Financial statements
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FIRST CANADIAN GRAPHITE INC. (An Exploration Stage Company) Consolidated Financial Statements (unaudited) For The Three Months Ended May 31, 2026 and 2025 (Expressed in Canadian dollars)
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Page 1 Reader’s Note: These unaudited condensed interim consolidated financial statements have been prepared by management and have not been reviewed by the Company’s auditor.
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FIRST CANADIAN GRAPHITE INC. Consolidated Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited) The accompanying notes are an integral part of these condensed interim consolidated financial statements. Page 2 May 31 February 28 2026 2026 ASSETS Current Cash $ 3,575,185 $ 2,690,781 Accounts Receivable 10,883 30,387 Prepaid expenses 66,576 47,944 Marketable securities 56,170 0 3,708,814 2,769,112 Non-Current Furniture and equipment 4 2,097 2,237 Mineral properties 5 1,236,126 1,236,126 $ 4,947,037 $ 4,007,475 LIABILITIES Current Accounts payable and accrued liabilities $ 81,735 $ 61,895 Flow-through share premium 7 61,500 - Due to related parties 6 24,055 60,382 167,290 122,277 EQUITY Share capital 7 45,907,287 44,958,802 Contributed surplus 8 5,404,414 5,363,878 Deficit (46,531,954) (46,437,482) 4,779,747 3,885,198 $ 4,947,037 $ 4,007,475 As at Notes Approved and authorized by the Board of Directors on July 29, 2026. “John LaGourgue” “Michael Iverson” Director – John LaGourgue Director – Michael Iverson
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FIRST CANADIAN GRAPHITE INC. Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars) (Unaudited) The accompanying notes are an integral part of these condensed interim consolidated financial statements. Page 3 2026 2025 EXPENSES Amortization 4 $ 140 $ 140 Consulting fees 6 76,316 78,000 Exploration and evaluation 5 & 6 66,599 84,971 Investor relations 45,121 14,292 Office and administration 18,153 4,355 Professional fees 6 50,230 21,830 Transfer agent and filing fees 9,289 8,890 (265,848) (212,478) OTHER INCOME (EXPENSE) Mining tax credit 105,206 - Unrealized gain on marketable securities 5 16,440 - Gain on sale of mineral property 5 49,730 - 171,376 - Loss for the year $ (94,472) $ (212,478) Basic and diluted loss per share $ (0.00) $ (0.01) Weighted average number of common shares outstanding - basic and diluted 24,927,013 20,547,441 For the years end February 28, Notes
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FIRST CANADIAN GRAPHITE INC. Consolidated Statements of Changes in Shareholders’ Equity (Expressed in Canadian Dollars) (Unaudited) The accompanying notes are an integral part of these condensed interim consolidated financial statements. Page 4 Note Number of shares Share capital Contributed surplus Deficit Total Balance, February 28, 2025 20,547,441 40,422,263 5,337,815 (45,113,084) 646,994 Loss for the period - - - (212,478) (212,478) Balance, March 31, 2025 20,547,441 40,422,263 5,337,815 (45,325,562) 434,516 Private placement, net of issuance costs 7 20,428,413 3,952,710 97,241 - 4,049,951 Exercise of warrants 7 548,846 54,885 - - 54,885 Allocation to share capital on warrant exercise 7 - 8,433 (8,433) - - Exercise of stock options 7 1,117,200 120,096 - - 120,096 Allocation to share capital on option exercise 7 - 400,415 (400,415) - - Stock-based compensation 6 & 8 - - 337,670 - 337,670 Loss for the period - - - (1,111,920) (1,111,920) Balance, February 28, 2026 42,641,900 $ 44,958,802 $ 5,363,878 $ (46,437,482) $ 3,885,198 Private placement, net of issuance costs 7 2,050,000 852,968 40,536 - 893,504 Exercise of warrants 7 572,714 95,517 - - 95,517 Loss for the period - - - (94,472) (94,472) Balance, May 31, 2026 45,264,614 $ 45,907,287 $ 5,404,414 $ (46,531,954) $ 4,779,747
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FIRST CANADIAN GRAPHITE INC. Consolidated Statements of Cash Flows (Expressed in Canadian Dollars) (Unaudited) The accompanying notes are an integral part of these condensed interim consolidated financial statements. Page 5 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period $ (94,472) $ (212,478) Items not affecting cash: Amortization 140 140 Gain on sale of mineral properties (39,730) - Unrelaized gain on marketable securities (16,440) - Changes in non-cash working capital items: Accounts receivable 19,504 21,236 Prepaid expenses (18,632) 30,249 Accounts payable and accrued liabilities 19,844 (45,367) Due to related parties (36,327) 30,310 Net cash used in operating activities (166,113) (175,910) CASH FLOWS FROM FINANCING ACTIVITIES Shares issued for cash, net of issuance costs 955,000 - Proceeds on exercise of warrants 95,517 - Net cash provided by financing activities 1,050,517 - Change in cash for the period 884,404 (175,910) Cash, beginning of period 2,690,781 293,468 Cash, end of period $ 3,575,185 $ 117,558 Supplemental disclosure with respect to cash flows (Note 11)
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 6 1. NATURE OF OPERATIONS AND GOING CONCERN First Canadian Graphite Inc. (the “Company”) was incorporated under the laws of British Columbia on January 15, 1979 and its principal business activities include the exploration and development of natural resource properties. The Company is publicly listed on the TSX Venture Exchange (the “Exchange”) under the symbol “FCI”. The Company’s corporate office and principal place of business is at 206-837 West Hastings Street, Vancouver, BC, V6C 3N6. On April 29, 2025 , the Company announced that the board of directors have approved a change of the Company’s name to “First Canadian Graphite Inc.”, subject to acceptance of the TSX Venture Exchange. On June 18, 2025, the Company received TSX approval to change its name from “Green Battery Minerals Inc.” to “First Canadian Graphite Inc.”, and effective June 20, 2025, the Company’s common shares will commence trading under a new symbol FCI. These condensed interim consolidated financial statements are prepared on a going concern basis, which assumes that the Company will be able to realize assets and discharge liabilities in the normal course of business. The Company has incurred ongoing losses since inception . During the three months ended May 31, 2026, the Company report ed a net loss of $94,472 (May 31, 2026 - $212,478) and as of that date had an accumulated deficit of $46,531,954 (February 28, 2026 - $46,437,482). The ability of the Company to continue as a going concern and meet its commitments as they become due, including exploration and development of its mineral property interests, is dependent on the Company’s ability to obtain the necessary financing. Managem ent is currently assessing alternatives to raising additional funding , which includes additional equity offerings or alternatively to dispose of its interests in certain mineral properties. The outcome of these matters cannot be predicted at this time. If the Company is unable to obtain additional financing, management will be required to curtail the Company’s operations. The business of mining exploration involves a high degree of risk and there is no assurance that current exploration projects will result in future profitable mining operations. The Company has no source of revenue and has significant cash requirements to meet its administrative overhead, pay its debts and liabilities, and maintain its mineral property interests. The recoverability of amounts shown for mineral property interests is dependent on several factors. These include the discovery of economically re coverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from disposition of mineral property interests. The carrying value of the Company ’s mineral property interests may not reflect current or future values. The above indicate material uncertainties that raise significant doubt about the Company’s ability to be able to continue as a going concern. These condensed interim consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 7 2. BASIS OF PREPARATION (a) Statement of compliance These condensed interim consolidated financial statements have been prepared in accordance with IFRS Accounting Standards issued by the International Accounting Standards Board (“IASB”) (“IFRS”). (b) Basis of measurement These condensed interim consolidated financial statements are presented in Canad ian dollars which is the functional currency of the Company and its subsidiaries . These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments carried at fair value, and uses the accrual basis of accounting, except for cash flow information. The material accounting policies set out in Note 3 have been applied consistently by the Company and its subsidiaries for all periods presented. 3. MATERIAL ACCOUNTING POLICIES (a) Use of judgements and estimates In preparing these interim financial statements, management has made judgments and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty are consistent with those described in the February 28, 2026 annual financial statements. (b) Standards and interpretations issued but not yet effective At the date of authorization of these condensed interim financial statements, the IASB has not issued any new or revised standards expected to have a material impact on the results and financial position of the Company when adopted.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 8 4. FURNITURE AND EQUIPMENT Furniture ($) Field Equipment ($) Total ($) Cost Balance at May 31, 2026 and February 28, 2026 11,739 30,704 42,443 Accumulated amortization Balance at February 28, 2025 8,942 30,704 39,646 Addition 560 - 560 Balance at February 28, 2026 9,502 30,704 40,206 Addition 160 - 160 Balance at May 31, 2026 9,642 30,704 40,346 At May 31, 2026 2,097 - 2,097 At February 28, 2026 2,237 - 2,237 5. MINERAL PROPERTIES The Company has capitalized the following acquisition expenditures as at February 28, 2026 and 2025: Lac Gueret South Stallion Jupiter Total Balance, February 28, 2025 1,213,515$ 1$ -$ 1,213,516$ Additions 22,610.00 - - 22,610 Balance, February 28, 2026 1,236,125 1 - 1,236,126 Additions - - - - Balance, May 31, 2026 1,236,125$ 1$ -$ 1,236,126$ The Company expensed the following exploration and evaluation expenditures during the three months ended May 31, 2026: Lac Gueret South Total Geological consulting 53,702$ 53,702$ Field and camp costs 12,897 12,897 66,599$ 66,599$
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 9 5. MINERAL PROPERTIES (continued) The Company expensed the following exploration and evaluation expenditures during the three months ended May 31, 2025: Lac Gueret South Stallion Jupiter Total Geological consulting (Note 6) 12,188$ -$ -$ 12,188$ Survey - 44,000 - 44,000 Settlement & release - - 20,000 20,000 Others 8,783 - - 8,783 20,971$ 44,000$ 20,000$ 84,971$ (a) Lac Guérêt South Property, Quebec The Company entered into an option agreement dated July 26, 2014 to acquire a 100% interest in the Lac Guérêt South Property. The agreement was approved by the Exchange on August 13, 2014. Under the terms of the option agreement, the Company may acquire a 100% interest in the Lac Guérêt South graphite property by making cash payments and issuing the Company’s securities as set forth below: (i) On signing of the option agreement: $15,000 (paid); (ii) Within seven days of the date of approval of the agreement by the Exchange: $10,000 (paid) and 3,750 units (issued). Each unit comprised one common share and one common share purchase warrant, exercisable for 24 months at $4.00 to acquire an additional common share; (iii) Within thirty days of the date of approval of the agreement by the Exchange: $10,000 (paid); (iv) Within six months of the date of approval of the agreement by the Exchange: $25,000 (amended to be due July 29, 2016) (paid); and (v) Within 12 months of the date of approval of the agreement by the Exchange: $25,000 (amended to be due January 29, 2017) (paid). A 2% net smelter return (“NSR”) is payable to the optionors on all minerals produced from the property. The Company has the right at any time to buy back 2% of the NSR from the optionors for $1,000,000. During the year ended February 28, 2018, the Company expanded its Lac Guérêt Extensions project (South & East blocks). The Company acquired more claims adjacent to and on -trend with Mason Graphite. The Company paid $25,000 and issued 6,250 common shares of the Company fair valued at $56,250. During the year ended February 28, 2018, the Company issued 15,750 common shares by way of a share exchange agreement fair valued at $220,500 and paid $15,000 to an arm’s-length party. There are no royalties payable and the Company owns 100% of the Turkey Lake property.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 10 5. MINERAL PROPERTIES (continued) (a) Lac Guérêt South Property, Quebec (continued) During the year ended February 28, 2019, the Company entered into an agreement with 1137794 B.C. Ltd. to acquire fifty -eight (58) claims located adjacent to Lac Guérêt South Property. The Company has issued 70,000 common shares by way of a share exchange agreement fair valued at $392,000 and paid $20,000 to an arm’s -length party. There are no royalties payable and the Company increased its landholding at the Company's 100% owned Lac Guérêt Project. On October 30, 2018, the Company signed an agreement with Progressive Planet Solutions Inc. (PLAN - TSX:V) (“Progressive Planet”). The terms of the agreement allow Progressive Planet to earn a 5% interest to the Lac Guérêt South Graphite property in exchange for expenditure of $250,000 on the project by December 31, 2018. During a period of six months, either party will have the right to execute a buy -back scenario in which the Company would purchase the 5% back by issuing to Progressive Planet 43,750 units in the Company. Each unit will entitle Progressive Planet to receive one share, and one-half warrant of the Company, which at the time of signing this agreement constitutes 5% of the issued and outstanding shares of the Company. This transaction has been approved by the Exchange. On January 29, 2019, the Company bought back the 5% interest from Progressive Planet by issuing 43,750 common shares of the Company fair valued at $140,000 and 87,500 warrants fair valued at $20,800 Each warrant is exercisable at a price of $1.50 per share for a period of two years from the date of closing. During the year ended February 28, 2019, the Company signed an agreement with Intact Gold Corp. (ITG - TSX:V) (“Intact”). The terms of the agreement allow Intact to earn a 2.5% interest to the Lac Guérêt South Graphite property in exchange for expenditure of $125,000 on the project by December 31, 2018. During a period of six months, either party will have the right to execute a buy -back scenario in which the Company would purchase the 2.5% back by issuing to Intact 2,187 units in the Company. Each unit will entitle Intact to receive one share, and one-half warrant of the Company. On April 18, 2019, the Company bought back the 2.5% interest from Intact by issuing 2,187 common shares of the Company fair valued at $52,500 and 4,375 warrants fair valued at $5,179. Each warrant is exercisable at a price of $6.00 per share for a period of two years from the date of closing. On August 7, 2019, the Company entered into an agreement to acquire 1215616 B.C. Ltd., a private British Columbia company, which sole asset is fifty-eight (58) claims located adjacent to Lac Guérêt South Property. The Company has issued 48,750 common shares by way of a share exchange agreement fair valued at $68,250 and paid $11,500 to an arm’s -length party. The sole asset of 1215616 B.C. Ltd. was the fifty -eight claims located adjacent to the Lac Guérêt South Property. For accounting purposes, the acquisition has been recorded as an asset acquisition as 1215616 B.C. Ltd. did not meet the definition of a business, as defined in IFRS 3 Business Combinations (“IFRS 3”). During the year ended February 28, 2026, the Company staked an additional claims for $22,610 in the surrounding and immediate area of its Lac Guérêt South project.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 11 5. MINERAL PROPERTIES (continued) (a) Lac Guérêt South Property, Quebec (continued) On January 27, 2023, the Company entered into an agreement to acquire from Contigo Resources Ltd., seven (7) claims located adjacent to Lac Guérêt South Property. The Company paid $5,728 to an arm’s-length party. On February 8, 2023, the Company entered into an agreement to acquire from arm’s length parties, twenty- two (22) claims located adjacent to Lac Guérêt South Property. The Company has issued 58,700 warrants by way of a share exchange agreement and paid $3,520 to an arm’s-length party. The warrants have a fair value of $34,869. On February 23, 2023, the Company entered into an agreement to acquire from arms-length parties, thirty (30) claims located adjacent to Lac Guérêt South Property. The Company has issued 61,300 warrants by way of a share exchange agreement to an arm’s-length party. The warrants have a fair value of $20,908. (b) Stallion Gold Project, British Columbia On October 27, 2020, t he Company entered into a definitive agreement to acquire mineral claims in British Columbia’s Golden Horseshoe region. During the year ended February 28, 2021, the Company acquired all of the issued and outstanding shares of Bench Minerals Corp. (“Bench”) by the issuance of 400,000 common shares (issued) of the Company with a fair value of $520,000 and $15,000 cash (paid) in consideration for the acquisition. The sole asset of Bench was the Stallion Gold Project claim. For accounting purposes, the acquisition has been recorded as an asset acquisition as Bench did not meet the definition of a business, as defined in IFRS 3. Bench was subsequently dissolved in August 2021. During the year ended February 28, 2025, the Company did not renew any claims. Indicators of impairment existed leading to test of recoverable amount, which resulted in the recognition of an impairment loss of $534,999 in accordance with Level 3 of the fair value hierarchy. A value-in-use calculation is not applicable as the Company does not have any expected cash flows from using the property at this stage of operations. In estimating the fair value less costs of disposal, management did not have observable or unobservable inputs to estimate the recoverable amount greater than $nil. On March 31, 2026, the Company completed the sale of the claims known as the Stallion Gold Project for total consideration of $10,000 cash (received) and 137,000 common shares with a fair value of $39,730 (received) of the acquirer, Hi -View Resources Inc . The Company recognized a gain on sale of mineral properties of $49,730 in the statement of operations. As at May 31, 2026, the Company recognized an unrealized gain on marketable securities of $16,440 relating to the fair value change of the 137,000 Hi-View Resources Inc shares on May 31, 2026.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 12 5. MINERAL PROPERTY INTERESTS (continued) (c) Jupiter Project, Quebec On May 3, 2023, the Company entered into an option agreement to acquire from Contigo Resources Ltd., one hundred twenty-two (122) claims located in Quebec, known as the Jupiter Project. Under the terms of the option agreement, the Company may acquire a 100% interest in the lithium property as per terms as set forth below: (i) Cash payment of $50,000 upon approval by the Exchange (paid); (ii) Minimum expenditure of $100,000 to be incurred by December 31, 2023 (incurred) ; (iii) Minimum expenditure of $500,000 to be incurred by October 31, 2024; (iv) Cash payment of $250,000 by October 31, 2024. A 2% NSR is payable to the optionors on all minerals produced from the property. The royalty will be reduced from 2.0% to 1.0% at any time prior to commencement of commercial production upon payment by optionee to the optionors of $1,500,000. During the year ended February 28, 2025, management decided not to pursue this project. Indicators of impairment existed leading to test of recoverable amount, which resulted in the recognition of an impairment loss of $50,000 in accordance with Level 3 of the fair value hierarchy. A value-in-use calculation is not applicable as the Company does not have any expected cash flows from using the property at this stage of operations. In estimating the fair value less costs of disposal, management did not have observable or unobservable inputs to estimate the recoverable amount greater than $nil. During the year ended February 28, 202 6, the Company made a cash settlement of $20,000 to Contigo Resources Ltd. as part of the settlement and release agreement for the Jupiter Project , which is included in exploration and evaluation expenses in the statement of loss. (d) Realization The Company’s investment in and expenditures on mineral property interests comprise a significant portion of the Company’s assets. Realization of the Company’s investment in the assets is dependent on establishing legal ownership of the property interest, on the attainment of successful commercial production, or from the proceeds of its disposal. The recoverability of the amo unts shown for the mineral property interest is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of the property interest, and upon future profitable production or proceeds from the disposition thereof. a. Title Although the Company has taken steps to ensure the title to the mineral properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures may not guarantee the Company’s title. Property title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects. b. Environmental Environmental legislation is becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation on the Company’s operations may cause additional expenses and restrictions. If the restrictions adversely affect the scope of exploration and development on the mineral property interest, the potential for production on the property may be diminished or negated.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 13 6. 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. Related parties may be individuals or corporate entities. A transa ction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The transactions below are in the normal course of operations. Key Management Compensation Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers and Board of Director members. Compensation paid to key management included the amounts above as follows: May 31, 2026 May 31, 2025 Consulting fees $ 45,292 $ 52,500 Consulting fees exploration 33,075 - Consulting (close family members) - 12,000 Professional fees - 15,000 $ 78,367 $ 79,500 During the three months ended May 31, 2026, the Company incurred consulting fees of $45,292 (2025 - $52,500) with a director and officer and a company controlled by an officer. During the three months ended May 31, 2026, the Company paid salary of $33,075 (2025 - $nil) to an officer that is included in exploration and evaluation expense. During the three months ended May 31, 2026, the Company incurred professional fees for financial services of $nil (2025 - $15,000) with an officer and director of the Company. As at May 31, 2026, $24,055 (February 28, 2025 - $60,382) was owed to directors and companies controlled by the directors. The amounts are non-interest bearing and there are no specified terms of repayment.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 14 7. SHARE CAPITAL (a) Authorized Unlimited common shares without par value. All shares issued are fully paid. (b) Issued and outstanding As at May 31, 2026, the issued share capital was comprised of 45,264,614 (February 28, 2026 – 42,641,900) common shares. During the three months ended May 31, 2026, the Company issued common shares as follows: • On March 6, 2026, the Company completed a flow-through share private place and issued 2,050,000 shares at a price of $0.50 for total gross proceeds of $1,025,000. The Company recognized a flow- through premium liability of $ 61,500 on issuance. The Company paid finders fees of $70,000 and issued 140,000 with a fair value of $45,532. Each finder’s warrant is exercisable into one common share of the Company at an exercise price of $0.50 for a period of two years. • During the three months ended May 31, 2026 , 572,714 warrants were exercised for total gross proceeds to the Company of $95,517. During the year ended February 28, 2026, the Company issued common shares as follows: • On July 24, 2025, the Company closed a private placement of 2,122,500 non-flow-through units at a price of $0.08 per non-flow-through unit for gross proceeds of $169,800. Each non -flow-through unit is comprised of one common share and one common share purchase warrant. Each wh ole warrant is exercisable at a price of $0.10 per share for a period of three years from the date of closing. The Company paid cash finders fees of $2,820 and paid legal fees of $7,790. • On August 6, 2025, the Company closed a private placement of 2,550,000 non -flow-through units at a price of $0.08 per non-flow-through unit for gross proceeds of $204,000. Each non-flow-through unit is comprised of one common share and one common share pur chase warrant. Each whole warrant is exercisable at a price of $0.10 per share for a period of three years from the date of closing. The Company paid cash finders fees of $1,800 and paid legal fees of $13,550. • On September 4, 2025, 200,000 warrants were exercised for total gross proceeds to the Company of $20,000. • On September 5, 2025, 50,000 options were exercised for total gross proceeds to the Company of $4,000. Upon exercise, $4,528 in contributed surplus was allocated to share capital. • On September 29, 2025, 173,846 warrants were exercised for total gross proceeds to the Company of $17,385. Upon exercise, $8,433 in contributed surplus was allocated to share capital. • On December 15, 2025, t he Company completed a flow -through private placement of 1,500,000 units at a price of $0.20 per unit for gross proceeds of $300,000. Each unit is comprised of one flow- through common share and one-half common share purchase warrant. Each full warrant is exercisable at a price of $0.25 per share for a period of two years from the date of closing. The Company has paid cash finders fees of $24,000, legal fees of $4,375 and issued 120,000 finder warrants with a fair value of $10,620 . The finder fee warrants have the same terms as the common share purchase warrants. On issuance, the Company bifurcated the flow-through units into i) share capital of $270,000 and ii) warrants of $30,000, which was allocated to contributed surplus.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 15 7. SHARE CAPITAL (continued) (b) Issued and outstanding • On January 7, 2026 , the Company completed a non-flow-through private placement of 4,916,333 units at a price of $0. 15 per unit for gross proceeds of $737,450. Each unit is comprised of one common share and one common share purchase warrant. Each warrant is exercisable at a price of $0.20 per share for a period of two years from the date of closing. The Company has paid cash finders fees of $30,231, legal fees of $ 18,550 and issued 186,550 finder warrants with a fair value of $30,523. The finder fee warrants have the same terms as the common share purchase warrants. • On January 14, 2026, 175,000 warrants were exercised for total gross proceeds to the Company of $17,500. • On January 19, 2026 , 852,500 options were exercised for total gross proceeds to the Company of $85,450. Upon exercise, $109,418 in contributed surplus was allocated to share capital. • On January 28, 2026 , 92,700 options were exercised for total gross proceeds to the Company of $11,686. Upon exercise, $108,984 in contributed surplus was allocated to share capital. • On February 17, 2026, 122,000 options were exercised for total gross proceeds to the Company of $18,960. Upon exercise, $177,485 in contributed surplus was allocated to share capital. • On February 17, 2026, the Company completed a non-flow-through private placement of 9,339,580 units at a price of $0. 30 per unit for gross proceeds of $2,801,874. Each unit is comprised of one common share and one -half common share purchase warrant. Each full warrant is exercisable at a price of $0.50 per share for a period of two years from the date of closing. The Company has paid cash finders fees of $38,802, legal fees of $21,255 and issued 125,440 finder warrants with a fair value of $26,098. The finder fee warrants have the same terms as the common share purchase warrants. The fair value of brokers warrants issued were calculated using the Black -Scholes Option Pricing Model using the following weighted average assumptions: May 31, 2026 February 28, 2026 Risk-fee interest rate 2.45% 2.47% Expected dividend yeild - - Expected stock price volatility 123.78% 120.89% Expected option life in years 2.00 2.00 Forfeiture rate - 0% Fair value on grant date 0.29$ $0.16
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 16 7. SHARE CAPITAL (continued) (c) Share purchase warrants As at May 31, 2026 and February 28, 2026, the Company had the following changes in warrants outstanding: May 31, 2026 Weighted Average Exercise Price February 28, 2026 Weighted Average Exercise Price Opening balance 27,693,693 $ 0.23 13,001,926 $ 0.18 Granted 140,000 $ 0.50 15,440,613 $ 0.11 Exercised (572,714) $ 0.17 (548,846) $ 0.10 Expired (58,700) $ 0.90 (200,000) $ 0.60 Ending balance 27,202,279 $ 0.23 27,693,693 $ 0.23 As at May 31, 2026 and February 28, 2026, the following warrants were outstanding and exercisable: Expiry Date Exercise price Warrants Weighted Average Expected life (years) Warrants Weighted Average Expected life (years) 22-Nov-25 $0.60 - - 200,000 0.73 3-Mar-26 $0.90 - - 58,700 1.01 25-Jul-26 $1.00 455,727 0.32 455,727 1.4 27-Jul-26 $0.90 61,300 0.32 61,300 1.41 6-Sep-26 $1.00 294,000 0.44 294,000 1.52 7-Sep-26 $1.00 19,750 0.44 19,750 1.52 29-Dec-26 $1.00 125,000 0.75 125,000 1.83 29-Dec-26 $0.70 25,000 0.75 25,000 1.83 11-Dec-27 $0.10 6,765,746 1.70 7,477,306 2.78 5-Feb-27 $0.10 4,285,143 0.85 4,285,143 1.94 24-Jul-28 $0.10 2,122,500 2.32 - - 6-Aug-28 $0.10 2,550,000 2.35 - - 16-Dec-27 $0.25 870,000 1.71 - - 7-Jan-28 $0.20 4,692,883 1.77 - - 17-Feb-28 $0.50 4,795,230 1.88 - - 6-Mar-28 $0.50 140,000 1.93 27,202,279 1.68 13,001,926 2.37 May 31, 2026 February 28, 2025
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 17 7. SHARE CAPITAL (continued) (d) Stock options A at May 31, 2026 and February 28, 2026 , the Company had the following changes in stock options outstanding: March 31, 2026 Weighted Average Exercise Price February 28, 2026 Weighted Average Exercise Price Opening balance 2,160,300 $ 0.39 1,947,500 $ 0.52 Granted 400,000 $ 0.27 1,750,000 $ 0.27 Exercised - $ 0.11 (1,117,200) $ 0.11 Expired/Cancelled (330,300) $ 0.18 (420,000) $ 0.18 Ending balance 2,230,000 $ 0.35 2,160,300 $ 0.39 As at May 31, 2026 and February 28, 2026, the following stock options were outstanding and exercisable: Expiry Date Exercise price Options Weighted Average Expected life (years) Options Weighted Average Expected life (years) April 16, 2026 $2.00 - - 15,300 0.00 January 6, 2027 $1.45 60,000 0.60 145,000 0.06 April 14, 2027 $1.00 20,000 0.87 45,000 0.02 March 3, 2028 $0.90 - - 25,000 0.02 May 12, 2028 $0.80 10,000 1.95 40,000 0.04 October 4, 2028 $0.50 40,000 2.35 40,000 0.05 February 6, 2030 $0.15 350,000 3.69 450,000 0.82 August 26, 2030 $0.15 100,000 4.24 100,000 0.21 January 8, 2031 $0.30 1,200,000 4.61 1,250,000 2.81 January 26, 2031 $0.30 50,000 4.66 50,000 0.11 March 11, 2031 $0.50 400,000 4.78 - - 2,230,000 4.29 2,160,300 4.15 May 31, 2026 February 28, 2026
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 18 7. SHARE CAPITAL (continued) (d) Stock options (continued) • On March 11, 2026 the Company granted 400,000 stock options with an exercise price of $0.50 that are exercisable 5 years from the date of grant. 8. CONTRIBUTED SURPLUS The Company has adopted a share incentive plan. The maximum number of shares issuable under the plan shall not exceed 10% of the Company’s issued and outstanding shares on each date where options are granted. Options granted may have a maximum term of ten years and must have an exercise price greater than or equal to the closing price of the Company’s shares on the day preceding the grant date. Options that have been cancelled or expired continue to be issuable under the plan. When the Company issues options, it records a stock -based payment compensation expense in the year or period in which the awards are granted and/or vested. Stock -based compensation expense related to options is estimated using the following assumptions. The expected volatility assumption is based on the historical and implied volatility of the Company’s common share price on the Exchange. The risk-free interest rate assumption is based on yield curves on Canadian government zero -coupon bonds with a remaining term equal to the stock options’ expected life. The Company uses historical data to estimate option exercise, forfeiture, and employee termination within the valuation model. The Company has not paid and does not anticipate paying dividends on its common stock. Companies are required to utilize an estimated forfeiture rate when calculating the expense for the reporting period. Based on the best estimate, management applied the estimated forfeiture rate of 0% in determining the expense recorded in the accompanying consolidated statements of loss and comprehensive loss. 9. CAPITAL MANAGEMENT The Company’s objective in managing its capital is to maintain the ability to continue as a going concern and to continue to explore on mineral property interests for the benefits of its stakeholders. The Company considers its capital to be the components of shareholders’ equity. Capital requirements are driven by the Company’s exploration activities on its mineral property interests. To effectively manage the Company’s capital requirements, the Company has a planning and budgeting process in place to ensure that adequate funds are available to meet its strategic goals. The Company monitors actual expenses to budget on all exploration projects and overheads to manage costs, commitments, and exploration activities. As the Company is in the exploration stage, its operations have been and will likely continue to be funded by the sale of equity to investors. Although the Company has been successful in raising funds in the past through issuing common shares, it is uncertain whether it will be able to continue to raise financing due to difficult conditions. The Company is not subject to any externally imposed capital requirements and did not change its approach to capital management during the three months ended May 31, 2026.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 19 10. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of investment policies, counterparty limits, and controlling and reporting s tructures. The type of risk exposure and the way in which such exposure is managed is provided as follows: (a) Fair value of financial instruments As at May 31, 2026 and February 28, 2026, the Company’s financial instruments consist of cash , accounts payable and accrued liabilities, and due to related parties. The fair value of cash is determined based on Level 1 inputs which consist of quoted prices in active markets for identical assets. As at February 28, 2026 and 2025, the Company believes that the carrying values of accounts payable and accrued liabilities and due to related parties approximate the fair values because of their nature and relatively short maturity dates or durations. (b) Credit risk Credit risk is the risk of a financial loss to the Company if counterparties to a financial instrument fail to meet their contractual obligations. The Company’s primary exposure to credit risk is on its cash held in financial institutions. The majority of cash is deposited in bank accounts held with major financial institutions in Canada. Credit risk is managed by using major banks that are high credit quality financial institutions as determined by ratings agencies. (c) Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk, and other price risk. (i) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company is not exposed to significant interest rate risk. (ii) Foreign currency risk Foreign currency risk is the risk that the fair values or future cash flows of a financial instrument will fluctuate, as they are denominated in currencies that differ from the respective functional currency. The Company is not exposed to significant foreign currency risk. (iii) Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to any other price risk.
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 20 10. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued) (d) 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 has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company endeavours to have sufficient funds to meet its short -term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash. Historically, the Company’s main source of funding has been from the issuance of equity securities for cash, primarily through private placements. At May 31, 2026, the Company had accounts payable and accrued liabilities of $81,735 (February 28, 2026 - $61,895) and amounts due to related parties of $24,055 (February 28, 2026 - $60,382). The Company’s accounts payable and accrued liabilities and amounts due to related parties have contractual maturities of less than 30 days and are subject to normal trade terms. 11. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS Non-cash investing and financing activities for the year ended May31, 2026: (a) Issued 140,000 warrants with a value of $40,532 as broker compensation (Note 7(b)). Non-cash investing and financing activities for the year ended February 28, 2026: (b) Issued 431,990 warrants with a value of $67,241 as broker compensation (Note 7(b)). 12. SEGMENTED INFORMATION The Company’s one reportable operating segment is the acquisition and exploration of mineral property interests. All assets and operations of the Company are located in Canada. 13. COMMITMENTS Funds raised through the issuance of flow -through shares are required to be expended on qualified Canadian mineral exploration expenditures, as defined under Canadian income tax legislation. The flow -through gross proceeds less than the qualified expenditures made to date represent the funds received from flow -through share issuances that are allotted for such expenditure but have not yet been spent. As of May 31, 2026, the company had flow-through share expenditure obligations of approximately $1,050,000 (February 28, 2026 - $55,000).
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FIRST CANADIAN GRAPHITE INC. Notes to the Consolidated Financial Statements For the three months ended May 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Page 21 14. EVENTS AFTER THE REPORTING PERIOD • On July 27, 2026, 45,000 stock options were exercised for total gross proceeds to the Company of $8,100. • On July 15, 2026, the Company entered into an option agreement dated, with two local prospectors, granting the Company the right to acquire a 100% interest in 51 contiguous EERs located in Northern Quebec. For the Company to earn a 100% interest in the claims, the Company has agreed to pay $30,000 in cash, issue an aggregate of 1,200,000 common shares, and incur $500,000 in exploration expenditures over a three period. The Company has also agreed to conditional milestone bonus payments, payable in cash, shares, or a combination thereof, at the Company's discretion: Milestone Achievement Bonus Amount & Terms Preliminary Economic Assessment (PEA) $100,000 Feasibility Study (FS) $250,000 Commercial Production $500,000 The agreement remains subject to the approval of the TSX Venture Exchange. • On July 15, 2026, 385,000 stock options were exercised for total gross proceeds to the Company of $39,300. • On July 10 , 2026 the Company granted 2,300,000 stock options with an exercise price of $0.50 that are exercisable 10 years from the date of grant. • Subsequent to May 31, 2026, warrants were exercised for total gross proceeds to the Company of $45,000.