consultant of the Company, expiring May 30, 2030. These options will vest 33% immediately, 33% on the first anniversary of the date of grant, and 34% on the second anniversary of the date of grant. The fair value of these options was determined to be $22,250 using the Black-Scholes option pricing model with the following assumptions: share price of $0.05, dividend yield of 0%, expected volatility of 139.52%, risk-free interest rate of 2.80% and expected life of 5 years.
On January 7, 2026, the Company granted 6,300,000 options, exercisable at a price of $0.05 per share to a certain directors, officers, employees and consultants of the Company, expiring January 7, 2031. 5,400,000 of the options will vest 33% immediately, 33% on the first anniversary of the date of grant, and 34% on the second anniversary of the date of grant. 900,000 of the options will vest 25% immediately, and the remaining 75% vesting in equal 25% installments at 6 months, 12 months and 18 months from the date of grant. The fair value of these options was determined to be $223,020 using the Black-Scholes option pricing model with the following assumptions: share price of $0.04, dividend yield of 0%, expected volatility of 143.05%, risk-free interest rate of 2.93% and expected life of 5 years.
During the three and nine months ended January 31, 2026, share-based payments of $91,945 and $140,536, respectively (three and nine months ended January 31, 2025 – $30,355 and $119,404, respectively) were expensed as general and administrative.
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
13. SHARE CAPITAL (continued)
d) Stock options (continued)
The following table reflects the actual stock options issued and outstanding as at January 31, 2026:
| Expiry Date | Exercise Price($) | Remaining Contractual Life (years) | Number of Options Outstanding | Number of Options Vested (Exercisable) |
|---|---|---|---|---|
| February 16, 2027 | 0.31 | 1.04 | 1,565,000 | 1,565,000 |
| November 7, 2028 | 0.16 | 2.77 | 1,885,000 | 1,885,000 |
| February 16, 2029 | 0.05 | 3.05 | 2,900,000 | 1,992,000 |
| April 28, 2029 | 0.14 | 3.24 | 2,000,000 | 2,000,000 |
| June 15, 2029 | 0.135 | 3.37 | 1,450,000 | 1,450,000 |
| September 9, 2029 | 0.05 | 3.61 | 4,050,000 | 2,673,000 |
| May 30, 2030 | 0.05 | 4.33 | 500,000 | 165,000 |
| November 22, 2030 | 0.08 | 4.81 | 1,540,000 | 1,540,000 |
| January 7, 2031 | 0.05 | 4.94 | 6,300,000 | 2,007,000 |
| 0.12 | 3.79 | 22,190,000 | 15,277,000 |
e) Deferred share units ("DSUs")
The Company's equity incentive plan provides the Company with the ability to issue stock options, restricted share units, performance share units, and deferred share units (together, the "Awards") to directors, officers, employees or consultants of the Company or its subsidiaries. that total options outstanding be limited to a maximum of 10% of the issued and outstanding common shares, calculated at the time of each grant. The aggregate number of common shares reserved for issuance in respect of Awards granted under the plan will not, in the aggregate, exceed 47,669,494 common shares, representing 20% of the total number of issued and outstanding common shares (calculated on a non-diluted basis) at the date of implementation of the plan. The plan further provides that vesting requirements, pricing and term are all established, at the discretion of the Board of Directors, at the time of each grant, subject to a maximum term of 10 years and any regulatory restrictions.
The following table reflects the continuity of DSUs for the nine months ended January 31, 2026:
| Number of DSUs | |
|---|---|
| Balance, April 30, 2025 | - |
| Granted | 2,500,000 |
| Balance, January 31, 2026 | 2,500,000 |
On January 7, 2026, the Company granted 2,500,000 DSUs to certain directors and officers of the Company. A fair value of $100,000 was determined based on the fair value of the Company's share price at the date of grant. The DSUs vest after one year from the date of grant.
During the three and nine months ended January 31, 2026, share-based payments of $6,575 (three and nine months ended January 31, 2025 – $nil) were expensed as general and administrative.
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
14. NET LOSS PER COMMON SHARE
The calculation of basic and diluted loss per share for the three and nine months ended January 31, 2026 was based on the loss attributable to common shareholders of $345,343 and $968,986, respectively (three and nine months ended January 31, 2025 - $595,403 and $1,087,813, respectively) and the weighted average number of basic common shares outstanding of 238,792,871 and 238,191,555, respectively (three and nine months ended January 31, 2025 - 210,727,896 and 201,732,043, respectively). For the nine months ended January 31, 2026 and 2025, all potential dilutive stock options and warrants were excluded from the diluted loss per share calculations as they are anti-dilutive.
15. OPERATING SEGMENTS
The Company's Chief Executive Officer ("CEO") has been identified as the chief operating decision maker. The CEO evaluates the performance of the Company and allocates resources based on the information provided by the Company's internal management system at a consolidated level. The Company has determined that it has only one operating segment.
The Company derives all of its revenues from a single product segment comprised of of silicon solutions, wireless access points, associated peripherals and support services. The Company derives its revenues globally and all sales are attributed to the Canadian head office. All of the Company's assets are in Canada. The same products and services are offered for sale in all geographic regions at the same average gross margins.
16. NATURE OF EXPENSES
The consolidated statements of loss and comprehensive loss presents the expenses of the Company categorized by their function. The table below provides supplementary information regarding some of the major expenses categorized by their nature.
| Three Months Ended January 31, | Nine Months Ended January 31, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Compensation, employees and directors | $ 82,739 | $ 50,680 | $ 177,144 | $ 141,942 |
| Share-based payments | 98,520 | 30,355 | 147,111 | 119,404 |
| Advertising and promotion | 35,976 | - | 35,976 | - |
| Depreciation and amortization | 3,323 | 4,410 | 9,980 | 13,321 |
| Consulting fees | 77,620 | 104,019 | 347,222 | 112,336 |
| Materials | 7,632 | - | 9,842 | - |
| Travel | 25,749 | - | 38,008 | 586 |
| Professional, legal and regulatory fees | 59,243 | 68,475 | 241,829 | 178,128 |
| Office and administrative | (21,037) | 12,144 | 70,297 | 65,696 |
| $ 369,765 | $ 270,083 | $ 1,077,409 | $ 631,413 |
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Edgewater Wireless Systems Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three and Nine Months Ended January 31, 2026 and 2025
(Expressed in Canadian Dollars) (Unaudited)
17. OTHER INCOME
On May 28, 2025, the Company entered into an Ultimate Recipient Agreement with Canadian Microelectronics Corporation ("CMC") to receive funding under the federal Fabrication of Integrated Components for the Internet's Edge ("FABrIC") program administered by Innovation, Science and Economic Development Canada. Under this agreement, the Company is eligible to receive contributions of up to $921,000, representing up to 37% of eligible supported costs incurred on the approved project (the "Project"). The combined level of federal, provincial and other government assistance, including tax credits, cannot exceed 75% of eligible supported costs.
Funding is provided on a reimbursement basis, subject to CMC's review of quarterly claims, submission of required progress and financial reports, and compliance with all terms of the agreement. CMC may withhold up to 10% of total funding as a holdback pending satisfactory completion of the Project and final reporting. The agreement requires that the Company carry out all project activities exclusively in Canada (unless otherwise agreed to in writing by CMC and the Minister of Industry, up to 10% of total eligible supported costs) and that the Company maintain ownership of any project assets and eligible intellectual property in Canada for a minimum of five years following project completion, unless otherwise approved by CMC and the Minister of Industry.
The Company is responsible for all costs of the Project in excess of the approved funding and for any cost overruns. All amounts received under the FABrIC program are recorded as other income in the period in which the related eligible expenditures are incurred and reasonable assurance of receipt is obtained.
During the three and nine months ended January 31, 2026, the Company recognized $7,660 and $128,219, respectively (three and nine months ended January 31, 2025 - $nil) of funding as other income. As at January 31, 2026, the Company has recorded a grant receivable of $95,233 (April 30, 2025 - $nil) for eligible costs incurred but not yet reimbursed (note 5).
18. CONTINGENCIES
The Company is aware of a possible claim that may exist against the Company which relates to a fractional interest that one of the predecessor companies to EWSI had acquired in an oil well. The history of this transaction dates from the 1980's. Initially, the potential claimant proposed a quit claim settlement which the Company agreed to in an amount of $6,991. Settlement is pending, no estimate of any additional claims can be made at this time. That amount has been established in accrued liabilities. There have been no developments during the nine months ended January 31, 2026.
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