Financial statements
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LEADING EDGE MATERIALS CORP. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 (Expressed in Canadian Dollars)
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The accompanying notes are an integral part of these consolidated financial statements. 2 NOTICE OF NO AUDITOR REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS In accordance with National Instrument 51 -102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these condensed consolidated interim financial statements, they must be accompanied by a notice indicating that the condensed consolidated interim financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s auditors have not performed a review of these condensed consolidated interim financial statements in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.
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The accompanying notes are an integral part of these consolidated financial statements. 3 LEADING EDGE MATERIALS CORP. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian Dollars) Note July 31, 2026 $ October 31, 2025 $ ASSETS Current assets Cash 1,841,047 1,860,654 GST/VAT receivables 155,546 244,939 Prepaid expenses 187,845 142,811 Investments 3 - 29,167 Total current assets 2,184,438 2,277,571 Non-current assets Exploration and evaluation assets 4 23,893,521 22,382,097 Property, plant and equipment 5 5,078,476 5,616,789 Reclamation deposit 6 162,009 162,696 Right-of-use asset 5 20,391 29,536 Total non-current assets 29,154,397 28,191,118 TOTAL ASSETS 31,338,835 30,468,689 LIABILITIES Current liabilities Accounts payable and accrued liabilities 447,231 384,380 Lease liability 13,206 12,755 Total Current liabilities 460,437 397,135 Non-current liabilities Provision for site restoration 6 5,035,357 5,444,696 Property acquisition obligation 4(a), 5 587,174 593,392 Lease liability 9,237 18,764 Total non-current liabilities 5,631,768 6,056,852 TOTAL LIABILITIES 6,092,205 6,453,987 SHAREHOLDERS’ EQUITY Share capital 7 69,581,633 66,659,743 Share-based payments reserve 7(d) 11,220,004 9,924,182 Deficit (55,555,007) (52,569,223) TOTAL SHAREHOLDERS’ EQUITY 25,246,630 24,014,702 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 31,338,835 30,468,689 Nature of Operations and Going Concern - Note 1 These consolidated financial statements were approved for issue by the Board of Directors on September 18, 2026 and are signed on its behalf by: /s/Eric Krafft /s/Daniel Major Eric Krafft Daniel Major Director Director
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The accompanying notes are an integral part of these consolidated financial statements. 4 LEADING EDGE MATERIALS CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Expressed in Canadian Dollars) Three Months Ended Nine Months Ended July 31, July 31, Notes 2026 2025 2026 2025 $ $ $ $ Expenses Accretion of provision for site restoration 6 33,184 32,218 99,552 96,654 Corporate development 25,591 47,212 93,102 157,718 Depreciation 14,437 22,451 71,747 47,018 Directors and officer's compensation 8(a) 74,169 74,099 221,379 229,878 Research, development and general exploration 4 46,198 10,526 140,345 150,483 Accounting and audit 8(b) 40,945 44,370 134,791 156,607 General and administration 23,542 41,957 97,370 99,810 Listing and regulatory costs 41,401 43,093 168,766 150,032 Operations 71,779 73,938 262,257 212,814 Salaries, compensation and benefits 59,318 43,222 164,218 122,442 Professional fees 46,632 10,588 151,330 21,444 Share based compensation 8(a) 285,658 208,322 1,295,822 923,143 Travel 35,849 45,625 70,858 96,017 798,703 697,621 2,971,537 2,464,060 Loss before other items (798,703) (697,621) (2,971,537) (2,464,060) Other items Interest income 1,571 5,637 10,937 43,399 Foreign exchange gain/(loss) (85,128) 80,335 (48,076) (35,038) Mark to market adjustment loss - - - (6,632) Gain on sale of investment - - (3,311) - Other Income 21 342 26,203 2,640 (83,536) 86,314 (14,247) 4,369 Net loss and comprehensive loss (882,239) (611,307) (2,985,784) (2,459,691) Loss per share – basic and diluted ($0.00) ($0.00) ($0.01) ($0.01) Weighted average number of common shares outstanding - basic and diluted 257,977,906 232,979,449 254,062,779 232,404,660
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The accompanying notes are an integral part of these consolidated financial statements. 5 LEADING EDGE MATERIALS CORP. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Expressed in Canadian Dollars) Nine Months Ended July 31, 2026 Share Capital Number of Shares Amount $ Share- Based Payments Reserve $ Deficit $ Total Equity $ Balance as at October 31, 2025 250,550,449 66,659,743 9,924,182 (52,569,223) 24,014,702 Common shares issued for: Share issued 7,132,020 1,782,990 - - 1,782,990 Stock options Exercised 6,980,000 888,900 - - 888,900 Warrants Exercised 1,250,000 250,000 - - 250,000 Share-based compensation - - 1,295,822 - 1,295,822 Net loss for the period - - - (2,985,784) (2,985,784) Balance at July 31, 2026 265,912,469 69,581,633 11,220,004 (55,555,007) 25,246,630 Nine Months Ended July 31, 2025 Share Capital Number of Shares Amount $ Share- Based Payments Reserve $ Deficit $ Total Equity $ Balance at October 31, 2024 232,061,949 63,697,686 8,792,714 (49,352,658) 23,137,742 Common shares issued for: Shares issued 3,552,500 568,400 - - 568,400 Warrants Exercised 150,000 30,000 - - 30,000 Share-based compensation - - 923,143 - 923,143 Net loss for the period - - - (2,459,691) (2,459,691) Balance at July 31, 2025 235,764,449 64,296,086 9,715,857 (51,812,349) 22,199,594
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The accompanying notes are an integral part of these consolidated financial statements. 6 LEADING EDGE MATERIALS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian Dollars) Three Months Ended July 31, Nine Months Ended July 31, 2026 $ 2025 $ 2026 $ 2025 $ Operating activities Net loss for the period (882,239) (611,307) (2,985,784) (2,459,691) Adjustments for: Accretion of provision for site restoration 33,184 32,218 99,552 96,654 Depreciation and amortization 14,437 22,451 71,747 47,018 Foreign exchange (1,855) (4,717) (5,532) 37,965 Mark to market adjustment loss - - - 6,632 Gain/loss on sale of Investment - - 3,311 - Share based compensation 285,658 208,322 1,295,822 923,143 Changes in non-cash working capital items: GST/VAT and other receivables (14,556) (77,398) 89,393 116,315 Prepaid expenses and other (38,673) 21,559 (45,034) 42,448 Accounts payable and accrued liabilities 155,638 179,130 62,851 (67,328) Net cash from (used in) operating activities (448,406) (229,742) (1,413,674) (1,256,844) Investing activity Expenditures on exploration and evaluation assets (394,237) (698,817) (1,511,424) (1,828,331) Proceeds from sale of investment - - 25,826 - Additions to property, plant and equipment - (28,369) (33,180) (73,149) Net cash from (used in) investing activity (394,237) (727,186) (1,518,748) (1,901,480) Financing activities Issuance of common shares 2,132,990 568,400 2,921,890 598,400 Repayment of lease liabilities (3,100) - (9,075) - Net cash provided by financing activities 2,129,890 568,400 2,912,815 598,400 Net change in cash 1,287,247 (388,528) (19,607) (2,559,924) Cash at beginning of the period 553,800 1,288,821 1,860,654 3,460,217 Cash at end of the period 1,841,047 900,293 1,841,047 900,293 Supplemental cash flow information - See Note 11
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 7 1. Nature of Operations and Going Concern The Company is a Canadian public companyprimarily focused on developing a portfolio of critical raw material projects located in the European Union. The portfolio of projects includes the 100% owned Woxna Graphite mine (Sweden), the 100% owned Norra Kärr Heavy Rare Earths Elements (“HREE”) project (Sweden) and the 90% owned Bihor Sud Nickel Cobalt exploration alliance (Romania). The Company’s common shares trade on the TSX Venture Exchange (the “TSXV”) under the symbol “LEM”, on the OTCQB under the symbol “LEMIF”, on NASDAQ First North under the symbol “LEMSE” and in Frankfurt under the symbol “7FL”. The Company’s principal office is located at 14th Floor 1040 West Georgia Street, Vancouver, BC Canada V6E 4H1. During the nine months ended July 31, 2026, the Company recorded a net loss of $2,985,784 and, as at July 31, 2026, the Company had an accumulated deficit of $55,555,007 and working capital of $1,724,001. On 12 July 2026, the Company announced a non-brokered private placement of up to 24,000,000 units at C$0.25 per unit for gross proceeds of up to C$6,000,000, with the Company's cornerstone shareholder, Eric Krafft, agreeing to subscribe for any units not o therwise taken up. Net proceeds are intended to fund Pre -Feasibility Study workstreams and environmental permitting at Norra Kärr, studies related to a possible restart of the Woxna Graphite mine and processing plant, and general working capital. Subsequent to the quarter end, on 18 August 2026 the Company closed the first tranche of this financing, issuing 16,032,000 common shares for gross proceeds of C$4,008,000. The Company has received approval from the TSX Venture Exchange to extend the closing of the Private Placement. The Company now expects to close the Private Placement on or before September 25, 2026, subject to the receipt of all required regulatory approvals. The terms of the Private Placement remain unchanged from those previously announced. Net proceeds from the recent equity raise are intended to fund Pre -Feasibility Study (PFS) workstreams and environmental permitting at Norra Kärr, studies related to a possible restart of the Woxna Graphite mine and processing plant, and general working capital for next twelve months. However, it will need additional capital to recommence operations at the Woxna Graphite Mine and/or modernize the plant to produce value added production and to fund future development of the Norra Kärr Property. There is no assurance such additional capital will be available to the Company on acceptable terms or at all. These consolidated financial statements are prepared in accordance with IFRS Accounting Standards (“IFRS”) appropriate for a going concern. The going concern basis of accounting assumes the Company will continue to realize the value of its assets and disch arge its liabilities and other obligations in the ordinary course of business. Should the Company be required to realize the value of its assets in other than the ordinary course of business, the net realizable value of its assets may be materially less than the amounts shown in the consolidated financial statements. These consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that may be necessary should the Company be unable to repay its liabilities and meet its other obligations in the ordinary course of business or continue operations.
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 8 2. Basis of Preparation Statement of Compliance These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). Basis of Measurement The Company’s consolidated financial statements have been prepared on the historical cost basis except for the revaluation of certain financial assets and financial liabilities to fair value. The consolidated financial statements are presented in Canadian dollars unless otherwise noted. Details of the Group In addition to the Company, the consolidated financial statements include all subsidiaries. Subsidiaries are all entities over which the Company is able, directly or indirectly, to control financial and operating policies, which is the authority usually connected with holding majority voting rights. Subsidiaries are fully consolidated from the date on which control is acquired by the Company. Inter-company transactions and balances are eliminated upon consolidation. They are deconsolidated from the date that control by the Company ceases. The subsidiaries of the Company are as follows: Company Location of Incorporation Ownership Interest Flinders Holdings Limited (“Flinders Holdings”) British Columbia 100% Woxna Graphite AB (“Woxna”) Sweden 100% Tasman Metals Ltd. British Columbia 100% GREENNA Mineral AB (Formerly “Tasman Metals AB”) Sweden 100% LEM Resources SRL (“LEM Romania”) (See Note 14) Romania 51%
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 9 3. Investments Investments held by the Company are as follows: Particulars July 31, 2026 $ October 31, 2025 $ Shares in United Lithium Corp. (ULTH) (2025: 91,147) - 29,167 Total - 29,167 The investment in United Lithium Corp was revalued with level 1 input at each reporting date. 4. Exploration and Evaluation Assets As at July 31, 2026 As at October 31, 2025 Acquisition Costs $ Deferred Exploration Costs $ Total $ Acquisition Costs $ Deferred Exploration Costs $ Total $ Graphite Concessions 10,081 4,706 14,787 10,081 4,706 14,787 Norra Kärr 15,402,622 3,665,160 19,067,782 15,402,622 2,843,862 18,246,484 Romania 187,999 4,662,954 4,810,952 187,999 3,932,827 4,120,826 15,600,702 8,292,819 23,893,521 15,600,702 6,781,395 22,382,097 Graphite concessions $ Norra Karr $ Romania $ Total $ Balance at October 31, 2024 14,787 17,334,704 2,542,761 19,892,252 Costs Additions during the year - 911,780 1,578,065 2,489,845 Balance at October 31, 2025 14,787 18,246,484 4,120,826 22,382,097 Costs Additions during the year - 821,298 690,126 1,511,424 Balance at July 31, 2026 14,787 19,067,782 4,810,952 23,893,521
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 10 4. Exploration and Evaluation Assets (continued) (a) Graphite Concessions Through Woxna, the Company holds a 100% interest in the Woxna Graphite Mine and the Kringelgruvan concession. The Woxna Graphite Mine is in Ovanaker Municipality, Gavleborg County, central Sweden. In 1993 Woxna entered into agreements under which it acquired: (i) the Kringelgruvan concession for an initial payment of SEK 150,000 and a further payment of SEK 4,000,000 (the “Property Acquisition Obligation”); and (ii) the Mattsmyra, Gropabo and Mansberg concessions (the “Graphite Concessions”) for an initial payment of SEK 32,500 and a further payment of SEK 1,000,000 on each of the three concessions (the “Additional Consideration”). These concessions have all expired. During fiscal 2014 the technical feasibility and commercial viability of the Kringelgruvan concession and the Woxna Graphite Mine was demonstrated, transitioning the Kringelgruvan concession to the development stage of mining. Accordingly, the costs of the exploration and evaluation assets attributed to the Kringelgruvan concession and the Woxna Graphite Mine were reclassified to property, plant and equipment. See also Note 6. (b) Norra Kärr On 28 June 2026, the Swedish Government granted GREENNA Mineral AB, an Exploitation Concession (Sw. bearbetningskoncession), 25-year mining lease for Norra Kärr K Nr. 2. This followed the March 2026 recommendation of the Mining Inspectorate and the Decembe r 2025 endorsements of the County Administrative Boards of Jönköping and Östergötland, and represents a significant permitting milestone in the project’'s development. (c) Romania Exploration Alliance In fiscal 2017 the Company and REMAT Group Management SRL (“REMAT”) agreed to pursue the investigation and initiation of a prospecting permit application over the Bihor Sud perimeter in Romania. REMAT proceeded to incorporate LEM Resources SRL (“LEM Romania ”) in fiscal 2017. LEM Romania successfully applied for a non -exclusive prospecting permit (the “Permit”) over 25.5 square kilometers in the Bihor area (the “Project”). On August 9, 2018, the Company and REMAT completed a share purchase agreement (the “Sha re Purchase Agreement”) and executed a shareholders’ joint venture agreement (the “JV Agreement”) whereby the Company acquired an initial 51% ownership interest (the “Initial Interest”) in LEM Romania, by issuing 367,006 common shares of the Company at a fair value of $165,152. As LEM Romania had no assets or liabilities at the time of acquisition of the initial interest, the Company recorded the initial consideration as general exploration expenses. A finder’s fee of 5% (the “Finder’s Fee”) related to the Project will be paid in stages. Under the JV Agreement the Company has agreed to issue to REMAT certain amounts of shares in the Company upon different milestones being achieved (the “Bonus Shares”) as per below; (i) 550,509 shares upon the signing of an exploration license; (Issued on May 27,2022) (ii) A maximum of 3,670,062 shares upon identification of any historic Ni -Co and/or Ag -base metal mineral resource estimates at various tonnage thresholds. (iii) 734,012 shares upon the filing of a NI 43 -101 technical report that establishes a mineral resource on any portion of the Project, with an additional maximum 4,404,072 shares subject to such Ni -Co and/or Ag -base metal mineral resource meeting various tonnag e thresholds; and (iv) 917,515 shares upon the filing of a Feasibility Study technical report. During the quarter the Company announced it had agreed to increase its stake in the Bihor Sud Exploration Licence joint venture to 90%, following an amendment to the shareholders joint venture agreement originally entered into with REMAT Group Management SRL on August 9, 20 18.
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 11 4. Exploration and Evaluation Assets (continued) On May 17, 2022, the company signed the Bihor Sud Exploration License between LEM Romania and the National Agency for Mineral Resources, accordingly exploration and evaluation costs for the project will now be capitalized. On May 27, 2022, the company issued 550,509 shares to REMAT at a fair value of $178,916 and issued 27,525 common shares at a fair value of $9,083 as Finder’s Fee, this consideration is capitalized as acquisition cost for LEM Romania. Under the provisions of the Romanian mining legislation, the Company is required to submit an annual technical/scientific report and exploration budget for the upcoming year to the Romanian Mining Authority. The Company did not make the required submission during the fiscal year as the Company is awaiting government clearance to submit the documents. As a result, the Romanian Mining Authority has the right to revoke the concession at its discretion. Management does not expect this matter to have an adverse impact on the exploration license and i s working with the Romanian Mining Authority to submit the required documents. Management has also considered this matter in its assessment of impairment indicators and determined no impairment was required. See Note 13. 5. Property, Plant and Equipment Cost: Vehicles $ Equipment and Tools $ Building $ Manufacturi ng and Processing Facility $ Mineral Property Acquisition and Developme nt Costs $ Right Of Use Asset $ Total $ Balance at October 31, 2024 16,094 443,116 344,139 7,567,878 6,484,182 - 14,855,409 Addition - 40,561 - - - 42,613 83,174 Adjustment to site restoration - - - - 194,449 - 194,449 Balance at October 31, 2025 16,094 483,677 344,139 7,567,878 6,678,631 42,613 15,133,032 Addition - 33,180 - - - - 33,180 Adjustment to site restoration - - - - (508,891) - (508,891) Balance at July 31, 2026 16,094 516,857 344,139 7,567,878 6,169,740 42,613 14,657,322 Accumulated Depreciation and Impairment: Balance at October 31, 2024 (6,174) (268,414) (217,514) (3,910,218) (5,000,000) - (9,402,320) Depreciation (2,266) (35,254) (33,790) - - (13,077) (84,387) Balance at October 31, 2025 (8,440) (303,668) (251,304) (3,910,218) (5,000,000) (13,077) (9,486,707) Depreciation (1,989) (30,950) (29,664) - - (9,145) (71,747) Balance at July 31, 2026 (10,429) (334,618) (280,968) (3,910,218) (5,000,000) (22,222) (9,558,455) Carrying Value : Balance at October 31, 2025 7,654 180,009 92,835 3,657,660 1,678,631 29,536 5,646,325 Balance at July 31, 2026 5,665 182,239 63,171 3,657,660 1,169,740 20,391 5,098,867
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 12 5. Property, Plant and Equipment (continued) During fiscal 2014 technical feasibility and commercial viability of the extraction of mineral resources at the Woxna Graphite Mine was demonstrated, transitioning the Company to the development stage of mining. Upon the transition, costs on the exploration and evaluation assets attributed to the mine were reclassified to property, plant and equipment. On August 1, 2015, the refurbishment and commissioning of the Woxna Graphite Mine was completed. During fiscal 2019 management assessed whether there were any indications of impairment of the Company’s property, plant and equipment as required by IAS 36. In light of the continued suspension of the operations of the Woxna Graphite Mine, large net loss and the low trading value of the Company’s common shares, management concluded there were indications of impairment. When indications of impairment are determined to be present, IAS 36 requires the Company to estimate the recoverable amount of the Company’s property, plant and equipment. The Company d id not have sufficient verifiable information to prepare adequately detailed and meaningful calculations of fair value less costs of disposal or value in use. Therefore, the Company applied a value in use method that t ook into account the Company’s financial position and results of operations and operational issues among other factors in determining an estimated recoverable amount . This method indicated that an impairment provision of $8,800,000 was appropriate in fiscal 2019. As at July 31 , 202 6 the Company has recognized $ 587,174 (October 31, 202 5 - $593,392) for the Property Acquisition Obligation associated with the Kringelgruvan concession, as described in Note 5(a)(i). 6. Provision for Site Restoration Although the ultimate amount of the decommissioning obligation for the Kringelgruvan concession is uncertain, the fair value of this obligation is based on information currently available. Significant closure activities include land rehabilitation, demolition of buildings and mine facilities and other costs. The provision for site restoration may be subject to change based on management’s current estimates, changes in remediation technology or changes to the applicable laws and regulations. The total undiscounted amount of estimated cash flows to settle the Company’s risk adjusted estimated obligation is SEK 40,000,000 and is expected to be incurred in 2041. The fair value of the decommissioning obligation was calculated using a discounted cash flow approach based on a risk -free rate of 3.03% (2025 – 2.55%) and an inflation factor of 2.0% (202 5 – 2.0%) Settlement of the obligation is expected to be funded from general corporate funds at the time of decommissioning. Changes to the decommissioning obligation were as follows: $ Balance at October 31, 2024 5,121,374 Accretion 128,872 Revision of estimates (522,979) Foreign exchange adjustment 717,428 Balance at October 31, 2025 5,444,696 Accretion 99,552 Revision of estimates (451,841) Foreign exchange adjustment (57,050) Balance at July 31, 2026 5,035,357 As at July 31, 2026 reclamation deposits totaling $162,009 (October 31, 202 5 - $162,696) have been paid. The reclamation deposits were placed as security for site restoration on the Kringelgruvan concession and on certain exploration and evaluation assets.
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 13 7. Share Capital (a) Authorized Share Capital The Company’s authorized share capital consists of an unlimited number of common shares without par value. All issued common shares are fully paid. (b) Equity Financings Nine months Ended July 31, 2026 During the nine months ended July 31, 2026, 6,980,000 stock options were exercised for gross proceeds of $888,000 and 1,250,000 warrants were exercised for gross proceeds of $250,000. Year Ended October 31, 2025 During the year ended October 31, 202 5, 750,000 warrants were exercised for gross proceeds of $152,500. On 15th August 2025, the Company has closed the non-brokered private placement, issuing 17,738,500 units (the “Units”) at a price of C$0.16 per Unit for aggregate gross proceeds of C$2,838,160. Each unit consisted of one common share and one common share purchase warrant. Each warrant is exercisable by the holder to acquire one common share at an exercise price of $0.32 per share, expiring August 14, 2029. (c) Warrants A summary of the number of common shares reserved pursuant to the Company’s outstanding warrants at July 31, 2026 and October 31, 2025, and the changes for the periods ended on those dates is as follows: 2026 2025 Number Weighted Average Exercise Price $ Number Weighted Average Exercise Price $ Balance beginning of year 79,837,630 0.20 62,856,130 0.17 Issued - - 17,738,500 0.32 Exercised (1,250,000) 0.20 (750,000) 0.20 Expired - - (7,000) 0.225 Balance end of year 78,587,630 0.20 79,837,630 0.20 The following table summarizes information about the number of common shares reserved pursuant to the Company’s warrants outstanding and exercisable at July 31, 2026: Number Exercise Price $ Expiry Date 21,639,130 0.225 August 23, 2027 32,650,000 0.20 July 23, 2028 6,560,000 0.20 September 26, 2028 17,738,500 0.32 August 14, 2029 78,587,630 0.20
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 14 7. Share Capital (continued) (d) Share Option Plan The Company has established a rolling share option plan (the “Plan”), in which the maximum number of common shares which can be reserved for issuance under the Plan is 10% of the issued and outstanding shares of the Company. The minimum exercise price of the options is set at the Company’s closing share price on the day before the grant date, less allowable discounts. Options granted may be subject to vesting provisions as determined by the Board of Directors and have a maximum term of up to five years. Nine months Ended July 31, 2026 During the nine months ended July 31, 2026, 6,980,000 stock options were exercised for gross proceeds of $888,000. 7,200,000 stock options were granted at an exercise price of $0.31 during the nine months ended July 31, 2026 (2025 – 6,700,000). The value of options granted was determined using the Black -Scholes option pricing model. A weighted average grant date fair value of $0. 25211 (2025 – $0.20253) was calculated using expected stock price volatility of 114.13%, risk free rate of 3.11% and option life of five years are based on the Company’s historical share price volatility and option life. Year Ended October 31, 2025 6,700,000 stock options were granted at an exercise price of $0.24 during the year ended October 31, 2025 (2024 – 9,200,000). The value of options granted was determined using the Black-Scholes option pricing model. A weighted average grant date fair value of $0. 20253 (2024 – $0.08075) was calculated using expected stock price volatility of 112.55%, risk free rate of 2.84% and option life of five years are based on the Company’s historical share price volatility and option life. 150,000 stock options were granted at an exercise price of $0. 24 during the year ended October 31, 2025 (2024 – 450,000). The value of options granted was determined using the Black -Scholes option pricing model. A weighted average grant date fair value of $ 0.17061 (2024 – $0.06191) was calculated using expected stock price volatility of 110.75%, risk free rate of 2.65% and option life of three years are based on the Company’s historical share price volatility and option life. Option-pricing models require the use of estimates and assumptions including the expected volatility. Changes in the underlying assumptions can materially affect the fair value estimates and, therefore, existing models do not necessarily provide reliable measure of the fair value of the Company’s share options. A summary of the Company’s share options at July 31, 2026 and October 31, 2025 and the changes for the year ended on those dates is as follows: 2026 2025 Number of Options Outstanding Weighted Average Exercise Price $ Number of Options Outstanding Weighted Average Exercise Price $ Balance beginning of year 21,900,000 0.17 18,250,000 0.22 Issued 7,200,000 0.31 6,850,000 0.24 Exercised (6,980,000) 0.13 Expired - - (3,200,000) 0.62 Balance end of period 22,120,000 0.23 21,900,000 0.17
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 15 7. Share Capital (continued) The following table summarizes information about the share options outstanding and exercisable at July 31, 2026: Number Outstanding Number Exercisable Exercise Price $ Expiry Date 700,000 700,000 0.20 November 3, 2027 2,700,000 2,700,000 0.195 April 26, 2028 450,000 450,000 0.10 April 26, 2027 4,220,000 4,220,000 0.10 April 25, 2029 6,700,000 4,422,000 0.24 April 23, 2030 150,000 99,000 0.24 April 23, 2028 7,200,000 2,376,000 0.31 April 27, 2031 22,120,000 15,967,000 8. Related Party Disclosures Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of members of the Company’s Board of Directors and its executive officers. (a) During the nine months ended July 31, 2026 and 2025 the following compensation was incurred: Particulars Three months Ended July 31, Nine months Ended July 31, 2026 $ 2025 $ 2026 $ 2025 $ Directors and officer’s compensation 138,269 137,576 411,794 408,250 Share based compensation (current and former) 284,571 201,977 1,285,969 891,033 422,840 339,553 1,697,793 1,299,283 As at July 31, 2026, $8,866 (October 31, 202 5 - $ 7,798) remained unpaid and has been included in accounts payable and accrued liabilities. Out of the total Directors’ and Officers' compensation of $ 411,794, CEO’s compensation of $ 190,415 has been capitalized to Exploration and Evaluation assets. 9. Income per share As at July 31, 2026 and 2025, the weighted average number of common shares for the purpose of calculating diluted income per share reconciles to the weighted average number of common shares used in the calculation of basic income per share as follows: Particulars Three months ended July 31, Nine months ended July 31, 2026 $ 2025 $ 2026 $ 2025 $ Net loss for the period (882,239) (611,307) (2,985,784) (2,459,691) Basic weighted average number of shares outstanding 265,912,469 232,979,449 254,062,779 232,404,660 Diluted weighted average number of shares outstanding 265,912,469 232,979,449 254,062,779 232,404,660 Loss per share – basic and diluted ($0.00) ($0.00) ($0.01) ($0.01)
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 16 10. Financial Instruments and Risk Management Categories of Financial Assets and Financial Liabilities Financial instruments are classified into one of the following categories: fair value through profit or loss (“FVTPL”); amortized cost; fair value through other comprehensive income (“FVOCI”). The carrying values of the Company’s financial instruments are classified into the following categories: Financial Instrument Category July 31, 2026 $ October 31, 2025 $ Cash FVTPL 1,841,047 1,860,654 Reclamation deposit amortized cost 162,009 162,696 Investments FVTPL - 29,167 Accounts payable and accrued liabilities amortized cost (447,231) (384,380) Property acquisition obligation amortized cost (587,174) (593,392) The Company’s financial instruments recorded at fair value require disclosure about how the fair value was determined based on significant levels of inputs described in the following hierarchy: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date . Active markets are those in which transactions occur in sufficient frequency and value to provide pricing information on an ongoing basis. Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable as of the reporting date. Level 2 valuations are based on inputs including quoted forward prices for commoditi es, time value and volatility factors, which can be substantially observed or corroborated in the marketplace. Level 3 - Valuations in this level are those with inputs for the asset or liability that are not based on observable market data. The recorded amounts for amounts receivable and accounts payable and accrued liabilities approximate their fair value due to their short term nature. The recorded amounts for the reclamation deposit , investments and property acquisition obligation approximates their fair value. The Company’s fair value of cash under the fair value hierarchy is measured using Level 1. The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below: Credit Risk Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The Company’s credit risk is primarily attributable to cash, amounts receivable and reclamation deposit. Management believes that the credit risk concentration with respect to financial instruments included in cash, amounts receivable and reclamation deposit is remote. Liquidity Risk Liquidity risk is the risk that the Company will not have the resources to meet its obligations as they fall due. The Company manages this risk by closely monitoring cash forecasts and managing resources to ensure that it will have sufficient liquidity to meet its obligations. The following table is based on the contractual maturity dates of financial assets and liabi lities and the earliest date on which the Company can be required to settle financial liabilities.
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 17 10. Financial Instruments and Risk Management (continued) Contractual Maturity Analysis at July 31, 2026 Carrying Amount $ Contractual Cash Flows $ Less than 3 Months $ 1 - 5 Years $ Over 5 Years $ Cash 1,841,047 1,841,047 1,841,047 - - Reclamation deposit 162,009 162,009 - - 162,009 Accounts payable and accrued liabilities (447,231) (447,231) (447,231) - - - Property acquisition obligation (587,174) (587,174) - (587,174) - Market Risk Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. These fluctuations may be significant. Interest Rate Risk The Company is exposed to interest rate risk to the extent that the cash bear floating rates of interest. The interest rate risk on cash and on the Company’s obligations are not considered significant. Foreign Currency Risk The Company’s functional currency is the Canadian Dollar and major transactions are transacted in Canadian Dollars, Swedish Krona (“SEK”) and Romanian Leu (“RON). The Company maintains SEK bank accounts in Sweden and RON bank balances in Romania to support the cash needs of its foreign operations. Management believes the foreign exchange risk related to currency conversions is minimal and therefore does not hedge its foreign exchange risk. At July 31, 2026, 1 Canadian Dollar was equal to 6.8123 SEK as per Swedish Central Bank and 1 Canadian Dollar was equal to 3.2422 RON as per Romania Bank. Balances are as follows: SEK CDN $ Equivalent RON CDN $ Equivalent Cash 1,194,848 175,396 228,684 70,533 VAT receivable 289,393 42,481 351,542 108,426 Reclamation deposit 749,413 110,009 - - Accounts payable and accrued liabilities (1,662,267) (244,010) (399,877) (123,334) Property acquisition obligation (4,000,000) (587,174) - - (3,428,613) (503,298 180,349 55,625 Based on the net exposures as of July 31, 2026 and assuming that all other variables remain constant, a 10% fluctuation of the Canadian Dollar against the SEK and RON would result in the Company’s net impact being approximately respectively $50,330 and $5,536 higher or lower. Capital Management The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain development of the business. The Company defines capital that it manages as share capital and cash. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 18 11. Supplemental Cash Flow Information During the nine months ended July 31, 2026 and 2025 non-cash activities were conducted by the Company as follows: 2026 $ 2025 $ Operating activity Provision for site restoration (508,891) 1,020,824 Investing activity Revisions of estimates on property, plant and equipment 508,891 (1,020,824) 12. Segmented Information The Company is involved in the exploration and development of resource properties in Sweden with corporate operations in Canada and accordingly, has no reportable segment revenues or operating results. The Company’s total assets are segmented geographically as follows: As at July 31, 2026 Corporate Canada $ Mineral Operations Sweden $ Mineral Operations Romania $ Total $ Current assets 1,672,247 252,210 261,981 2,184,438 Exploration and evaluation assets - 19,082,569 4,810,952 23,893,521 Property, plant and equipment - 4,941,062 137,414 5,078,476 Reclamation deposit - 162,009 - 162,009 Right-of-use asset - - 20,391 20,391 1,672,247 24,435,850 5,230,738 31,338,835 As at October 31, 2025 Corporate Canada $ Mineral Operations Sweden $ Mineral Operations Romania $ Total $ Current assets 1,609,534 183,891 484,146 2,277,571 Exploration and evaluation assets - 18,261,271 4,120,826 22,382,097 Property, plant and equipment - 5,442,493 174,296 5,616,789 Reclamation deposit - 162,696 - 162,696 Right-of-use asset - - 29,536 29,536 1,609,534 24,050,351 4,808,804 30,468,689
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LEADING EDGE MATERIALS CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 2026 AND 2025 (Expressed in Canadian Dollars) 19 13. Commitments In Romania, for exploration licenses applied through the public bid process, an investment offer is presented for each exploration license, the offer of which represents the total amounts required to be spent in order to maintain possession of the concession area at the end of the five-year investment period. Accordingly, should the Company wish to retain possession of the exploration license in Romania it holds as at July 31, 2026, the Company’s expenditure commitment for the five-year period ending May 15, 2027 was budgeted as $6,484,813 Euros (approx. $9,532,675 CAD) of which $4,810,952 CAD has been spent as at July 31 , 202 6. The Company is in discussions with the relevant authorities in Romania to change categories of work e.g. underground channel sampling for drilling . The proposal will generate the same volume of geological data and is intended to meet the same exploration objectives. It will also reduce expenditure. 14. Events after the Reporting Period • On August 18, 2026, Company had closed a first tranche of the private placement announced previously on July 12, 2026, issuing 16,032,000 common shares at a price of $0.25/share for gross proceeds of CAD$4,008,000. The Company's cornerstone shareholder, Mr Eric Krafft, has agreed to subscribe for any Units not otherwise purchased by investors under the private placement.