Elysee Development Corp. — Interim / Quarterly Report 2025

May 7, 2025

ELYSEE

DEVELOPMENT CORP.

Condensed Consolidated Interim Financial Statements

First quarter ended March 31, 2025

(Unaudited)

(Expressed in Canadian dollars)

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NOTICE OF NO AUDITOR REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

The accompanying unaudited condensed consolidated interim financial statements of Elysee Development Corp. (the "Company") have been prepared by and are the responsibility of the Company's management. The unaudited condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting Standards and reflect management's best estimates and judgements based on information currently available.

The Company's independent auditor has not performed a review of these condensed consolidated interim financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.

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Elysee Development Corp.
Consolidated Statements of Financial Position

(Expressed in Canadian dollars)

	Notes	March 31, 2025	December 31, 2024 (audited)
ASSETS
Current assets
Cash and cash equivalents	4	$ 1,886,015	$ 1,532,977
Interest receivable		8,842	-
Prepaid expenses	5	1,222	3,903
Marketable securities	6	11,635,816	10,039,901
Other investments - current	6	232,008	223,929
		13,763,903	11,800,710
Other investments	6	2,026,141	2,021,141
Total assets		$ 15,790,044	$ 13,821,851
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables	7	$ 45,899	$ 68,192
Due to related parties	13	50,000	-
Total current liabilities		95,899	68,192
Non-current liabilities
Convertible debentures	8	1,815,786	1,804,282
Total liabilities		1,911,685	1,872,474
Equity
Common shares	9	43,225,173	43,225,173
Contributed surplus	8 & 9	14,277,903	14,271,785
Deficit		(43,624,717)	(45,547,581)
Total equity		13,878,359	11,949,377
Total liabilities and equity		$ 15,790,044	$ 13,821,851

Basis of Preparation (Note 2) and Subsequent Events (Note 15)

APPROVED ON BEHALF OF THE BOARD:

“Martin Burian” Director “Guido Cloetens” Director
Martin Burian Guido Cloetens

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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Elysee Development Corp.

Consolidated Statements of Earnings and Comprehensive Earnings

(Expressed in Canadian dollars)

	Notes	Three months ended March 31, 2025	Three months ended March 31 2024
Investment income (loss)
Realized gain (loss) on sale of marketable securities	6	$ 479,550	$ (146,587)
Transaction costs	6	(6,048)	(4,075)
Unrealized gain on marketable securities	6	1,583,261	484,727
Unrealized foreign exchange gain		13,952	2,565
Interest and dividend income		54,024	58,285
Total investment income		2,124,739	394,915
General and administrative expenses
Advertising and promotion		446	415
Bank charges		473	1,450
Consulting		8,348	12,600
Director fees	13	4,804	4,725
Interest and accretion	8	50,956	-
Legal and accounting	13	42,724	22,564
Management fees	13	60,000	30,000
Office and miscellaneous		14,211	14,168
Share-based payments	9 & 13	6,118	5,271
Transfer agent, filing fees and shareholder communications		13,295	11,996
Travel		500	13,290
Total general and administrative expenses		(201,875)	(116,479)
Net earnings and comprehensive earnings for the period		$ 1,922,864	$ 278,436
Basic and diluted earnings per share
Earnings per share – basic	10	$ 0.07	$ 0.01
Earnings per share – diluted	10	$ 0.06	$ 0.01

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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Elysee Development Corp.
Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)

	Notes	Three months ended March 31, 2025	Three months ended March 31, 2024
OPERATING ACTIVITIES
Earnings for the period		$ 1,922,864	$ 278,436
Adjustments for:
Accrued interest income		(8,842)	(46,954)
Accretion		11,504	-
Share-based payments	9 & 13	6,118	5,271
Realized (gain) loss on sale of marketable securities, net of transaction costs	6	(473,502)	150,662
Unrealized (gain) on marketable securities and other investments	6	(1,583,261)	(484,727)
Purchase of investments	6	(1,317,861)	(643,999)
Proceeds from sale of investments	6	1,765,630	751,170
Adjustments for non-cash working capital items:
Decrease in receivables		-	52,716
Decrease (increase) in prepaid expenses		2,681	(9,238)
(Decrease) in trade and other payables		(22,293)	(14,057)
Increase in due to related parties	13	50,000	-
Cash and cash equivalents (used in) provided by operating activities		353,038	39,280
FINANCING ACTIVITIES
Purchase of common shares returned to treasury	9	-	(44,403)
Cash and cash equivalents provided by (used in) financing activities		-	(44,403)
Increase (decrease) in cash and cash equivalents		353,038	(5,123)
Cash and cash equivalents, beginning of year		1,532,977	849,798
Cash and cash equivalents, end of period (Note 4)		$ 1,866,015	$ 844,675

Supplemental cash flow information (Note 14)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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Elysee Development Corp.

Consolidated Statements of Changes in Equity

(Expressed in Canadian dollars)

	Notes	Common shares		Contributed surplus	Deficit	Total
		Number	Amount
Balances, December 31, 2023		28,585,113	$ 43,627,327	$ 14,060,400	$ (46,529,809)	$ 11,157,918
Common shares returned to treasury	9	(163,500)	(249,534)	-	205,131	(44,403)
Share-based payments	9	-	-	5,271	-	5,271
Net earnings for the period		-	-	-	278,436	278,436
Balances, March 31, 2024		28,421,613	43,377,793	14,065,671	(46,046,242)	11,397,222
Balances, December 31, 2024		28,321,613	43,225,173	14,271,785	(45,547,581)	11,949,377
Common shares returned to treasury	9	-	-	-	-	-
Share-based payments	9	-	-	6,118	-	6,118
Net earnings for the period		-	-	-	1,922,864	1,922,864
Balances, March 31, 2025		28,321,613	$ 43,225,173	$ 14,277,903	$ (43,624,717)	$ 13,878,359

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

1. CORPORATE INFORMATION

Elysee Development Corp. (the "Company") was incorporated under the laws of the province of Alberta on September 6, 1996. On July 15, 2015, the Company changed its name from Alberta Star Development Corp. to Elysee Development Corp.

The Company is an investment issuer with an actively managed investment portfolio of common shares and other securities. The investments cover a broad range of activities with a focus on natural resources and in particular the precious metals sector.

The head office, principal address and registered and records office is located on the 9th floor - 1021 West Hastings Street, Vancouver, British Columbia, V6E 0C3.

The Company's condensed consolidated interim financial statements as at March 31, 2025 and for the three months then ended have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has net comprehensive earnings of $1,922,864 for the three-month period ended March 31, 2025 and has working capital of $13,668,004 as at March 31, 2025. Management believes that the Company's cash position will support operations for the next twelve months.

2. BASIS OF PREPARATION

The condensed consolidated interim financial statements of the Company for the three-month period ended March 31, 2025 were approved and authorized for issue by the Board of Directors on May 6, 2025.

Basis of presentation

The Company's condensed consolidated interim financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value, as explained in Note 12, and are presented in Canadian dollars except where otherwise indicated. In addition, the condensed consolidated interim financial statements are prepared using the accrual method of accounting, with the exception of cash flow information.

Statement of compliance

The condensed interim financial statements of the Company and its subsidiaries have been prepared in accordance with International Accounting Standards ("IAS") 34, "Interim Financial Reporting" using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

Adoption of new and revised standards and interpretations

There were no new or amended accounting standards or interpretations that had a significant impact on the Company's condensed consolidated interim financial statements during the three-month period ended March 31, 2025.

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Elysee Development Corp. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months ended March 31, 2025 (Expressed in Canadian dollars)

3. MATERIAL ACCOUNTING POLICY INFORMATION

Consolidation

These condensed consolidated interim financial statements include the accounts of the Company’s wholly-owned US subsidiary, Elysee Development (US), Inc. Intercompany balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated upon consolidation.

Significant accounting judgments, estimates and assumptions

The preparation of the Company’s condensed consolidated interim financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated interim financial statements and reported amounts of earnings and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Areas requiring a significant degree of estimation and judgment relate to the fair value measurements for financial instruments, convertible debentures, share-based payments, and the recoverability and measurement of deferred tax assets and liabilities. Actual results may differ from those estimates and judgments.

Revenue recognition

Security transactions are recorded on a trade basis. Realized gains and losses on the disposal of marketable securities and unrealized gains and losses in the value of marketable securities are reflected in the statement of earnings (loss) and comprehensive earnings (loss). Cost is calculated on an average cost basis. Upon disposal of a security, previously recognized unrealized gains or losses are reversed, so as to recognize the full realized gain or loss in the period of disposition. All transaction costs are expensed as incurred. Interest and dividend income are recognized on an accrual basis.

Cash and cash equivalents

Cash and cash equivalents include highly liquid investments with original maturities of three months or less, which are readily convertible to cash, and subject to an insignificant risk of change in value. Cash and cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

Share-based payments

Share-based payments to employees are measured at the fair value of the instruments issued and recognized over the vesting periods on a “graded” basis. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to contributed surplus. The fair value of the options is determined using the Black-Scholes Option Pricing Model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that will eventually vest.

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Elysee Development Corp. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months ended March 31, 2025 (Expressed in Canadian dollars)

Restricted share units

The restricted share units (“RSUs”) entitle employees, consultants, directors, or officers to either the issuance of common shares or cash payments payable upon vesting based on vesting terms determined by the Company’s Board of Directors at the time of grant. On the grant date of RSUs, the Company determines whether it has a present obligation to settle in cash. If the Company has a present obligation to settle in cash, the RSUs are accounted for as liabilities, with the fair value remeasured at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period. RSUs settled in common shares are measured at the fair value of awards on the grant date using the grant date closing price, are amortized over the vesting period and are included in share-based payments with a corresponding increase in equity reserves. Amounts recorded for forfeited unvested RSUs are reversed in the period the forfeiture occurs.

Taxation

Income tax expense is comprised of current and deferred income taxes. Current income tax and deferred income tax are recognized in profit or loss, except to the extent that they relate to items recognized directly in equity or equity investments.

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

Deferred income tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred income 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 income tax assets and liabilities are offset if there is a legally enforceable right to offset current income tax liabilities and assets, and they relate to income taxes levied by the same tax authority for the same taxable entity. A deferred income tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable income will be available against which they can be utilized. Deferred income tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related income tax benefit will be realized.

Foreign currency translation

The Company’s reporting currency and the functional currency of all of its operations, including it’s wholly-owned US subsidiary, is the Canadian dollar as this is the principal currency of the economic environment in which it operates.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment hedge.

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

Earnings (loss) per share

Basic earnings (loss) per share amounts are calculated by dividing the earnings or loss attributable to shareholders of the Company by the weighted average number of shares outstanding during the period. Diluted per share amounts are determined by adjusting the earnings or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares, which consist of share purchase warrants, stock options and convertible debentures. The dilutive effect of outstanding stock options and their equivalents is reflected in the calculation of diluted earnings by application of the treasury stock method. The dilutive effect of convertible debentures is reflected in the calculation of diluted earnings by application of the "if converted" method. When a company is in a loss position, all outstanding dilutive shares are excluded from the calculation of diluted earnings because their inclusion would be anti-dilutive; and the basic and fully diluted common shares outstanding are stated to be the same.

Financial instruments

Financial assets are recognized at fair value and are subsequently classified and measured at amortized cost, fair value through other comprehensive income ("FVOCI"), or fair value through profit or loss ("FVTPL"). The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. A financial asset is measured at fair value net of transaction costs that are directly attributable to its acquisition except for financial assets at FVTPL where transaction costs are expensed. All financial assets not classified and measured at amortized cost or FVOCI are measured at FVTPL.

The classification determines the method by which the financial assets are carried on the statement of financial position subsequent to initial recognition and how changes in value are recorded. The following accounting policies apply to the subsequent measurement of financial assets:

a) Financial assets at FVTPL - These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss. The Company's cash and cash equivalents, marketable securities and other investments are recorded at FVTPL.

b) Financial assets at amortized cost - These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss. The Company's interest receivable and loan receivable are recorded at amortized cost.

c) Financial assets at FVOCI - These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Gains or losses recognized on the sale of the equity investment are recognized in other comprehensive income and are never reclassified to profit or loss. The Company does not have any financial assets recorded at FVOCI.

Financial liabilities are designated as either fair value through profit or loss, or at amortized cost. All financial liabilities are classified and subsequently measured at amortized cost except for financial liabilities at FVTPL. The classification determines the method by which the financial liabilities are carried on the statement of financial position subsequent to inception and how changes in value are recorded. Other financial liabilities are carried on the statement of financial position at amortized cost. The Company's trade and other payables, and convertible debentures are recorded at amortized cost.

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Elysee Development Corp. Notes to the Condensed Consolidated Interim Financial Statements For the Three Months ended March 31, 2025 (Expressed in Canadian dollars)

Compound Instruments - Convertible Debentures

The components of compound instruments (convertible debentures) issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual agreements. At the date of issue, the fair value of the liability component is estimated using the market interest rate then in effect for a similar instrument without a conversion feature. The calculated liability component is deducted from the total fair value of the compound instrument, with the residual value assigned to the equity component. Subsequent to initial recognition, the liability component of the convertible debentures are measured at amortized cost using the effective interest method until its expiry at the time of conversion or maturity of the instrument. The equity components are not re-measured. The carrying amounts of the liability and equity components of the convertible debentures are reclassified to share capital on conversion to common shares.

Transaction costs that relate to the issuance of the convertible debentures are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component and are amortized over the lives of the convertible debentures using the effective interest method.

Impairment of financial assets

An 'expected credit loss' (ECL) model applies to financial assets measured at amortized cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. 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 twelve month expected credit losses. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.

Derecognition of financial assets and liabilities

Financial assets are derecognized when the rights to receive cash flows from the assets expire or, the financial assets are transferred and the Company has transferred substantially all the risks and rewards of ownership of the financial assets. On derecognition of a financial asset, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized directly in equity is recognized in profit or loss.

For financial liabilities, they are derecognized when the obligation specified in the relevant contract is discharged, cancelled or expires. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

4. CASH AND CASH EQUIVALENTS

The Company’s cash and cash equivalents are denominated in the following currencies:

	March 31, 2025	December 31, 2024
Denominated in Canadian dollars	$ 1,461,779	$ 1,291,387
Denominated in U.S. dollars	424,236	241,590
Total cash and cash equivalents	$ 1,886,015	$ 1,532,977

Cash and cash equivalents consist of:

	March 31, 2025	December 31, 2024
Cash	$ 1,786,015	$ 1,532,977
Money market funds	100,000	-
Total cash and cash equivalents	$ 1,886,015	$ 1,532,977

5. PREPAID EXPENSES

The Company’s prepaid expenses are as follows:

	March 31, 2025	December 31, 2024
Insurance	$ 895	$ 3,576
Travel	-	-
Rent	327	327
Total prepaid expenses	$ 1,222	$ 3,903

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Elysee Development Corp.

Notes to the Condensed consolidated interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

6. MARKETABLE SECURITIES AND OTHER INVESTMENTS

The Company’s marketable securities and other investments are as follows:

	Marketable Securities	Warrants	Convertible Debentures (1)	Total Marketable Securities	Convertible Debentures (2)	Private Company Investments	Total Other Investments	Total	Total Gain (Loss)
COST
December 31, 2023	$ 11,391,223	$ -	$ 1,541,765	$ 12,932,988	$ 679,679	$ 2,870,911	$ 3,550,590	$ 16,483,578
Additions	4,129,927	-	450,081	4,580,008	75,841	-	75,841	4,655,849
Conversions	-	-	67,665	67,665	(67,665)	-	(67,665)	-
Proceeds on redemption	-	-	-	-	(181,725)	-	(181,725)	(181,725)
Proceeds on sale	(3,259,453)	-	(155,241)	(3,414,694)	(25,100)	-	(25,100)	(3,439,794)
Transaction costs	(13,363)	-	-	(13,363)	-	-	-	(13,363)
Realized loss	(838,189)	-	(5,415)	(843,604)	(70,489)	-	(70,489)	(914,093)
December 31, 2024	11,410,145	-	1,898,855	13,309,000	410,541	2,870,911	3,281,452	16,590,452	(927,456)
Additions	1,019,890	-	297,971	1,317,861	-	-	-	1,317,861
Proceeds on sale	(1,765,630)	-	-	(1,765,630)	-	-	-	(1,765,630)
Transaction costs	(6,048)	-	-	(6,048)	-	-	-	(6,048)
Realized gain	479,550	-	-	479,550	-	-	-	479,550
March 31, 2025	$ 11,137,907	$ -	$2,196,826	$ 13,334,733	$ 410,541	$ 2,870,911	$ 3,281,452	$ 16,616,185	$ 473,502
FAIR VALUE
December 31, 2023	$ 7,354,660	$ 138,660	$ 488,859	$ 7,982,179	$ 337,562	$ 1,962,288	$ 2,299,850	$ 10,282,029
Additions	4,144,880	-	435,128	4,580,008	75,841	-	75,841	4,655,849
Conversions	-	-	67,565	67,565	(67,565)	-	(67,565)	-
Cost of disposals	(4,111,005)	-	(160,656)	(4,271,661)	(277,314)	-	(277,314)	(4,548,975)
Unrealized foreign exchange loss	-	-	-	-	(78,223)	-	(78,223)	(78,223)	-
Unrealized gain (loss)	1,722,533	185,662	(226,385)	1,681,810	443,710	(151,229)	292,481	1,974,291
December 31, 2024	9,111,068	324,322	604,511	10,039,901	434,011	1,811,059	2,245,070	12,284,971	1,974,291
Additions	1,019,890	-	297,971	1,317,861	-	-	-	1,317,861
Cost of disposals	(1,292,128)	-	-	(1,292,128)	-	-	-	(1,292,128)
Unrealized gain	1,461,510	95,242	13,430	1,570,182	13,079	-	13,079	1,583,261
March 31, 2025	$ 10,300,340	$ 419,564	$ 915,912	$ 11,635,816	$ 447,090	$ 1,811,059	$ 2,258,149	$ 13,893,965	$ 1,583,261
TOTAL EARNINGS 2025									$ 2,056,763

(1) Comprised of investments in convertible debentures that are traded in an active market.
(2) Comprised of investments in convertible debentures issued by both public and private companies that are not traded in an active market.
(3) A convertible debenture originally classified as a marketable security was identified as not trading in an active market. The convertible debenture was reclassified into other investments.

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Elysee Development Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the Three Months ended March 31, 2025
(Expressed in Canadian dollars)

The realized gain or loss from financial instruments at FVTPL represents the difference between the carrying amount of the financial instrument at the beginning of the reporting period, or the transaction price if it was purchased in the current reporting period, and the consideration received on disposal less transaction costs.

The unrealized gain or loss represents the difference between the carrying amount of a financial instrument at the beginning of the period, or the transaction price if it was purchased in the current reporting period, and its carrying amount at the end of the reporting period.

Marketable securities

The Company's marketable securities are comprised of common shares, warrants and convertible debentures that are traded in an active market. Valuation of common shares held as part of marketable securities has been determined in whole by reference to the quoted closing trade price of the shares on the CSE, TSX, TSX Venture Exchange and OTCQB at each period end date. Warrants received as attachments to various share purchase units do not trade in an active market. At the time of purchase, the per unit cost is allocated in full to each common share. The value of the warrants is subsequently determined at the measurement date using the Black-Scholes Option Pricing Model. The fair value of the warrants of $419,563 was valued with the Black-Scholes Option Pricing Model using the following assumptions: the risk-free rate of 2.44–2.63%; expected life of the warrants of 0.06–4.62; volatility of 64–208%; forfeiture rate and dividend yield of nil; and the exercise prices of the warrants of $0.08–$4.31. Valuation of convertible debentures that are traded in an active market are based on quoted closing trade prices at the statement of financial position dates. Derivatives embedded in convertible debentures are not bifurcated, and instead the convertible debenture is disclosed as a single financial instrument.

Other investments - current

The Company's other investments-current are comprised of other investments that have maturity terms of less than one year.

Other investments

The Company's other investments are comprised of equity investments in private companies and investments in convertible debentures issued by both public and private companies that are not traded in an active market. Valuation of equity investments in private companies are based on a market approach using valuation inputs from the latest financing rounds. The valuation of investments in convertible debentures issued by both public and private companies that are not traded in an active market are based on the present value of the future cash flows discounted by the weighted average cost of capital. Derivatives embedded in convertible debentures are not bifurcated, and instead the convertible debenture is disclosed as a single financial instrument.

US Vanadium

One of the Company's significant other investments is US Vanadium LLC ("US Vanadium"), a US Limited Liability Corporation ("US LLC") which owns and operates a facility in Hot Springs, Arkansas that produces high-purity vanadium oxides and downstream vanadium chemicals for customers in the catalyst, chemical, petrochemical, titanium and energy storage industries. As an US LLC, US Vanadium has a fixed number of capital units that always remains the same. When new investments are made, the units are re-allocated among the investors with changes to the effective amount paid per capital unit. The Company determined that the best estimate of the fair value is the effective value of the investment calculated through its ownership interest.

During the year ended December 31, 2023, the Company's ownership interest held in US Vanadium decreased from 4.75% to 1.24% as a result of US Vanadium completing investment financings that the Company did not participate in. As a result, the Company reduced the fair value of its investment from $3,174,685 to $1,836,272 to reflect the change to its ownership interest, and recognized an unrealized loss on other investments of $1,338,413.

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

During the year ended December 31, 2024, the Company's ownership interest held in US Vanadium decreased from 1.24% to 0.71% as a result of US Vanadium completing investment financings that the Company did not participate in. As a result, the Company reduced the fair value of its investment from $1,836,272 to $1,685,043 to reflect the change to its ownership interest, and recognized an unrealized loss on other investments of $151,229.

Baker Street

On September 24, 2018, the Company purchased a convertible promissory note (the "Note") for US$300,000 with an initial 36-month term paying an interest rate of 10% per annum from Baker Street Scientific Inc. ("Baker Street"), a Delaware corporation registered as a foreign profit corporation in the State of Georgia. On September 24, 2021, the Note and the accrued interest was extended to September 24, 2022. On September 24, 2022, Baker Street paid the Company the full interest accrued to that date (US$139,230) and entered into a second amendment effective October 24, 2022, to extend the maturity date to September 24, 2023.

On November 2, 2023, the Company sent a written notice of default to demand payment in full but was unsuccessful in collecting payment. During the year ended December 31, 2023, the Company recorded an unrealized loss on other investments of $471,982 (US$348,585) to reduce the fair value of the investment to $Nil due to the uncertainty of collectability. On February 23, 2024, the Company filed a verified complaint for breach of promissory note in the Superior Court of Cobb County of the State of Georgia against Baker Street seeking all principal and interest due and owing.

Between August 2024 and November 2024, the Company received total payment of US$232,000 from Baker Street relating to the partial recovery of US$150,000 of principal and US$48,585 of interest, along with new interest under the Note of US$21,415 and reimbursement for legal expenses of US$12,000. On November 21, 2024, the Company agreed to a settlement of the original Note in exchange for a new convertible promissory note ("New Note") with a principal balance of US$150,000 with a maturity date of September 30, 2025, paying an interest rate of 15% per annum in equal quarterly installment of US$5,625. No gain or loss was recognized on the settlement of the original Note. Under the terms of the New Note, Baker Street will have the option to extend the maturity date by 6 months to March 31, 2026, for an extension fee of US$3,000.

During the year ended December 31, 2024, the Company recognized an unrealized gain of $475,783 (US$348,585) relating to the recovery of principal and interest under the original Note due to payments received and the settlement resulting in the issuance of the New Note.

7. TRADE AND OTHER PAYABLES

The Company's trade and other payables are broken down as follows:

	March 31, 2025	December 31, 2024
Trade payables	$ 45,899	$ 8,192
Accrued liabilities	-	60,000
Total trade and other payables	$ 45,899	$ 68,192

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

8. CONVERTIBLE DEBENTURES

On June 14, 2024, the Company closed a non-brokered private placement of convertible debentures gross proceeds of $2,000,000. The convertible debentures will mature on June 14, 2028 (the “Maturity Date”) and bear interest at 8% per annum, payable quarterly with the first payment being for the period from June 14, 2024 to September 30, 2024. At the option of the holder, the principal amount of the convertible debentures are convertible into common shares of the Company at any time until the Maturity Date at a price equal to $0.38 per common share. The Company may elect to redeem the convertible debentures at 102% of the nominal value at any time after June 14, 2027 and prior to the Maturity Date.

The convertible debentures are compound financial instruments and were recorded using the residual method, where the convertible debentures have been bifurcated into a liability component and equity component comprised of the convertible feature embedded within the liability. The value of the liability component, at the time of issuance of the debentures, was determined to be $1,802,984 using a present value calculation assuming a discount rate of 10%, which is the estimated interest rate the Company would pay on a similar debt instrument without a conversion option. The residual value of $197,016 was allocated to the equity component. The Company also incurred issuance costs of $26,025, which were allocated in proportion to the allocation of the gross proceeds as $23,461 to be included as a discount and $2,564 to be recognized directly in equity. The resulting combined discount of $220,477 will be recognized over the term of the convertible debentures using the effective interest method.

During the three-month period ended March 31, 2025, the Company recorded accretion interest of $11,504 and made interest payments of $39,452. As at March 31, 2025, the carrying value of the convertible debentures was $1,815,786.

9. SHARE CAPITAL

Authorized share capital

The Company has authorized an unlimited number of voting common shares with no par value. Authorized share capital also consists of an unlimited number of preferred shares with no par value, to be issued in series, with the directors being authorized to determine the designation, rights, privileges, restrictions and conditions attached to all of the preferred shares. At March 31, 2025, the Company had 28,321,613 common shares outstanding (December 31, 2024 – 28,321,613) and no preferred shares outstanding (December 31, 2024 – Nil).

Share issuances and repurchases

During the three-month period ended March 31, 2025, the Company did not issue any common shares pursuant to the exercise of stock options (March 31, 2024 – none).

During the three-month period ended March 31, 2025, no shares (March 31, 2024 – 163,500) were repurchased at a total cost of $Nil (March 31, 2024 – $44,403) and were returned to the Company’s treasury for cancellation pursuant to the Normal Course Issuer Bid.

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

Normal Course Issuer Bid

On May 9, 2024, the Company received approval from the TSX Venture Exchange (the "Exchange") to renew its Normal Course Issuer Bid (the "Bid"). The original Bid started on May 3, 2013. Pursuant to the Bid, the Company may purchase for cancellation, from time to time, as it considers advisable, up to 1,418,238 of its issued and outstanding common shares. The price which the Company will pay for any shares purchased will be the prevailing market price of such common shares on the Exchange at the time of such purchase. The Bid will commence on May 13, 2024 and will terminate on May 12, 2025, or such earlier time as the Bid is completed or at the option of the Company. Research Capital Corporation of Vancouver, British Columbia will conduct the Bid on behalf of the Company. During the three-month period ended March 31, 2025, the Company did not purchase any shares (March 31, 2024 – 163,500) at a total cost of $Nil (March 31, 2024 – $44,403). The difference between the share repurchase price and the original share issuance of $Nil (March 31, 202 – $205,131) has been included in deficit.

Cash dividend

The Company did not pay dividends during the three-month period ended March 31, 2025 or the year ended December 31, 2024.

Share purchase warrants

There were no share purchase warrants outstanding for the periods ended March 31, 2025 and December 31, 2024.

Security based compensation plan ("SBC Plan")

The Company has implemented a fixed SBC Plan whereby 20% of the issued shares are issuable under the SBC Plan through the granting of share options or RSUs. Pursuant to the SBC Plan, the Company grants share options in accordance with the policies of the Exchange. Under the general guidelines of the Exchange, the Company may reserve up to 20% of its issued and outstanding shares for its employees, directors or consultants to purchase shares of the Company. The exercise price for options granted under the plan will not be less than the market price of the common shares less applicable discounts permitted by the Exchange and options will be exercisable for a term of up to five years, subject to earlier termination in the event of death or the cessation of services.

The following is a summary of the changes to the Company's outstanding stock options for the periods ended March 31, 2025 and December 31, 2024:

	March 31, 2025		December 31, 2024
	Number of options	Weighted average exercise price	Number of options	Weighted average exercise price
Outstanding, beginning of year	1,850,000	$ 0.59	1,850,000	$ 0.59
Exercised	-	-	-	-
Granted	-	-	-	-
Outstanding, end of period	1,850,000	$ 0.59	1,850,000	$ 0.59
Exercisable, end of period	1,850,000	$ 0.59	1,850,000	$ 0.59

On April 3, 2023, the Company granted 300,000 options to directors, officers and consultants, exercisable at $0.50 per share with 50% vesting immediately and 50% vesting on April 3, 2024. The fair value of the

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

options granted was $44,829 of which $39,384 was attributed to the year ended December 31, 2023 and $5,445 was attributed to the year ended December 31, 2024. The valuation was based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 2.83%; volatility of 52.67%; dividend rate 4.90%; forfeiture rate 0%; and expected life of 5.01 years.

The following table summarizes information regarding stock options outstanding and exercisable as at March 31, 2025:

Grant date	Expiry date	Number of options outstanding*	Number of options exercisable	Exercise price	Remaining contractual life (years)
September 18, 2020	September 18, 2025	500,000	500,000	$ 0.42	0.47
May 17, 2022	May 17, 2027	1,050,000	1,050,000	$ 0.70	2,13
April 3, 2023	April 3, 2028	300,000	300,000	$ 0.50	3.01
Total options		1,850,000	1,850,000

• The weighted average remaining life of options outstanding is 1.82.

On July 15, 2024, the Company granted 140,000 RSUs to directors and officers pursuant to the SBC Plan. The RSUs vest annually in three equal tranches over a period of three years with the first vesting on July 15, 2025. The fair value of the RSUs granted was $40,600 of which $6,118 was attributed to the three-month period ended March 31, 2025 and $11,487 was attributed to the year ended December 31, 2024. The valuation was based on the market price of the shares on the grant date.

10. EARNINGS PER SHARE

The calculation of basic and diluted earnings per share is based on the following data:

	March 31, 2025	March 31, 2024
Numerator:
Net earnings for the period - basic	$ 1,922,864	$ 278,436
Dilutive effect of convertible debentures - after-tax interest expense	195,266	-
Adjusted net earnings for the period - diluted	$ 2,118,130	$ 278,436
Denominator:
Weighted average number of common shares – basic	28,321,613	28,506,789
Dilutive effect of stock options outstanding	-	-
Dilutive effect of convertible debentures - weighted shares	2,876,043	-
Weighted average number of common shares – diluted	31,197,656	28,506,789
Basic earnings per share	$0.07	$0.01
Diluted earnings per share	$0.06	$0.01

The basic earnings (loss) per share is computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding during the period. The diluted earnings (loss) per share reflects the potential dilution of common share equivalents, such as outstanding stock options and convertible debentures, in the weighted average number of common shares outstanding during the period, if dilutive. The potential dilutive impact of the stock options outstanding has been excluded as it would be anti-dilutive.

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

11. CAPITAL RISK MANAGEMENT

The capital structure of the Company consists of equity attributable to common shareholders, comprising of issued capital, contributed surplus and deficit. The Company's objectives when managing capital are to: (i) preserve capital, (ii) obtain the best available net return, and (iii) maintain liquidity.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash and investments.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company's approach to capital management during the three-month period ended March 31, 2025. The Company is not subject to externally imposed capital requirements.

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

12. FINANCIAL INSTRUMENTS

Categories of financial instruments

	March 31, 2025	December 31, 2024
FINANCIAL ASSETS
FVTPL
Cash and cash equivalents	$ 1,886,015	$ 1,532,977
Marketable securities	11,635,816	10,039,901
Other investments	2,258,149	2,245,070
Amortized cost
Interest receivable	8,842	-
Total financial assets	$ 15,788,822	$ 13,817,948
FINANCIAL LIABILITIES
Amortized cost
Trade and other payables	$ 45,899	$ 68,192
Due to related parties	50,000	-
Convertible debentures	1,815,786	1,804,282
Total financial liabilities	$ 1,911,685	$ 1,872,474

Fair value

The fair value of financial assets and financial liabilities at amortized cost is determined in accordance with generally accepted pricing models based on discounted cash flow analysis or using prices from observable current market transactions. The Company considers that the carrying amount of all its financial assets and financial liabilities recognized at amortized cost in the condensed consolidated interim financial statements approximates their fair value due to the demand nature or short-term maturity of these instruments.

The following table provides an analysis of the Company's financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to 3 based on the degree to which the inputs used to determine the fair value are observable.

• Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets or liabilities.
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1, that are observable either directly or indirectly.
• Level 3 fair value measurements are those derived from valuation techniques that include inputs that are not based on observable market data.

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

	Level 1	Level 2	Level 3	Total
As at March 31, 2025
Cash and cash equivalents	$ 1,886,015	$ -	$ -	$ 1,886,015
Marketable securities - shares	10,300,340	-	-	10,300,340
Marketable securities - convertible debt	915,912	-	-	915,912
Marketable securities - warrants	-	419,564	-	419,564
Other investments - equity	-	-	1,811,059	1,811,059
Other investments - convertible debt	-	-	447,090	447,090
Total financial assets at fair value	$ 13,102,267	$ 419,564	$ 2,258,149	$ 15,779,980
	Level 1	Level 2	Level 3	Total
---	---	---	---	---
As at December 31, 2024
Cash and cash equivalents	$ 1,532,977	$ -	$ -	$ 1,532,977
Marketable securities - shares	9,111,068	-	-	9,111,068
Marketable securities - convertible debt	604,511	-	-	604,511
Marketable securities - warrants	-	324,322	-	324,322
Other investments - equity	-	-	1,811,059	1,811,059
Other investments - convertible debt	-	-	434,011	434,011
Total financial assets at fair value	$ 11,248,556	$ 324,322	$ 2,245,070	$ 13,817,948

Management of financial risks

The financial risks arising from the Company's operations include credit risk, liquidity risk, interest rate risk, currency risk and market risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company's ability to continue as a going concern. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

Credit risk

Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises primarily from the Company's cash and cash equivalents and receivables. The Company manages its credit risk relating to cash by dealing only with highly-rated Canadian financial institutions. As at March 31, 2025, there is interest receivable of $8,842 (December 31, 2024 - $Nil). As a result, credit risk is considered insignificant.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk by continuously monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities. The Company has cash and cash equivalents of $1,886,015 (December 31, 2024 - $1,532,977) to settle current liabilities of $95,899 (December 31, 2024-$68,192); therefore, liquidity risk is considered insignificant.

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

Interest rate risk

The Company’s interest rate risk is primarily related to the Company’s cash for which amounts were invested at interest rates in effect at the time of investment. Changes in market interest rates affect the fair market value of the cash. However, as these investments come to maturity within a short period of time, the impact would likely not be significant. The Company also has investments in convertible debentures which have a fixed interest rate and are not subject to interest rate fluctuations.

Currency risk

The majority of the Company’s cash flows and financial assets and liabilities are denominated in Canadian dollars, which is the Company’s functional and reporting currency. Foreign currency risk is limited to the portion of the Company’s business transactions denominated in currencies other than the Canadian dollar.

The Company’s objective in managing its foreign currency risk is to minimize its net exposures to foreign currency cash flows by holding most of its cash and cash equivalents in Canadian dollars (Note 4). The Company monitors and forecasts the values of net foreign currency cash flow and financial position exposures and from time to time could authorize the use of derivative financial instruments such as forward foreign exchange contracts to economically hedge a portion of foreign currency fluctuations. The Company has not, to the date of these condensed consolidated interim financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Market risk

Market risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its marketable securities and unfavourable market conditions could result in dispositions of investments at less than favourable prices.

The Company manages market risk by having a portfolio that is not singularly exposed to any one issuer or class of issuers. The Company’s investment activities are currently concentrated primarily in junior exploration and mining companies active in the gold and silver sector as well as several technology companies.

13. RELATED PARTY TRANSACTIONS

Key management personnel and director compensation

The remuneration of directors and other members of key management were as follows:

	March 31, 2025	March 31, 2024
Management fees and accrued bonus	$ 60,000	$ 30,000
Accounting fees and accrued bonus	38,191	17,325
Director fees	4,804	4,725
Share-based payments	6,118	4,700
Total	$ 109,113	$ 56,750

During the three-month period ended March 31, 2025, the Company recognized share-based payments of $6,118 relating to 140,000 RSUs granted to directors and officers during the year ended December 31, 2024 (Note 9).

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Elysee Development Corp.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months ended March 31, 2025

(Expressed in Canadian dollars)

During the three-month period ended March 31, 2025, the Company paid $9,000 (March 31, 2024 - $9,000) for office rent and expenses, and administrative and general expenses including shareholder relations costs to a company controlled by the Chief Executive Officer.

During the year ended December 31, 2024, $335,000 of the convertible debentures issued on June 14, 2024 (Note 8) was subscribed by directors and officers. During the three-month period ended March 31, 2025, the Company made interest payments totaling $6,608 on the convertible debentures to related parties.

The amounts owing to directors and other members of key management were as follows:

	March 31, 2025	December 31, 2024
Management and directors	$ 50,000	$ -

14. SUPPLEMENTAL CASH FLOW INFORMATION

During the three-month period ended March 31, 2025, there was no amount credited to deficit on the repurchase of the Company’s shares (March 31, 2024 - $205,131) (Note 9).

Cash payments for interest and taxes

The Company made cash payments for interest of $39,452 (March 31, 2024 - $Nil) and income taxes of $Nil (March 31, 2024 - $Nil) during the three-month period ended March 31, 2025.

15. SUBSEQUENT EVENTS

Subsequent to March 31, 2025, the Company repurchased 30,000 common shares of the Company pursuant to the Normal Course Issuer Bid which will be returned to treasury.

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