Zenith Capital — Annual Report 2025

Nov 26, 2025

ZENITH CAPITAL CORPORATION
(A Capital Pool Company)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED JULY 31, 2025, AND 2024
(EXPRESSED IN CANADIAN DOLLARS)

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manning elliott

17th floor, 1030 West Georgia St., Vancouver, BC, Canada V6E 2Y3

Tel: 604.714.3600 Fax: 604.714.3669 Web: manningelliott.com

INDEPENDENT AUDITORS' REPORT

To the Shareholders and Directors of Zenith Capital Corporation

Opinion

We have audited the financial statements of Zenith Capital Corporation (the "Company") which comprise:

• the statements of financial position as at July 31, 2025 and 2024;
• the statements of loss and comprehensive loss for the years ended July 31, 2025 and 2024;
• the statements of changes in equity (deficiency) for the years ended July 31, 2025 and 2024;
• the statements of cash flows for the years ended July 31, 2025 and 2024; and
• the notes to the financial statements, including material accounting policy information and other explanatory information.

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

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the accompanying financial statements, which describes matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended July 31, 2025. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our report.

Other Information

Management is responsible for the other information. The other information comprises the Company's Management Discussion and Analysis to be filed with the relevant Canadian securities commissions.

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

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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

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

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

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

Auditors' Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are, therefore, the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditors' report is Joseph Bonvillain.

Manning Elliott LLP

CHARTERED PROFESSIONAL ACCOUNTANTS
Vancouver, British Columbia
November 21, 2025

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ZENITH CAPITAL CORPORATION
STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian dollars)

	Note	As at
		July 31, 2025	July 31, 2024
ASSETS
Current assets
Cash		$ -	$ 6,673
GST recoverable	4	1,617	429
Total assets		$ 1,617	$ 7,102
LIABILITIES
Current liabilities
Bank overdraft		$ 68	$ -
Accounts payable and accrued liabilities	5	123,037	98,352
Due to related parties	7	51,915	10,865
Total liabilities		$ 175,020	$ 109,217
DEFICIENCY
Share capital	6	$ 543,311	$ 543,311
Contributed surplus		114,479	114,479
Deficit		(831,193)	(759,905)
Total deficiency		(173,403)	(102,115)
Total liabilities and deficiency		$ 1,617	$ 7,102

Nature of Business and continuation of operations (Note 1)

Approved and authorized for issue on behalf of the Board on November 21, 2025

"Charalambos Katevatis"
Charalambos Katevatis, Director

"Vivian Katsuris"
Vivian Katsuris, Director

The accompanying notes are an integral part of these financial statements

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ZENITH CAPITAL CORPORATION
STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Expressed in Canadian dollars)

		For the Years Ended
	Note	July 31, 2025	July 31, 2024
Expenses:
Professional fees		$ 46,626	$ 143,007
Transfer agent and filing fees		15,651	24,271
Rent	7	6,813	15,000
Office, telephone and miscellaneous		1,482	2,149
Regulatory Fees		716	-
Total expenses		(71,288)	(184,427)
Net and comprehensive loss for the year		$ (71,288)	$ (184,427)
Net loss per share, basic and diluted		$ (0.02)	$ (0.04)
Weighted average number of shares outstanding		4,215,420	4,215,420

The accompanying notes are an integral part of financial statements.

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ZENITH CAPITAL CORPORATION
STATEMENTS OF CHANGES IN EQUITY (DEFICIENCY)
(Expressed in Canadian dollars)

	Share capital		Contributed Surplus	Deficit	Total
	Number of shares (Note 6)	Amount
Balance, July 31, 2023	7,390,421	$ 543,311	$ 114,479	$ (575,478)	$ 82,312
Net and comprehensive loss	-	-	-	(184,427)	(184,427)
Balance, July 31, 2024	7,390,421	$ 543,311	$ 114,479	$ (759,905)	$ (102,115)
Net and comprehensive loss	-	-	-	(71,288)	(71,288)
Balance, July 31, 2025	7,390,421	$ 543,311	$ 114,479	$ (831,193)	$ (173,403)

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

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ZENITH CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)

For the Years Ended
	July 31, 2025	July 31, 2024
Cash Provided By (Used In)
Operating Activities
Net loss for the year	$ (71,288)	$ (184,427)
Changes in working capital:
GST recoverable	(1,188)	6,288
Accounts payable and accrued liabilities	24,685	94,417
Net cash used in operating activities	(47,791)	(83,722)
Financing Activity
Due to related parties	41,050	10,865
Net cash from financing activity	41,050	10,865
Decrease in cash	(6,741)	(72,857)
Cash, beginning of the year	6,673	79,530
Cash (bank overdraft), end of the year	$ (68)	$ 6,673

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

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ZENITH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 2025 AND 2024
(Expressed in Canadian dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS

Zenith Capital Corporation (the "Company") was incorporated on March 11, 2019, under the Business Corporation Act in the province of British Columbia. During the year ended July 31, 2020, the Company completed its Initial Public Offering ("IPO") to be classified as a Capital Pool Company ("CPC") as defined by the TSX Venture Exchange ("TSXV"). The Company trades its shares on the TSXV under the trading symbol ZENI.P. The address of the Company's registered office and head office is 2475 Queens Avenue, West Vancouver, British Columbia, V7V 2Y9.

The principal activity of the Company is the identification and evaluation of assets or a business and once identified or evaluated, to negotiate an acquisition of, or participation in, a business subject to receipt of shareholders' approval, if required, and acceptance by regulatory authorities (the "Qualifying Transaction"). Where an acquisition or participation is warranted, additional funding may be required. The ability of the Company to fund its potential future operations and commitments is dependent upon the ability of the Company to identify, evaluate and negotiate an acquisition, participate in or invest in an interest in a Qualifying Transaction, and obtain additional financing. The Company has not identified a business or asset that warrants acquisition or participation.

As at July 31, 2025, the Company had a working capital deficit of $173,403 (July 31, 2024 - $102,115) and an accumulated deficit of $831,193 (July 31, 2024 - $759,905). The Company's solvency, its ability to meet its liabilities as they become due, and to continue its operations, is dependent on continued funding provided by investors. There is no assurance that the Company will receive such funding, or that the funding will be on terms favorable to the Company. If the Company is unable to raise additional capital in the future, the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures or cease operations. These factors, among others, indicate the existence of a material uncertainty that casts significant doubt about the Company's ability to continue as a going concern and the impact of these adjustments could be material.

These financial statements have been prepared on a going concern basis, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in these financial statements.

2. BASIS OF PREPARATION

a) Statement of compliance

The financial statements are prepared in accordance with and using accounting policies consistent with the IFRS Accounting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB").

The financial statements were approved and authorized for issue in accordance with a resolution from the Board of Directors on November 21, 2025.

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ZENITH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 2025 AND 2024
(Expressed in Canadian dollars)

2. BASIS OF PREPARATION (continued)

b) Basis of presentation

These financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

3. MATERIAL ACCOUNTING POLICIES

These financial statements have been prepared on a going concern basis, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.

a) Significant Accounting Estimates and Judgements

The preparation of these financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses for the periods reported. Significant areas requiring the use of management estimates are the measurement of deferred income tax assets and liabilities. Actual results could differ from these estimates.

Critical accounting judgements are accounting policies that have been identified as being complex or involving subjective or assessments with a significant risk of material adjustment. Significant areas requiring critical accounting judgements include the Company's ability to carry on as a going concern and the determination of financial assets and liabilities.

b) Income Taxes

Current 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 financial statements date, and includes any adjustments to tax payable or receivable in respect of previous years. Deferred income taxes are recorded using the liability method whereby deferred 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 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 statement of financial position date.

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ZENITH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 2025 AND 2024
(Expressed in Canadian dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

b) Income Taxes (continued)

Deferred tax is not recognized for temporary differences which arise on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting, nor taxable profit or loss.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

c) Loss Per Share

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. A diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive. Basic and diluted loss per share excludes all the Company's common shares from the weighted average shares calculation that are contingently returnable.

d) Share Issuance Costs

Professional, consulting, regulatory and other costs directly attributable to financing transactions are recorded as deferred financing costs until the financing transactions are completed, if the completion of the transaction is considered likely; otherwise, they are expensed as incurred. Share issue costs are charged to share capital when the related shares are issued. Deferred financing costs related to financing transactions that are not completed are charged to operations.

e) Share-based payments.

The fair value of equity settled stock options awarded to employees defined under IFRS 2 Share based payments (i.e. employees for legal and tax purpose, directors and certain consultants), determined as of the date of grant, and awarded to non-employees defined under IFRS 2, as of the date of delivery of service, is recognized as share-based payments, included in general and administrative expenses in the statement of comprehensive loss, over the vesting period of the stock options based on the estimated number of options expected to vest, with a corresponding increase to equity.

f) Financial Instruments

On initial recognition financial assets are classified as measured at:

i. Amortized cost.
ii. Fair value through other comprehensive income ("FVOCI"); and
iii. Fair value through profit and loss ("FVTPL").

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ZENITH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 2025 AND 2024
(Expressed in Canadian dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

f) Financial Instruments (continued)

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Financial assets are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. Subsequent measurement of financial assets depends on their classification:

i. Amortized cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included as finance income using the effective interest rate method.

The Company does not have any assets classified as amortized cost.

ii. FVOCI

Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains and losses, interest revenue, and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains (losses). Interest income from these financial assets is included as finance income using the effective interest rate method.

The Company does not have any assets classified at FVOCI.

iii. FVTPL

Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on an investment that is subsequently measured at FVTPL is recognized in profit or loss and presented net as revenue in the Statement of Loss and Comprehensive Loss in the period in which it arises.

The Company's cash is classified at FVTPL.

Financial Liabilities and Equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the group entities are recorded at the proceeds received, net of direct issue costs.

Financial liabilities are classified as measured at (i) FVTPL; or (ii) amortized cost.

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ZENITH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 2025 AND 2024
(Expressed in Canadian dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

f) Financial Instruments (continued)

A financial liability is classified as at FVTPL if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognized in profit or loss as incurred. The amount of change in the fair value that is attributable to changes in the credit risk of the liability is presented in OCI and the remaining amount of the change in the fair value is presented in profit or loss.

The Company does not classify any financial liabilities at FVTPL.

Other non-derivative financial liabilities are initially measured at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method.

The Company classifies its bank overdraft, accounts payable and due to related parties at amortized cost.

A financial liability is derecognized when the contractual obligation under the liability is discharged, cancelled or expires or its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

g) Adoption of new accounting standards, interpretations, and amendments

A number of new standards, and amendments to standards and interpretations, are not yet effective for the year ended July 31, 2025, and have not been early adopted in preparing these financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18 – Presentation and Disclosure in Financial Statements which will replace IAS 1, Presentation of Financial Statements. The key new concepts introduced in IFRS 18 relate to the structure of the statement of earnings (loss), required disclosures in the financial statements for certain earnings or loss performance measures that are reported outside an entity's financial statements and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. IFRS 18 will apply for reporting periods beginning on or after January 1, 2027, and also applies to comparative information. The Company is still in the process of assessing the impact of this standard on its financial statements.

4. GST recoverable

The Company's tax receivable for the year ended July 31, 2025, and 2024, are composed of the following:

	July 31, 2025	July 31, 2024
GST recoverable	$ 1,617	$ 429

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ZENITH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 2025 AND 2024
(Expressed in Canadian dollars)

5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

For the years ended July 31, 2025 and July 31, 2024, the company’s accounts payable and accrued liabilities consist of the following:

	July 31, 2025	July 31, 2024
Professional fees	$ 122,272	$ 98,139
Transfer agent and filing fees	765	213
	$ 123,037	$ 98,352

6. SHARE CAPITAL

Authorized

The Company has authorized share capital of an unlimited number of common shares and preferred shares without par value. Common and/or preferred shares are entitled to receive dividends when they are declared by the Board of Directors.

Issued and outstanding Common Shares

As at July 31, 2025, the Company has a total issued and outstanding common shares of 7,390,421 (July 31, 2024 – 7,390,421)

Escrow shares

As at July 31, 2025, there were 3,175,001 (July 31, 2024 – 3,175,001) common shares held in escrow.

Stock Options

During the year ended July 31, 2020, the Company adopted a Stock Option Plan ('Plan') for directors and officers of the Company. The Company may grant options to individuals, options are exercisable over periods of up to five years, as determined by the Board of Directors of the Company, to buy shares of the Company at the fair market value on the date the option is granted. The maximum number of shares which may be issuable under the Plan cannot exceed 10% of the total number of issued and outstanding shares on a non-diluted basis.

A continuity of the options outstanding and exercisable as at July 31, 2025 is as follows:

	Number of Options	Weighted average
Balance, July 31, 2023, and 2024	100,000	$ 0.10
Expired	(100,000)	0.10
Balance, July 31, 2025	-	$ -

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ZENITH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 2025 AND 2024
(Expressed in Canadian dollars)

7. RELATED PARTY BALANCES AND 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. 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.

As of July 31, 2025, the Company has $ 51,915 (July 31, 2024 – $10,865) due to related parties, unsecured, non-interest bearing, and due on demand broken down as follows:

	July 31, 2025	July 31, 2024
Company controlled by the CEO	$ 40,103	$ 5,865
Company with common Directors	$ 11,812	$ 5,000
	$ 51,915	$ 10,865

The Company has incurred the following costs from related parties:

	July 31, 2025	July 31, 2024
Company with common Directors – office rent	$ 6,813	$ 15,000

Key management includes directors and key officers of the Company, including the President, Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") and key management compensation was $Nil for the year ended July 31, 2025, and July 31, 2024.

8. MANAGEMENT OF CAPITAL

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern and to maintain a flexible capital structure which will allow it to pursue the completion of a Qualifying Transaction (QT) as defined in TSXV Policy 2.4. Therefore, the Company monitors the level of risk incurred in its expenditures relative to its capital structure.

The Company considers its capital structure to include equity. The Company monitors its capital structure and makes adjustments in light of changes in economic conditions and the risk characteristics of the potential underlying assets. To maintain or adjust the capital structure, the Company may issue new equity if available on favorable terms and approved by the TSXV.

As a CPC, the Company will be subject to externally imposed capital requirements as outlined in the TSXV Policy 2.4 and summarized below:

(a) No salary, consulting, management fees or similar remuneration of any kind may be paid directly or indirectly to a related party of the Company or a related party of a QT;
(b) Gross proceeds realized from the sale of all securities issued by a CPC may only be used to identify and evaluate assets or businesses and obtain shareholder approval for a QT.
(c) No more than the lesser of $210,000 and 30% of the gross proceeds from the sale of securities issued by a CPC may be used for purposes other than to identify and evaluate a QT; and
(d) After the completion of its IPO and until the completion of a QT, a CPC may not issue any securities unless written acceptance of the TSXV is obtained before the issuance of the securities.

There were no changes in the Company's approach to capital management during the year ended July 31, 2025.

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ZENITH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 2025 AND 2024
(Expressed in Canadian dollars)

9. FINANCIAL INSTRUMENTS AND FINANCIAL RISK

International Financial Reporting Standards 7, Financial Instruments: Disclosures, establishes a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
• Level 2 – Quoted prices in markets that are not active, or inputs that are not observable, either directly or indirectly, for substantially the full term of the asset or liability.
• Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Fair value of financial instruments

The Company’s financial assets include cash and is classified as Level 1. The carrying value of the instruments approximates their fair values due to the relatively short periods of maturity of the instruments.

Assets measured at fair value on a recurring basis were presented on the Company’s statement of financial position as at July 31, 2025.

Financial risk management objectives and policies

The Company’s financial instruments include cash, overdraft, accounts payable and amounts due to related parties. 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.

Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

(i) Currency risk

The Company’s expenses are denominated in Canadian dollars. The Company’s corporate office is based in Canada and current exposure to exchange rate fluctuations is minimal.

The Company does not have any significant foreign currency denominated monetary liabilities. The principal business of the Company is the identification and evaluation of assets or a business and once identified or evaluated, to negotiate an acquisition or participation in a business subject to receipt of shareholder approval and acceptance by regulatory authorities.

(ii) Interest rate risk

The Company is exposed to interest rate risk on the variable rate of interest earned on bank deposits. The fair value interest rate risk on bank deposits is insignificant as the deposits are short-term.

The Company has not entered into any derivative instruments to manage interest rate fluctuations.

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ZENITH CAPITAL CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 2025 AND 2024
(Expressed in Canadian dollars)

9. FINANCIAL INSTRUMENTS AND FINANCIAL RISK (continued)

(iii) Credit risk

Credit risk is the risk of loss associated with the counterparty's inability to fulfill its payment obligations. Financial instruments that potentially subject the Company to concentrations of credit risks consist principally of cash. To minimize the credit risk the Company places these instruments with a high-quality financial institution.

(iv) Liquidity risk

In the management of liquidity risk of the Company, the Company maintains a balance between continuity of funding and flexibility through the use of borrowings. The Company has a working capital deficit and requires cash financing to fund operations and meet its current obligations. Management closely monitors the liquidity position and expects to have adequate sources of funding to finance the Company's projects and operations.

10. SEGMENT INFORMATION

Reportable segments are defined as components of an enterprise about which discrete financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company operates in one business segment, being a Capital Pool Company. The Company is located only in Canada, their assets and income (loss) information is as follows:

	July 31, 2025	July 31, 2024
Total assets	$ 1,617	$ 7,102
Loss (income) for the year	$ 71,288	$ 184,427

11. INCOME TAXES

The following table reconciles the amount of income tax recoverable on application of the combined statutory Canadian federal and provincial income tax rates:

	2025	2024
Loss for the year	$ (71,288)	$ (184,427)
Canadian statutory income tax rate	27%	27%
Income tax recovery at statutory rate	$ (19,248)	$ (49,795)
Effect of income taxes of:
Permanent difference and others	-	13,071
Change in deferred tax assets not recognized	19,248	36,724
Deferred income tax recovery	$ -	$ -

The significant components of the Company's temporary differences that have not been included on the statement of financial position are as follows:

	2025	2024
Non-Capital losses available for future periods	$ 192,789	$ 173,541
Deferred tax assets not recognized	(192,789)	(173,541)
	$ -	$ -

As of July 31, 2025, the Company had approximately $714,031 (2024 - $642,743) in non-capital loss carry forward available to reduce taxable income for future year. The non-capital losses begin to expire in 2040 through 2045.

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