Frequency Exchange Corp. — Interim / Quarterly Report 2026

May 23, 2026

FREQUENCY EXCHANGE CORP.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2026 and 2025

(EXPRESSED IN CANADIAN DOLLARS)

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MANAGEMENT'S RESPONSIBILITY FOR INTERIM FINANCIAL REPORT

The accompanying unaudited condensed consolidated interim financial report of Frequency Exchange Corp. (the "Company") has been prepared by and is the responsibility of the Company's management. The Company's independent auditor has not performed a review of this financial report.

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FREQUENCY EXCHANGE CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT MARCH 31
(Unaudited - Prepared by Management)
(EXPRESSED IN CANADIAN DOLLARS)

	Note	March 31, 2026	December 31, 2025
ASSETS
Current assets
Cash	4	$ 733,055	$ 1,134,337
Trade and other receivables	5	23,888	20,501
Prepaid expenses and deposits		16,867	60,845
Inventory	6	188,608	124,068
		962,418	1,339,751
Non-current assets
Equipment	7	990	1,485
Intangible assets	8	57,337	65,551
Total assets		$ 1,020,745	$ 1,406,787
LIABILITIES
Current liabilities
Trade and other payables	9	$ 237,963	$ 258,092
Due to related parties	13	28,011	13,998
Deferred revenue	10	-	6,435
Notes payable	11	395,930	429,762
CEBA loan payable	12	56,351	55,236
Total liabilities		718,255	763,523
Equity (deficit)
Share capital	14	9,847,001	9,847,001
Share-based payments reserve	15	2,137,801	2,081,615
Deficit		(11,682,312)	(11,285,352)
Total equity (deficit)		302,490	643,264
Total liabilities and equity		$ 1,020,745	$ 1,406,787

Nature of operations and going concern (Note 1)
Events after the reporting period (Note 20)

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

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THEOREM 31

(Unaudited – Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

FREQUENCY EXCHANGE CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
THREE MONTHS ENDED MARCH 31

	Note	2026	2025
Sales	16	$ 134,097	$ 275,483
Cost of sales		(55,166)	(88,035)
Gross profit		78,931	187,448
Operating expenses
Accounting and audit		3,088	34,661
Advertising and marketing		118,469	48,118
Consulting		10,517	8,400
Depreciation and amortization	7&8	8,709	8,709
Investor relations		660	600
Legal fees (recovery)		38	(1,242)
Management fees	13	133,500	111,000
Office and general		40,142	76,622
Regulatory and transfer agent		14,474	3,122
Research and development		25,000	-
Share-based payments	15	56,186	10,797
Wages and benefits		47,304	66,398
Travel		9,775	163
		(467,862)	(367,348)
Loss from operations		(388,931)	(179,900)
Interest and other income		10	19
Loan interest	11&12	(8,039)	(8,650)
Net loss and comprehensive loss		$ (396,960)	$ (188,531)
Basic and diluted loss per common share		$ (0.01)	$ (0.00)
Weighted average number of common shares outstanding		58,079,456	47,419,375

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

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FREQUENCY EXCHANGE CORP.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

(Unaudited – Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

	Note	Number of Shares	Share capital	Share-based payments reserve	Share subscription proceeds	Deficit	Total equity
Balance, December 31, 2024		47,336,555	$ 7,400,139	$ 1,646,608	$ 103,526	$ (9,594,551)	$ (444,278)
Private placement	14	414,102	103,526	-	(103,526)	-	-
Share issuance costs	14	-	(15,762)	14,494	-	-	(1,268)
Share-based payments	15	-	-	10,797	-	-	10,797
Loss for the period		-	-	-	-	(188,531)	(188,531)
Balance, March 31, 2025		47,750,657	$ 7,487,903	$ 1,671,899	$ -	$ (9,783,082)	$ (623,280)
	Note	Number of Shares	Share capital	Share-based payments reserve	Share subscription proceeds	Deficit	Total equity
---	---	---	---	---	---	---	---
Balance, December 31, 2025		58,079,456	$ 9,847,001	$ 2,081,615	$ -	$ (11,285,352)	$ 643,264
Share-based payments	15	-	-	56,186	-	-	56,186
Loss for the period		-	-	-	-	(396,960)	(396,960)
Balance, March 31, 2026		58,079,456	$ 9,847,001	$ 2,137,801	$ -	$ (11,682,312)	$ (302,490)

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

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FREQUENCY EXCHANGE CORP.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

	2026	2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$ (396,960)	$ (188,531)
Items not affecting cash:
Depreciation and amortization	8,709	8,709
Loan interest	8,039	8,650
Gain on debt modification	(741)	(740)
Share-based payments	56,186	10,797
Changes in non-cash working capital items:
Trade and other receivables	(3,387)	9,377
Prepaid expenses and deposits	43,978	39,533
Inventory	(64,540)	(22,674)
Trade and other payables	(20,129)	(51,670)
Deferred revenue	(6,435)	-
Amounts due (from) to related parties	14,013	(13,924)
Net cash used in operating activities	(361,267)	(200,473)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital	-	103,526
Share issuance costs	-	(1,268)
Repayment of debenture loan	(40,015)	-
Share subscriptions received	-	(103,526)
Net cash used in financing activities	(40,015)	(1,268)
Change in cash during the period	(401,282)	(201,741)
Cash, beginning of the period	1,134,337	335,630
Cash, end of the period	$ 733,055	$ 133,889

Supplemental cash flow information

There are no significant non-cash transactions during the period ended March 31, 2026 and 2025.

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

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

1. NATURE OF OPERATIONS AND GOING CONCERN

Frequency Exchange Corp. (the "Company") was incorporated on August 15, 2019 under the Business Corporations Act (British Columbia). The Company's head office and principal address is 1498 West 5th Avenue, Vancouver, BC, V6H 4G3. The registered and records office is Suite 2501, 550 Burrard Street, Vancouver BC V6C 2B5. The Company is focused on the development and global commercialization of a wearable Frequency Delivery System providing specialized programs designed for health and wellness as well as performance enhancement. The Company's common shares are listed on the TSX Venture Exchange (TSX-V) under the trading symbol "FREQ". Effective April 16, 2026, the Company's common shares have been listed on the Frankfurt Stock Exchange (FSE) under the symbol "YC6".

Going concern

These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

The Company has incurred losses since inception in the amount of $11,682,312 and has not yet achieved profitable operations. The Company's ability to continue as a going concern is dependent on its ability to obtain adequate financing on reasonable terms from lenders, shareholders and other investors and/or to commence profitable operations in the future. While the Company has been successful in securing financing to date, there can be no assurances that it will be able to do so in the future. The aforementioned factors indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern.

These condensed interim consolidated financial statements do not include adjustments that would be required if the going concern assumption is not an appropriate basis for preparation of the consolidated financial statements. These adjustments could be material.

2. BASIS OF PREPARATION

These condensed interim consolidated financial statements were authorized for issue on May 22, 2026 by the directors of the Company.

Statement of compliance

These unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"), applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34 Interim Financial Reporting.

The condensed interim consolidated financial statements do not include all of the disclosures required for a complete set of annual financial statements and should be read in conjunction with the audited annual financial statements for the year ended December 31, 2025, which have been prepared in accordance with IFRS as issued by the IASB.

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

2. BASIS OF PREPARATION (cont'd...)

Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments that are measured at fair values. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, FREmedica. The financial statements of the subsidiary are included in the consolidated financial statements from the date that control commences until the date that control ceases. All intercompany transactions, balances, income and expenses are eliminated in full on consolidation.

Functional and presentation currency

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

Significant estimates and assumptions

In preparing these consolidated financial statements, management has made judgments and estimates and used assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.

Estimates

Critical accounting estimates are those that require management to make assumptions about matters that are highly uncertain at the time the estimate or assumption is made. Critical accounting estimates are also those that could potentially have a material impact on the Company's financial results where a different estimate or assumption is used. The significant areas of estimation uncertainty are:

Share-based payments

The determination of the fair value of stock options and agent's warrants using option pricing models, require the input of highly subjective assumptions, including forfeiture rate, expected time to exercise in years, expected dividend yield, and expected price volatility. Changes in the subjective input assumptions could materially affect the fair value estimate.

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

2. BASIS OF PREPARATION (cont'd...)

Significant estimates and assumptions (cont'd...)

Inventory

Inventory is valued at the lower of cost and net realizable value. Net realizable value is determined with reference to estimated selling price less costs to sell. The Company estimates selling price based on assumptions about future demand and current and anticipated retail market conditions. The future realization of these inventories may be affected by future technology or other market driven changes that may reduce future selling prices.

Useful life of equipment and intangible assets

The intangible assets and equipment are recorded at cost less accumulated depreciation and impairment charges. Such cost consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use.

Taxation

The calculations for current and deferred taxes require management’s interpretation of tax regulations and legislation in the various tax jurisdictions in which the Company operates, which are subject to change. The measurement of deferred tax assets and liabilities requires estimates of the timing of the reversal of temporary differences identified and management’s assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income before they expire, which involves estimating future taxable income.

Significant judgments

Judgment is used in situations when there is a choice and/or assessment required by management. The following are critical judgments apart from those involving estimations, that management has made in the process of applying the Company’s accounting policies and that have a significant effect on the amounts recognized in the consolidated financial statements.

Assessment of impairments on long-lived assets

The carrying value and the recoverability of intangible assets and equipment, which are included in the consolidated statements of financial position are evaluated at each reporting date to determine whether there are any indications of impairment.

The Company considers both internal and external sources of information when making the assessment of whether there are indications of impairment for the Company’s intangible assets and equipment.

External sources of information considered are changes in the Company’s economic, legal and regulatory environment which it does not control but affects the recoverability of its intangible assets and equipment.

Internal sources of information the Company considers include the manner in which intangible assets and equipment are being used or are expected to be used and indications of economic performance of the assets.

Classification of financial instruments

The classification of financial instruments under IFRS 9, requires management’s judgment to assess both business model for managing assets and the contractual cash flow characteristics.

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

2. BASIS OF PREPARATION (cont'd...)

Significant estimates and assumptions (cont'd...)

Revenue recognition

Under IFRS 15, revenue recognition requires management’s judgment through the five-steps model, particularly when determining when control transfers.

Determination of the functional currency of the entity and its subsidiaries.

Determination of the functional currency of the Company and its subsidiary requires management’s judgment to identify the primary economic environment in which entities operate.

Convertible notes

Management estimates the fair value of the convertible notes which requires determining the most appropriate valuation model and the most appropriate inputs to the valuation model.

Going concern

The going concern assessment requires management’s judgment on the ability of the Company to achieve positive cash flow from operations and/or obtain necessary equity or other financing.

The accounting policies set out below have been consistently applied to the period presented in these consolidated financial statements, unless otherwise indicated.

3. MATERIAL ACCOUNTING POLICY INFORMATION

The accounting policies set out below have been consistently applied to the period presented in these consolidated financial statements, unless otherwise indicated.

New and amended standards not yet effective

In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements ("IFRS 18") which replaces IAS 1 Presentation of Financial Statements. This standard aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation and disaggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. The Company is currently assessing the impact the new standard will have on its consolidated financial statements.

There are no other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements.

4. CASH

During the period ended March 31, 2026, the Company held a cash balance of $15,009 (December 31, 2025 - $17,562) with non-banking financial institutions.

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

5. TRADE AND OTHER RECEIVABLES

	March 31, 2026	December 31, 2025
Trade receivables, net of allowance	$ 10,533	$ 3,619
Goods and services taxes recoverable	13,355	16,882
	$ 23,888	$ 20,501

The Company anticipates full recovery of its receivables and therefore no allowance has been recorded against these amounts as at March 31, 2026 (December 31, 2025 - $nil).

6. INVENTORY

As at March 31, 2026, the Company’s inventory consisted of finished goods with a value of $188,608 (December 31, 2025 - $124,068). During the period ended March 31, 2026, the total amount of inventory recognized as a cost of sales was $4,889 (2025 - $662).

7. EQUIPMENT

	Computer
Cost
Balance at December 31, 2024, 2025 and March 31, 2026	$ 15,350
Accumulated depreciation
Balance at December 31, 2024	$ 11,885
Depreciation	1,980
Balance at December 31, 2025	13,865
Depreciation	495
Balance at March 31, 2026	$ 14,360
Net amount
Balance at December 31, 2025	$ 1,485
Balance at March 31, 2026	$ 990

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

8. INTANGIBLE ASSETS

	License	Trademark	Website	Certification	Total
Cost
Balance at December 31, 2024, 2025 and March 31, 2026	$ 150,000	$ 11,134	$ 15,041	$ 3,097	$ 179,272
Accumulated depreciation
Balance at December 31, 2024	$ 75,000	$ 2,399	$ 3,206	$ 258	$ 80,863
Amortization	30,000	557	752	1,549	32,858
Balance at December 31, 2025	105,000	2,956	3,958	1,807	113,721
Amortization	7,500	139	188	387	8,214
Balance at March 31, 2026	$ 112,500	$ 3,095	$ 4,146	$ 2,194	$ 121,935
Net amount
Balance at December 31, 2025	$ 45,000	$ 8,178	$ 11,083	$ 1,290	$ 65,551
Balance at March 31, 2026	$ 37,500	$ 8,039	$ 10,895	$ 903	$ 57,337

9. TRADE AND OTHER PAYABLES

	March 31, 2026	December 31, 2025
Trade payables	$ 167,176	$ 187,617
Accrued liabilities	63,750	63,750
Other payables	7,037	6,725
	$ 237,963	$ 258,092

10. DEFERRED REVENUE

	March 31, 2026	December 31, 2025
Balance, beginning of the period	$ 6,435	$ 13,9234
Deferred revenue recognized	(6,435)	(13,924)
Revenue deferred	-	6,435
Balance, end of the period	$ -	$ 6,435

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

11. NOTES PAYABLE

a) On November 9, 2021, the Company issued a convertible note of $200,000 to a company controlled by a director of the Company. The convertible note was secured by the inventory of the Company, had a maturity date of February 2, 2023, and bore interest at a rate of 15% per annum, payable on maturity. The debentures were convertible at any time following the maturity date at the holder’s option into common shares of the Company at $0.195 per share.

On February 2, 2023, the Company rolled over the convertible note of $200,000 together with accrued interest of $57,341 to two promissory notes totaling $257,341. Both promissory notes bore interest at 8% per annum, payable on maturity, and are secured by 200 units of the product inventory of the Company. The promissory notes had a maturity of August 2, 2023, which were subsequently changed to on demand. On October 8, 2025, both promissory notes were amended to extend the maturity date to December 31, 2026 and to set a payment plan of $50,000 on signing of the amendment agreement (received) and quarterly installment payments commencing March 31, 2026 and thereafter with the remaining principal and interest paid in full on December 31, 2026. If the Company completes an equity financing greater than $2 million in a single funding round, the Company shall repay the balance outstanding in full within 10 business days upon receipt of the financing proceeds. As at March 31, 2026, the Company repaid partial notes of $120,000 and the Company accrued interest of $61,210 on the notes (December 31, 2025 - $58,107). As at March 31, 2026, the principal and accrued interests on its loan totaled $198,551 (December 31, 2025 - $215,448).

b) On November 9, 2021, the Company issued a convertible note of $200,000 to a third party. The convertible note was secured by the inventory of the Company, had a maturity date of February 2, 2023, and bore interest at a rate of 15% per annum, payable on maturity. The debentures were convertible at any time following the maturity date at the holder’s option into common shares of the Company at $0.195 per share.

On February 2, 2023, the Company rolled over the convertible note of $200,000 together with accrued interest of $57,341 into two promissory notes totaling $257,341. Both promissory notes bore interest at 8% per annum, payable on maturity, and are secured by 200 units of the product inventory of the Company. The promissory notes had a maturity of August 2, 2023, which were subsequently changed to on demand. On October 8, 2025, both promissory notes were amended to extend the maturity date to December 31, 2026 and to set a payment plan that included a partial principal payment upon signing of the amendment agreement and quarterly installment payments commencing March 31, 2026 with the remaining principal and interest paid in full on December 31, 2026. If the Company completes an equity financing greater than $2 million in a single funding round, the Company shall repay the balance outstanding in full within 10 business days upon receipt of the financing proceeds. As at March 31, 2026, the Company repaid partial notes of $121,218 and the Company accrued interest of $61,256 on the notes (December 31, 2025 - $58,176). As at March 31, 2026, the principal and accrued interests on its loan totaled $197,379 (December 31, 2025 - $214,314).

12. CEBA LOAN PAYABLE

During the year ended December 31, 2021, the Company opened a Canada Emergency Business Account (“CEBA”) and received loans totaling $60,000 funded by the Government of Canada. The loan is interest-free until December 31, 2023. The Company did not repay the loan on December 31, 2023 and as a result, the loan is converted to a 3 year term loan at an interest rate of 5% per annum. The Company initially measured the loan at a fair value of $48,226, using a discount rate of 12%, resulting in a loan benefit of $11,774 recognized in net loss as other income in 2023.

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

1. CEBA LOAN PAYABLE (cont'd)

	March 31, 2026	December 31, 2025
Balance, beginning of the period	$ 55,236	$ 51,343
Interest expense	1,115	3,893
Balance, ending of the period	$ 56,351	$ 55,236

1. RELATED PARTY TRANSACTIONS

Related parties include key management personnel, the Board of Directors, close family members and entities that are controlled by these individuals as well as certain persons performing similar functions.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, and consist of directors and officers of the Company. The compensation paid or payable to key management personnel during the three months ended March 31 is as follows:

	March 31, 2026	March 31, 2025
Management fees	$ 133,500	$ 111,000
Share-based payments	15,526	722
Total	$ 149,026	$ 111,722

The Company has entered into two management consulting agreements with the CEO and the President of the Company, each with a monthly fee of $10,000 and expense allowance of $1,000. As of April 1, 2025, the Company increased the monthly fee to $12,500 following the completion of financing activities, per the management agreement. During the period ended March 31, 2026, the Company paid or accrued $81,000 (2025 - $66,000) for management fees to both CEO and the President of the Company.

The Company agreed on a compensation arrangement with the former CFO of the Company, for a monthly fee of $2,500 for CFO services. This arrangement was terminated on November 30, 2025 upon resignation of the former CFO. During the period ended March 31, 2026, the Company paid or accrued $nil (2025 - $7,500) for management fees to the former CFO of the Company.

The Company entered into a management agreement with the CFO of the Company, effective December 1, 2025, for a monthly fee of $5,000. During the period ended March 31, 2026, the Company paid or accrued $15,000 (2025- $nil) for management fees to the CFO of the Company. In addition, the Company paid or accrued $15,000 (2025-$15,000) for management fees for Fremedica's operation during the current period of fiscal 2026. As at March 31, 2026, $nil (December 31, 2025 - $266) was owed to the CFO pursuant to this agreement for related business expense reimbursements. This amount was included in due to related parties.

The Company has entered into an agreement with Varshney Capital Corp. ("VCC"), a company with a director in common, for administrative services for a monthly fee of $7,500 plus taxes. During the period ended March 31, 2026, the Company paid or accrued $22,500 (2025- $22,500) for administrative fees to VCC.

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

13. RELATED PARTY TRANSACTIONS (cont'd...)

As at March 31, 2026, $28,011 (December 31, 2025- $13,998) in royalties were due to related parties which are unsecured, non-interest bearing and have contractual maturities of 30 days under the following agreements:

a) FREmedica has an agreement with Waveforce, a company with common directors of the Company, whereby FREmedica licenses the technology from Waveforce, which entitles a 30% royalty. The royalty was reduced to 10% effective February 2, 2022 upon completion of the RTO Transaction. During the period ended March 31, 2026, the Company incurred royalty expense of $13,346 (2025 - $11,341). In addition, the Company paid and accrued $25,000 (2025- $nil) for research and development fees to Waveforce. During the current period for Fremedica’s product development. As at March 31, 2026, $14,013 (December 31, 2025 - $nil) was owed pursuant to this arrangement.

b) On July 6, 2022, FREmedica entered into an agreement with Frequency Warehouse Inc. (“Warehouse”), a fully-owned subsidiary of Waveforce, whereby FREmedica acquired an exclusive, royalty-bearing, non-transferable license from Warehouse to build a membership subscription program (including finished products, modules, and components) which delivers frequency packages through a wearable frequency emitter. In consideration for the license granted, FREmedica paid Warehouse a one-time license fee of $150,000 and agreed to pay a royalty equal to 10% of annual gross revenue pertaining to the sale of the membership and any fees collected for additional frequency services being offered through the membership. Warehouse is controlled by Waveforce, which has directors and officers in common with the Company. The transaction, therefore, is considered a non-arm’s length transaction. On June 30, 2025, FREmedica entered into an amending agreement with Warehouse and Waveforce whereby the royalties payable by FREmedica to Warehouse under the July 6, 2022 agreement between FREmedica and Warehouse would no longer be payable to Warehouse but to Waveforce. All other terms of the agreements remain the same. During the period ended March 31, 2026, the Company incurred royalty expense of $nil (2025 - $11,124). As at March 31, 2026, $13,998 (December 31, 2025 - $13,998) was owed pursuant to this arrangement.

14. SHARE CAPITAL

Authorized share capital

The Company is authorized to issue an unlimited number of common shares and preferred shares with no par value.

Issued share capital

At March 31, 2026, the Company had 58,079,456 common shares and nil preferred shares outstanding (December 31, 2025 – 58,079,456 common shares and nil preferred shares).

Share issuances

There were no transactions affecting share capital during the period ended March 31, 2026.

During the year ended December 31, 2025, the Company:

a) completed a private placement of 414,102 units at a price of $0.25 per unit for gross proceeds of $103,526. Each unit consists of one common share and one common share purchase warrant. Each warrant allows the holder to acquire one additional common share for a period of 24 months at an exercise price equal to $0.40 per share. $14,494 of proceeds was allocated to the warrants based on the residual method. The Company incurred regulatory fees of $1,269 in connection with the private placement.

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

14. SHARE CAPITAL (cont'd...)

b) completed a private placement of 7,352,133 units at a price of $0.25 per unit for gross proceeds of $1,838,033. Each unit consists of one common share and one common share purchase warrant. Each warrant allows the holder to acquire one additional common share for a period of 24 months at an exercise price equal to $0.40 per share. The Company paid a cash commission of $18,200, issued 72,800 agent's warrants, and incurred other expenses of $14,416 in connection with the private placement. The agent's warrants were valued at $19,873 using the Black-Scholes option pricing model (assuming a risk-free interest rate of 3.41%, an expected life of 2 years, annualized volatility of 210.80% and a dividend rate of 0%).

c) issued 560,000 common shares at $0.10 per share from the exercise of options for gross proceeds of $90,221. Accordingly, $34,221 was transferred from share-based payments reserve to share capital.

d) issued 2,416,666 common shares at $0.15 per share from the exercise of warrants for gross proceeds of $483,333. Accordingly, $120,833 was transferred from share-based payments reserve to share capital.

Basic and diluted loss per share

The calculation of basic and diluted loss per share for the period ended March 31, 2026 was based on the loss attributable to shareholders of $396,960 (2025 - $188,531) and a weighted average number of shares outstanding of 58,079,456 (2025 - 47,419,375).

At March 31, 2026, 4,435,000 stock options (2025 - 4,663,347) and 12,986,213 warrants (2025 - 10,299,451) were excluded from the diluted weighted average number of common shares calculation as their effect would have been anti-dilutive.

15. SHARE-BASED PAYMENTS

Stock options

The Company has adopted a rolling stock option plan under which it is authorized to grant options to executive officers, directors, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common shares of the Company. The exercise price of each option shall not be less than the market price of the Company's stock at the date of grant. The options can be granted for a maximum term of 5 years and vest as determined by the board of directors.

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

15. SHARE-BASED PAYMENTS (cont'd...)

Stock options (cont'd...)

Stock option transactions are summarized as follows:

	Number of options	Weighted Average Exercise Price
Balance, December 31, 2024	4,688,347	$ 0.15
Stock options granted	2,065,000	0.33
Exercised	(560,000)	0.10
Forfeited	(325,000)	0.20
Expired	(1,528,347)	0.10
Balance, December 31, 2025	4,340,000	0.26
Stock options granted	120,000	0.33
Forfeited	(25,000)	0.20
Balance, March 31, 2026	4,435,000	$ 0.26
Exercisable at March 31, 2026	4,196,667	$ 0.26
March 31,	2026	2025
Weighted average fair value of options granted during the period	$ 0.26	$ 0.15

The options outstanding and exercisable at March 31, 2026 have exercise prices ranging from $0.20 to$ 0.33 (2025 - $0.10 to $0.20) and a weighted average remaining contractual life of 2.07 years (2025 - 2.17 years).

The fair value calculated for stock options granted during the period ended March 31, 2026 was $28,173 (2025 -$nil) using the Black-Scholes Option Pricing Model. During the period ended March 31, 2026, the Company recognized share-based payment expense of$ 56,186 (2025 - $10,797) based on the vesting provisions of stock options granted.

The following weighted average assumptions were used for the Black-Scholes Option Pricing Model valuation of stock options granted:

	2026	2025
Risk-free interest rate	3.50%	3.34%
Expected life of options	3 years	3 years
Annualized volatility	220.78%	137.36%
Share prices	$ 0.33	$ 0.19
Forfeiture rate	Nil	Nil
Dividend rate	Nil	Nil

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

15. SHARE-BASED PAYMENTS (cont'd...)

Warrants

Warrants are issued as private placement incentives and measured using the residual method. Agents’ warrants and bonus warrants are measured at fair value on the date of the grant as determined using the Black-Scholes Option Pricing Model.

	Number of Warrants	Weighted Average Exercise Price
Balance, December 31, 2024	9,885,349	$ 0.20
Warrants granted	7,766,235	0.40
Agent’s warrants granted	72,800	0.40
Warrants exercised	(2,416,666)	0.15
Warrants expired	(2,321,505)	0.15
Balance, December 31, 2025 and March 31, 2026	12,986,213	$ 0.34

The warrants outstanding at March 31, 2026 have exercise prices ranging from $0.25 to $0.40 (2025- $0.15 to $0.40) and a weighted average remaining contractual life of 0.99 (2025- 0.94) years.

16. SEGMENTED INFORMATION

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board of directors which have been identified as the chief operating decision maker assesses the financial performance and position of the Company and makes strategic decisions. The Company has one operating and reportable segment, the sale of wearable devices. All of the Company’s non-current assets are based in Canada. The Company’s revenue and operations by geographical regions are outlined below.

	Canada	United States	International	Total
	$	$	$	$
Period ended March 31, 2025
Revenue	17,052	225,723	32,708	275,483
Period ended March 31, 2026
Revenue	12,615	104,955	16,527	134,097

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FREQUENCY EXCHANGE CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited- Prepared by Management)
(EXPRESSED IN CANADIAN DOLLARS)

17. CAPITAL MANAGEMENT

The Company’s capital structure consists of shareholders’ equity and convertible notes. The Company’s objective when managing capital is to maintain adequate levels of funding to support the development of its businesses and maintain the necessary corporate and administrative functions to facilitate these activities. This is done primarily through advances from related parties. Future financings are dependent on the willingness of the related parties to advance funds to the Company and market conditions and there can be no assurance the Company will be able to raise funds in the future. The Company is not subject to externally imposed capital requirements. The Company may raise additional debt or equity financing in the near future to meet its obligations. There was no change in the Company’s approach to capital management from the prior year.

18. FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash, trade receivables, trade and other payables, amounts due to related party, notes payable, and CEBA loan payable. The carrying amount of cash, trade receivables, trade and other payables, amounts due to related parties, notes payable, and CEBA loans payable, carried at amortized cost is a reasonable approximation of fair value due to the relatively short period to maturity of these financial instruments and/or the rate of interest being charged.

Financial risk management

The Company’s financial risks arising from its financial instruments are credit risk, liquidity risk, foreign currency exchange risk, and interest rate risk. The Company’s exposures to these risks and the policies on how to mitigate these risks are set out below. Management monitors and manages these exposures to ensure appropriate measures are implemented on a timely basis and in an effective manner.

Credit risk

Credit risk arises when one party to a financial instrument will cause a financial loss for the other party by failing to discharge its obligation. Financial instruments that subject the Company to credit risk consist primarily of cash and trade and other receivables. The credit risk relating to cash balances is limited because the Company holds its cash in Canadian rated financial institutions and will only consider investment of excess cash in highly rated government and corporate debt securities or guaranteed certificates from Canadian chartered banks. The amounts reported for trade receivables in the consolidated statements of financial position are net of allowances for credit losses and bad debts and the net carrying value represents the Company’s maximum exposure to credit risk. Trade receivables credit exposure is minimized by entering into transactions with creditworthy counterparties and monitoring the age and balances outstanding on an ongoing basis. Payment terms with customers are generally payment prior to shipment.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. To the extent that the Company does not believe it has sufficient liquidity to meet its current obligations, the Board of Directors considers securing additional funds through issuances of equity and debt or partnering transactions. The Board of Directors approves any material transactions outside the ordinary course of business. Management regularly reviews the Company’s operating and capital budgets and maintains short-term cash flow forecasts. The Company monitors its risk of shortage of funds by monitoring the maturity dates of existing trade and other accounts payable. The Company’s trade payables which have contractual maturities of 30 days or are due on demand. Amounts due to related party and notes payable within the next 12 months. The CEBA loan payable has a maturity date on December 31, 2026.

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FREQUENCY EXCHANGE CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited- Prepared by Management)

(EXPRESSED IN CANADIAN DOLLARS)

18. FINANCIAL INSTRUMENTS (cont'd...)

Currency risk

The Company operates primarily in Canadian dollars and as such is not significantly affected by the fluctuations of the Canadian dollar with other currencies. The Company is, however, subject to currency risk due to its online sales to customers in foreign jurisdictions.

Interest rate risk

The Company is exposed to interest rate risk arising from cash held in Canadian financial institutions. The interest rate risk on cash is not considered significant due to its short-term nature and maturity. The Company’s convertible notes bear interest at fixed rates. The exposure to interest rates for the Company is considered minimal. The Company has not used any financial instrument to hedge potential fluctuations in interest rates.

19. FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

As at March 31, 2026 and 2025, the Company has no financial assets or liabilities recorded at FVTPL or FVOCI.

20. EVENTS AFTER THE REPORTING PERIOD

Subsequent to March 31, 2026, the Company:

a) Issued 866,665 common shares on the exercise of 866,665 warrants at an exercise price of $0.25 per share for gross proceeds of $216,666.

b) formed a partnership with Seed Group, a company of The Private Office of Sheikh Saeed bin Ahmed Al Maktoum. This strategic relationship reflects a shared focus on supporting innovation in the UAE’s fast-growing digital health and wellness sector.

By joining forces with Seed Group, Frequency Exchange Corp. can leverage the Group’s regional expertise and influential network, enabling a more informed market entry. The conglomerate will support the Canada-based firm in navigating regulations, tapping into business opportunities, and scaling operations across the MENA region.