Financial statements
Page 1
NU E POWER CORP. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Six Months Ended June 30, 2026 (Unaudited – Prepared by Management) (EXPRESSED IN CANADIAN DOLLARS)
Page 2
1 MANAGEMENT’S RESPONSIBILITY FOR INTERIM FINANCIAL REPORT The accompanying unaudited interim condensed consolidated financial report of NU E Power Corp. (the “Company”) has been prepared by and is the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of this financial report.
Page 3
2 NU E POWER CORP. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited – Prepared by Management) (Expressed in Canadian dollars) Note June 30, 2026 December 31, 2025 ASSETS Current assets Cash $ 13,602 $ 755,384 Receivables 6 466,848 164,741 Prepaid expenses and deposits 7 180,121 167,480 Inventory 8 - 513,059 660,571 1,600,664 Non-current assets Loan receivable 10 176,814 176,814 Equipment 12 5,745 31,775 Right-of-use assets 11 33,633 344,043 Intangible assets 13 1,399,455 2,114,174 Total assets $ 2,276,218 $ 4,267,470 LIABILITIES AND EQUITY (DEFICIENCY) Current liabilities Trade and other payables 14 $ 2,461,571 $ 2,725,149 Customer deposits 15 - 611,902 Loans payable to related parties 16 83,780 - Loans and borrowings 17 299,545 660,714 Lease liabilities 11 25,883 82,746 2,870,779 4,080,511 Non-current liabilities Lease liabilities 11 12,661 267,328 Total liabilities 2,883,440 4,347,839 Equity (deficiency) Share capital 18 16,082,517 19,943,498 Reserves 3,555,435 3,237,497 Deficit (20,245,174) (23,261,364) Total equity (deficiency) (607,222) (80,369) Total liabilities and equity (deficiency) $ 2,276,218 $ 4,267,470 Nature of operations and going concern (Note 1) Commitments and contingencies (Note 16, 25) Events after the reporting period (Note 27) APPROVED BY THE BOARD OF DIRECTORS ON AUGUST 28, 2026 AND SIGNED ON ITS BEHALF BY: “Broderick Gunning” Director “Eugene Hodgson” Director The accompanying notes are an integral part of these consolidated financial statements.
Page 4
3 NU E POWER CORP. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (Unaudited – Prepared by Management) (Expressed in Canadian dollars) Note Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Revenue 15 $ - $ - $ 611,902 $ - Cost of sales 8 - - (514,469) - Gross profit - - 97,433 - Expenses Accounting and audit 77,799 59,824 189,044 203,837 Consulting fees 84,294 23,011 138,644 62,011 Depreciation and amortization 11,12,13 374,745 9,302 741,058 18,606 Filing and transfer agent fees 15,789 4,498 22,979 19,908 Insurance 13,000 11,644 37,473 24,368 Investor relations 219,867 2,400 240,242 13,295 Legal fees 206,456 5,664 449,645 24,305 Management and director fees 16 197,406 79,000 371,162 240,500 Marketing and promotion 94,397 - 144,397 190,476 Office and miscellaneous 22,074 95,267 47,724 129,492 Rent 13,248 9,379 35,492 20,857 Share-based payments 19 29,550 10,142 103,794 7,692 Travel 58,695 - 95,380 1,776 (1,407,320) (310,131) (2,617,034) (957,123) Loss from operations (1,407,320) (310,131) (2,519,601) (957,123) Other income (expenses) Finance income (expense), net 20 (6,216) (21,329) (22,558) (21,044) Gain on loss of control of subsidiary 4 - - 5,558,349 - Income (loss) and comprehensive income (loss) for the period $ (1,413,536) $ (331,460) $ 3,016,190 $ (978,167) Basic and diluted earnings (loss) per common share $ (0.02) $ (0.01) $ 0.04 $ (0.03) Weighted average number of common shares outstanding 65,969,985 36,275,512 75,048,132 35,681,224 The accompanying notes are an integral part of these consolidated financial statements.
Page 5
4 NU E POWER CORP. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIENCY) (Unaudited – Prepared by Management) (Expressed in Canadian dollars) Note Number of Shares Share capital Reserves Deficit Total equity (deficiency) Balance, December 31, 2025 83,741,953 $ 19,943,498 $ 3,237,497 $ (23,261,364) $ (80,369) Private placements 18 9,837,433 988,525 191,967 - 1,180,492 Share issuance costs 18 - (118,096) 37,949 - (80,147) Shares issued on conversion of convertible debenture 18 1,890,599 283,590 (15,772) - 267,818 Shares returned and cancelled on rescission 4 (29,500,000) (5,015,000) - - (5,015,000) Share-based payments 19 - - 103,794 - 103,794 Income and comprehensive income for the period - - - 3,016,190 3,016,190 Balance, June 30, 2026 65,969,985 $ 16,082,517 $ 3,555,435 $ (20,245,174) $ (607,222) Note Number of Shares Share capital Reserves Deficit Total equity (deficiency) Balance, December 31, 2024 30,459,210 $ 10,612,913 $ 2,235,657 $ (14,813,874) $ (1,965,304) Private placements 18 2,633,331 562,000 228,000 - 790,000 Share issuance costs 18 - (9,475) - - (9,475) Exercise of warrants 18 143,000 73,430 (1,930) - 71,500 Shares issued for debt settlement 18 3,131,546 1,194,283 - - 1,194,283 Equity Component of Convertible debentures 17 - - 47,032 - 47,032 Share-based payments 19 - - 7,692 - 7,692 Loss and comprehensive loss for the period - - - (978,167) (978,167) Balance, June 30, 2025 36,367,087 $ 12,433,151 $ 2,516,451 $ (15,792,041) $ (842,439) The accompanying notes are an integral part of these consolidated financial statements.
Page 6
5 NU E POWER CORP. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) for the period $ 3,016,190 $ (978,167) Items not affecting cash: Depreciation and amortization 741,058 18,606 Foreign exchange gain - (9,900) Finance expense, net 22,558 1,078 Share-based payments 103,794 7,692 Gain on loss of control of subsidiary (5,558,349) - Changes in non-cash working capital items: Trade and other receivables (298,559) 113,588 Prepaid expenses and deposits (136,640) 21,172 Inventory 513,059 - Trade and other payables 808,511 (258,404) Customer deposits (611,902) - Net cash used in operating activities (1,400,280) (1,084,335) CASH FLOWS FROM INVESTING ACTIVITIES Cash lost on loss of control of subsidiary (120,904) - Intangible assets (250,000) - Loan receivable repayment - 3,642 Net cash provided by (used in) investing activities (370,904) 3,642 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of share capital 1,180,492 790,000 Share issuance costs (80,147) (9,475) Proceeds from exercise of warrants - 71,500 Proceeds from related party loans 83,780 - Proceeds from (repayment of) loans and borrowings (100,000) 205,255 Loan interest payment (25,000) - Lease payments (29,723) (14,350) Net cash provided by financing activities 1,029,402 1,042,930 Change in cash during the period (741,782) (37,763) Cash, beginning of the period 755,384 48,228 Cash, end of the period $ 13,602 $ 10,465 Supplemental cash flow information (Note 21) The accompanying notes are an integral part of these consolidated financial statements.
Page 7
6 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 1. NATURE OF OPERATIONS AND GOING CONCERN NU E Power Corp. (the “Company” or “NU E”) was incorporated on September 5, 2018, under the Business Corporations Act of British Columbia, Canada. The Company’s head office and principal address is Unit 240, 1209 – 59th Avenue SE, Calgary, Alberta, Canada, T2H 2P6. The Company’s registered and records office address is 250 Howe Street, 20th Floor, Vancouver, British Columbia, Canada, V6C 3R8. The Company’s common shares are listed on the Canadian Securities Exchange (“CSE”) under the symbol “NUE” and on the OTC Pink under the symbol “NUEPF”. The Company’s principal business activity is the acquisition and development of energy infrastructure projects, including site identification, land acquisition, regulatory and interconnection processes. The Company has interests in three solar power generation projects in Alberta at various stages of development, each held in separate special purpose vehicles “SPV(s)” owned by Low Carbon NU -Energy Corp. (“LC NU -Energy”), a joint venture. Additionally, the Company holds a 25% interest in Lethbridge One Solar Corp. (“LOSC”), which commenced power production at its Lethbridge One solar facility in Lethbridge, Alberta, in January 2025. Going concern of operations These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has incurred losses since inception and has not yet achieved profitable operations. The Company had a working capital deficiency of $ 2,210,208 and an accumulated deficit of $20,245,174 as at June 30 , 2026 . The Company’s ability to continue as a going concern is dependent on its ability to obtain adequate financing on reasonable terms from lenders, shareholders and other investors and/or to commence profitable operations in the future. While the Company has been successful in securing financing to date, there can be no assurances that it will be able to do so in the future. The aforementioned factors indicate the existence of a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include adjustments that would be required if the going concern assumption is not an appropriate basis for preparation of the financial statements. These adjustments could be material. 2. BASIS OF PREPARATION AND GOING CONCERN Statement of compliance These interim condensed consolidated financial statements of the Company have been prepared in accordance with IFRS Accounting Standards, applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34 Interim Financial Reporting. The condensed interim consolidated financial statements do not include all of the disclosures required for a complete set of annual financial statements and should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2025, which have been prepared in accordance with IFRS Accounting Standards .
Page 8
7 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 2. BASIS OF PREPARATION (cont’d…) Basis of measurement These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments that are measured at revalued amounts or fair values . In addition these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. Functional and presentation currency These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries. Basis of consolidation The consolidated financial statements include the accounts of the Company and entities controlled by the Company. The Company controls an entity when it is exposed to, or has the right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity . The Company consolidates all its wholly owned subsidiaries. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All intercompany balances, transactions and unrealized gains and losses from intercompany transactions are eliminated on consolidation . Details of the Company’s significant subsidiaries at June 30, 2026, are included below: Name of subsidiary Principal activity Location Percentage ownership NU E Corp. Solar power development Alberta, Canada 100% Northern DC Solar Inc. (“NDC”) No principal activity Alberta, Canada 100% Nu Fuel Corp. was dissolved on April 29, 2026. The acquisition of Blu Dot was unwound through a rescission on March 6, 2026 (Note 4). Significant estimates and assumptions The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the period. Actual results could differ from these estimates. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised. Significant areas requiring the use of management estimates include: i) the determination of the fair value of stock options and warrants using option pricing models, which require the input of highly subjective assumptions, including the expected price volatility; ii) the assessment of the Company’s incremental borrowing rate related to the recognition of lease liabilities ; iii) the determination of deferred income tax assets or liabilities, which requires subjective assumptions regarding future income tax rates and the likelihood of utilizing tax carry-forwards; and iv) the determination of the fair values of assets acquired and liabilities assumed in acquisitions.
Page 9
8 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 2. BASIS OF PREPARATION (cont’d…) Significant judgments The preparation of these consolidated financial statements requires management to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments applied in the Company’s financial statements include: i) judgments used in determining if an acquisition constitutes a business combination or asset acquisition and the related purchase price allocation; ii) valuation of options granted as share-based payments; iii) the classification of financial instruments; iv) the assessment of impairment of intangible assets; and v) the assessment of the Company’s ability to continue as a going concern, which involves judgment regarding future funding available for its operations and working capital requirements and whether there are events or conditions that may give rise to significant uncertainty 3. MATERIAL ACCOUNTING POLICIES The accounting policies set out in the Company’s annual audited consolidated financial statements for the year ended December 31, 2025 were consistently applied to all the periods presented unless otherwise noted below . New accounting standards There were no new or amended IFRS pronouncements effective January 1, 202 6, that impacted the Company’s consolidated financial statements. Accounting standards and amendments issued for adoption of future periods The IASB has issued the following new standards and amendments to existing standards that will become effective in future years: a) Amendments to IFRS 10 and IAS 28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture, addressing the conflict in dealing with the sale or contribution of assets between an investor and its associate or joint venture (deferred indefinitely with an option of early adoption). b) IFRS 18, Presentation and Disclosure in the Financial Statements, specifying the requirements for all entities applying IFRS for the presentation and disclosure of information in financial statements, would supersede IAS 1, “Presentation of Financial Statements” and increase the comparability of financial statements by enhancing principles on aggregation and disaggregation (effective for annual periods beginning on or after January 1, 2027). c) Amendments to IFRS 9 and IFRS 7, Classification and measurement of financial instruments, specifying how an entity should classify some financial assets, especially on the recognition of financial assets and liabilities when settled using electronic payments (effective for annual periods beginning on or after January 1, 2026). d) Annual Improvements to IFRS Accounting Standards - Volume 11, which includes clarifications and amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7. These amendments are effective for annual periods beginning on or after January 1, 2026, with early application permitted. The Company is assessing the impacts, the amendments will have on its consolidated financial statements.
Page 10
9 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 4. ACQUISITION AND SUBSEQUENT RESCISSION OF BLU DOT SYSTEMS INC. On October 10, 2025, the Company acquired 100% of the issued and outstanding common shares of Blu Dot Systems Inc. (“Blu Dot”) in exchange for 29,500,000 common shares of the Company. Blu Dot is a private company specializing in solar farm construction and maintenance . The objective of the transaction was intended to create operational synergies by enabling NU E to gain greater control over the construction aspects of its solar development projects. In addition, the transaction was intended to support NU E’s expansion into solar EPC operations and provide access to future growth opportunities and potential project pipeline value not captured in the identifiable assets acquired. The transaction is considered a related party transaction as the Company’s President, CEO, and director at the time of the transaction was also the President, a director and a significant shareholder of Blu Dot. Management determined that Blu Dot did not constitute a business as defined under IFRS 3, Business Combinations as the acquired set lacked the substantive processes necessary to convert inputs into outputs, and therefore, the acquisition was accounted for as an asset acquisition. The fair value of the consideration transferred was determined to be $5,310,000 based on the fair value of the shares issued at the acquisition date. The purchase consideration was allocated to the identifiable assets acquired and liabilities assumed based on their relative fair values at the acquisition date. Management determined that the carrying amounts of inventory, equipment, lease assets and lease liabilities approximated their fair values, considering the requirements of IAS 2 Inventories, IAS 16 Property, Plant and Equipment, and IFRS 16 Leases. As no identifiable intangible assets were identified that met the recognition criteria of IAS 38 Intangible Assets, and goodwill cannot be recognized in an asset acquisition, the excess of the consideration transferred over the fair value of the net liabilities assumed was recognized as an acquisition expense. The following table summarizes the allocation of the purchase price at the acquisition date . Cash $ 25,884 Trade and other receivables 412,504 Prepaids and deposits 169,373 Inventory 71,838 Property, plant and equipment 26,016 Right-of-use assets 315,470 Trade and other payables (895,925) Customer deposits (305,951) Lease liability (310,840) Net identifiable liabilities acquired $ (491,631) Purchase Price Allocation Net identifiable liabilities acquired $ (491,631) Unrecognizable intangible assets – acquisition expense 5,801,631 $ 5,310,000 On March 6, 2026, the Company and the former shareholders of Blu Dot mutually agreed to rescind the share exchange transaction. The rescission unwinds the acquisition and returns the parties to their respective positions prior to the transaction. Pursuant to the rescission agreement, the 29,500,000 common shares previously issued by the Company in connection with the acquisition were returned to the Company for cancellation. Effective March 6, 2026, the rescission resulted in the Company ceasing to control Blu Dot, and accordingly, Blu Dot ceased to be a subsidiary of the Company.
Page 11
10 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 4. ACQUISITION AND SUBSEQUENT RESCISSION OF BLU DOT SYSTEMS INC. (cont’d…) As a result of the rescission transaction, the Company lost control of Blu Dot and deconsolidated its assets and liabilities from the consolidated financial statements. The assets and liabilities of Blu Dot previously recognized in the consolidated financial statements were derecognized. The resulting gain, representing the difference between the fair value of the shares returned and cancelled and the carrying amount of the net liabilities derecognized, was recognized in the consolidated statements of income. The fair value of the shares returned and cancelled at the rescission date was determined to be $5,015,000 . The following table summarizes the assets and liabilities derecognized upon the loss of control of Blu Dot and the resulting gain. Fair value of shares returned and cancelled 29,500,000 common shares measured at a fair value of $0.17 per share $ 5,015,000 Assets and liabilities derecognized upon loss of control Cash $ 120,904 Trade and other receivables 6,297 Prepaids and deposits 123,999 Property, plant and equipment 24,264 Right-of-use assets 285,837 Trade and other payables (816,836) Lease liability (287,814) Net liabilities derecognized $ (543,349) Gain on loss of control of subsidiary $ 5,558,349 The Company's consolidated statements of income include the results of Blu Dot for the period from January 1, 2026 until March 6, 2026, the date on which the Company lost control of Blu Dot . Revenue $ 611,902 Cost of sales (514,469) Gross profit 97,433 Accounting 2,988 Depreciation and amortization 14,114 Insurance 1,284 Office and miscellaneous 7,603 Rent 7,879 (33,868) Income from operations 63,565 Finance expense (4,798) Net income for the period $ 58,767
Page 12
11 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 5. ACQUISITION OF DEVELOPMENT RIGHTS On November 21, 2025, the Company acquired the rights to certain renewable energy development opportunities from ACT Mid Market Ltd. (“ACT”) in consideration for $300,000 in cash, the issuance of 11,000,000 common shares of the Company, and 10,000,000 share purchase warrants. The acquired assets consist primarily of early -stage solar, hybrid power and data infrastructure development opportunities. The Company evaluated the acquisition in accordance with IFRS 3 Business Combinations. While an input (exclusive rights) was acquired, no substantive processes were in place that would enable the set to generate outputs. Accordingly, the acquired set does not meet the definition of a business, and the transaction has been accounted for as an asset acquisition. The fair value of the total consideration is $2,471,000. The Company valued the 11,000,000 common shares issued at a fair value of $1,595,000. The share purchase warrants were valued at $576,000 using the Black -Scholes option pricing model (assuming a risk -free interest rate of 2.55%, an expected life of 3 -years, annualized volatility of 80% and a dividend rate of 0%). The warrants have an exercise price $0.25 per share and are exercisable until November 21, 2028. The acquisition included interests in two development -stage power projects: the Darkhan project in Mongolia and the XBASE project in Saskatchewan. The acquired interests consist primarily of option agreements and other contractual rights associated with the projects, which were determined to meet the identifiability and recognition criteria for intangible assets in accordance with IAS 38 Intangible Assets. The purchase consideration was allocated between the Darkhan and XBASE projects based on their relative fair values at the acquisition date . The Darkhan and XBASE projects possess substantially similar characteristics, including comparable stages of development, exclusive development rights, risk profiles, and expected development pathways. Management did not identify material differences that would support the application of different valuation multiples or risk adjustments to the projects. Due to the absence of observable market data for comparable development -stage power projects, management concluded that the relative development expenditures incurred by ACT represented the most reliable available basis for estimating the projects’ relative fair values. Accordingly, the relative fair values of the Darkhan and XBASE projects were determined based on their relative development expenditures, and the purchase consideration was allocated as follows: Total consideration 11,000,000 common shares measured at a fair value of $0.145 per share $ 1,595,000 10,000,000 share purchase warrants 576,000 Cash 300,000 $ 2,471,000 Purchase price allocation Darkhan project $ 1,643,754 XBASE project 827,246 $ 2,471,000
Page 13
12 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 6. RECEIVABLES June 30, 2026 December 31, 2025 Sales taxes recoverable $ 101,242 $ 30,680 Amounts due from joint ventures (Note 9, 16) 297,633 69,964 Interest receivable 65,642 55,797 Other receivables 2,331 8,300 $ 466,848 $ 164,741 7. PREPAID EXPENSES AND DEPOSITS June 30, 2026 December 31, 2025 Prepaid expenses $ 165,817 $ 151,540 Lease deposits 14,304 15,940 $ 180,121 $ 167,480 8. INVENTORY At December 31, 2025, the Company’s inventory consists of a single batch of switchgear units held by its subsidiary, Blu Dot. The inventory represents work -in-progress that is near completion and comprises purchased components, electrical parts, materials, and assembly costs. No raw materials or finished goods were held at the reporting date. During the six months ended June 30 , 2026, inventory totaling $513,059 was fully expensed to cost of sales. No inventory write-downs were recognized during the six months ended June 30, 2026 or the year ended December 31, 2025. 9. INTERESTS IN JOINT VENTURES AND ASSOCIATES Low Carbon NU-Energy Corp. (“LC NU-Energy”) LC NU-Energy is a joint venture in which the Company and Low Carbon Canada Solar Limited (“Low Carbon”), an unrelated party, each hold a 50% ownership interest and share joint control. LC NU -Energy was established in 2023 for the purpose of developing the Lethbridge One, Lethbridge Two, Lethbridge Three, and Hanna solar projects.
Page 14
13 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 9. INTERESTS IN JOINT VENTURES AND ASSOCIATES (cont’d…) Low Carbon NU-Energy Corp. (“LC NU-Energy”) (cont’d…) When a solar development project in a SPV owned by LC NU-Energy reaches the ready-to-build stage, Low Carbon is given the right of first refusal to acquire 100% of the SPV’s equity at market value from LC NU -Energy. Concurrent to Low Carbon exercising its right to purchase 100% of a given project’s SPV equity, NU E has the option to acquire 25% of the SPV at the same price per share. If Low Carbon does not elect to acquire the solar development SPV at the ready-to-build stage, NU E has the option to purchase 100% of the project equity. On December 11, 2023, Low Carbon exercised its right of first refusal to purchase 100% of LOSC and NU E exercised its option to purchase 25% of LOSC, resulting in an effective decrease in the Company’s ownership of LOSC from 50% to 25%. The Company, Low Carbon, and LC NU -Energy ha ve a development services agreement whereby the Company provides solar energy development services and Low Carbon provides services and investment capital to LC NU - Energy. The transaction price for the services provided was determined based on the cost of direct services incurred in developing solar projects, plus an allocation of general and administrative costs supporting those activities. During the year ended December 31, 202 5, LC NU-Energy suspended the development services agreement , and accordingly, no further service fee was earned. The following table summarizes the financial information of LC NU-Energy. June 30, 2026 December 31, 2025 Current assets $ 16,084 $ 8,330 Non-current assets 698,788 387,800 $ 714,872 $ 396,130 Current liabilities $ 3,107,349 $ 2,308,229 Preference shares $ 1,601,446 $ 1,601,497 The current assets of LC NU -Energy primarily consist of cash and sales taxes recoverable, and the non -current assets are capitalized development costs. The current liabilities primarily consist of revolving loans to fund the development of the SPVs until completion the specific project reaches the ready -to-build stage. The preferred shares of LC NU - Energy are non -voting non -cumulative and at June 30 , 2026 , were redeemable at a fixed redemption value of $1,601,446, gross, upon excess cash availability from operations and they are held by Low Carbon . Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Operating expenses $ (40,245) $ (22,989) $ (65,237) $ (78,814) Development expenses (144,898) (4,238) (144,898) (135,026) Interest expenses 296,045 (30,085) (284,965) (71,076) Loss and total comprehensive loss $ 110,902 $ (57,312) $ (495,100) $ (284,916) The Company’s share of total comprehensive loss $ 55,451 $ (28,656) $ (247,550) $ (142,458)
Page 15
14 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 9. INTERESTS IN JOINT VENTURES AND ASSOCIATES (cont’d…) Low Carbon NU-Energy Corp. (“LC NU-Energy”) (cont’d…) During the six months ended June 30 , 2026 , the Company’s share of LC NU-Energy’s loss was $247,550 (2025 - $142,458). The Company did not recognize its share of losses as the carrying amount of the investment had been reduced to $nil. The Company has no obligation to fund its proportionate share of losses from the joint venture . Lethbridge One Solar Corp. (“LOSC”) LOSC operates the Lethbridge One solar power facility that commenced commercial operations in January 2025. The Company holds a 25% interest in LOSC. The construction funding for the project is provided by loans from Low Carbon under the terms of the shareholder agreement. The following table summarizes the financial information of LOSC. June 30, 2026 December 31, 2025 Current assets $ 1,963,476 $ 1,509,960 Non-current assets 16,999,263 17,620,429 $ 18,756,568 $ 19,130,389 Current liabilities $ 14,023,087 $ 14,739,329 Preference shares $ 6,823,545 $ 6,823,545 The current assets of LOSC primarily consists of cash and the non -current assets are capitalized development costs. The current liabilities primarily consist of revolving loans to fund the development and construction of the Lethbridge One solar project until completion. At June 30, 2026, the preferred shares of LOSC are non -voting non-cumulative and redeemable at a fixed redemption value of $6,823,545 gross upon excess cash availability from operations and are primarily owned by Low Carbon. Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Revenue $ 364,971 $ 453,955 $ 497,606 $ 624,143 Depreciation (98,610) (228,834) (216,416) (261,283) Operating expenses (191,776) (104,482) (399,887) (219,955) Interest expenses (183,485) (544,215) (695,281) (1,093,965) Unrealized gain (loss) 132 (343) 282 (360) Loss and total comprehensive loss $ (108,768) $ (423,919) $ (813,696) $ (951,420) The Company’s share of total comprehensive loss $ (27,192) $ (105,980) $ (203,424) $ (237,855) During the six months ended June 30, 2026, the Company’s share of LOSC’s loss was $203,424 (2025 - $237,855). The Company did not recognize its share of losses as the carrying amount of the investment had been reduced to $nil . The Company has no obligation to fund its proportionate share of losses from LOSC .
Page 16
15 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 10. LOANS RECEIVABLE At June 30, 2026, the Company had a promissory note receivable of $176,814 (December 31, 202 5 - $176,814) related to the formation of the LC NU -Energy joint venture. The promissory note bears interest at a rate of 7.5% plus SONIA (Sterling Overnight Index Average) per annum, accruing monthly until settlement. Repayment of principal and interest are due on a pari -passu basis, if there is excess cash after the LC NU -Energy joint venture sells a ready -to- build development project or upon the sale or transfer, as applicable, of any Project SPV or any of the assets. During the six months ended June 30, 2026, the Company recognized $ 9,845 (2025 - $10,475) of interest revenue related to the promissory note in finance expense, net. Accrued interest on the loan totalled $ 65,642 (December 31, 202 5 - $55,797) and is included in trade and other receivables. In 2022, the Company provided a payment plan loan to a customer. The outstanding principal balance of $3,642 was fully repaid in January 2025. June 30, 2026 December 31, 2025 Balance, beginning of the year $ 176,814 $ 180,456 Repayment - (3,642) Balance, end of the period $ 176,814 $ 176,814 Current portion $ - $ - Non-current portion $ 176,814 $ 176,814 11. LEASES The Company’s right -of-use assets are operating leases related to its office premises and vehicles. Details of the Company’s right-of-use assets and lease liabilities are as follows: Right-of-use assets Balance at December 31, 2024 $ 88,203 Additions from acquisition (Note 4) 315,470 Disposal (8,375) Amortization (51,255) Balance at December 31, 2025 $ 344,043 Disposal (285,837) Amortization (24,573) Balance at June 30, 2026 $ 33,633
Page 17
16 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 11. LEASES (cont’d…) Lease liabilities June 30, 2026 December 31, 2025 Balance, beginning of the year $ 350,074 $ 89,187 Additions from acquisition (Note 4) - 310,840 Disposal (Note 4) (287,814) (9,279) Liability accretion 6,007 12,507 Lease payments (29,723) (53,181) Balance, end of the period $ 38,544 $ 350,074 Current portion $ 25,883 $ 82,746 Non-current portion $ 12,661 $ 267,328 The maturities of future lease payments relating to the Company’s leases are as follows: Year Under 1 year 26,648 Under 2 years 13,566 40,214 12. EQUIPMENT Equipment Cost Balance at December 31, 2024 $ 20,139 Additions from acquisition (Note 4) 26,016 Balance at December 31, 2025 $ 46,155 Disposal (26,016) Balance at June 30, 2026 $ 20,139 Accumulated depreciation Balance at December 31, 2024 $ 11,151 Depreciation 3,229 Balance at December 31, 2025 $ 14,380 Depreciation 1,766 Disposal (1,752) Balance at June 30, 2026 $ 14,394 Net amount Balance at December 31, 2025 $ 31,775 Balance at June 30, 2026 $ 5,745
Page 18
17 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 13. INTANGIBLE ASSETS Darkhan project XBASE project Total Cost Balance at December 31, 2024 $ - $ - $ - Additions from acquisition (Note 5) 1,643,754 827,246 2,471,000 Balance at December 31, 2025 and June 30, 2026 $ 1,643,754 $ 827,246 $ 2,471,000 Accumulated amortization Balance at December 31, 2024 $ - $ - $ - Amortization 234,822 122,004 356,826 Balance at December 31, 2025 $ 234,822 $ 122,004 $ 356,826 Amortization 176,116 538,603 714,719 Balance at June 30, 2026 $ 410,938 $ 660,607 $ 1,071,545 Net amount Balance at December 31, 2025 $ 1,408,932 $ 705,242 $ 2,114,174 Balance at June 30, 2026 $ 1,232,816 $ 166,639 $ 1,399,455 14. TRADE AND OTHER PAYABLES June 30, 2026 December 31, 2025 Trade payables $ 1,219,887 $ 1,049,235 Amounts due to related parties (Note 16) 173,433 592,772 Accrued liabilities 591,017 295,029 Accrued loan interest (Note 17) 49,169 54,422 Other payables (1) 428,064 733,691 $ 2,461,570 $ 2,725,149 (1) Included in other payables is $ 50,000 of cash consideration payable in connection with the acquisition of development assets (Note 5) and an amount of $376,968 due to Blu Dot. Trade payables of the Company are principally comprised of amounts outstanding for trade purchases relating to general operating activities. The usual credit period taken for trade purchases is between 30 to 90 days. 15. CUSTOMER DEPOSITS As of December 31, 2025, the Company, through its subsidiary Blu Do t, held $611,902 in customer deposits related to the construction of a switchgear unit for a third party. The related revenue was recognized during the six months ended June 30, 2026 upon transfer of control of the switchgear unit to the customer.
Page 19
18 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 16. RELATED PARTY TRANSACTIONS Included in trade and other payables are amounts due to related parties of $ 173,433 (December 31, 2025 - $592,772). These amounts relate to services rendered to the Company by its directors and officers or companies controlled by current or former directors and officers. The balances are unsecured, non -interest bearing, and have no specific terms of repayment. During the six months ended June 30, 2026, the CEO and CFO of the Company advanced an aggregate of $83,780 in loans to the Company. The balances are unsecured, non-interest bearing, and have no specific terms of repayment. Transactions with key management personnel Key management personnel include directors (executive and non -executive) and officers of the Company. The compensation paid or payable to key management personnel during the six month periods ended June 30 is as follows: 2026 2025 Management and director fees $ 371,162 $ 240,500 Investor relations 28,000 - Accounting fees 1,213 6,813 Share-based payments 71,237 - Total $ 471,612 $ 247,313 On January 1 , 2026, the Company entered into a service agreement with a company controlled by the Head of Corporate Development. Under the agreement, the Company paid a monthly fee of $20,000 for corporate development services. The agreement ha d no fixed term and could be terminated without cause upon payment of a termination fee equal to twelve months of the monthly fee. Subsequent to June 30, 2026, the Head of Corporate Development resigned, and the service agreement was terminated. The Company entered into the following key management personnel transactions during the year ended December 31, 2025: a) On October 10, 2025, the Company acquired 100% of the issued and outstanding common shares of Blu Dot in exchange for 29,500,000 common shares of the Company (Note 4). At the time of the transaction, the Company’s President, Chief Executive Officer, and director was also Blu Dot’s President, director, and significant shareholder. b) The Company issued 1,503,750 common shares with a fair value of $578,944 to settle trade payables of $601,500 due to related parties. c) The Company issued 250,000 common shares with a fair value of $67,500 to settle trade payables of $100,000 owing to the former Chief Executive Officer of the Company. Transactions with joint venture As at June 30, 2026, balance due from LC NU -Energy amounted to $297,633 (December 31, 202 5 - $69,964) (Note 6). The Company also holds promissory note receivable from LC NU -Energy with the amount of $176,814 (December 31, 2025 - $176,814) (Note 10).
Page 20
19 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 16. RELATED PARTY TRANSACTIONS (cont’d…) Subsidiary related party transactions The Company’s former subsidiary Blu Dot has significant transactions with a company owned by a close family member of the former President and Chief Executive Officer of the Company. Accordingly, this company is considered a related party. From the acquisition date of October 10, 2025, to December 31, 2025, Blu Dot purchased products and services totaling $446,287 from this related party. A s a t December 31, 2025, the Company’s trade payables included $561,286 owing to this related party. Effective March 6, 2026, the Company ceas ed to control Blu Dot, and accordingly, Blu Dot ceased to be a subsidiary of the Company. 17. LOANS AND BORROWINGS June 30, 2026 December 31, 2025 20% debenture (Note 17.1) $ 100,000 $ 200,000 3% promissory note (Note 17.2) 80,000 80,000 6% convertible debenture (Note 17.3) 119,545 119,545 6% convertible debenture (Note 17.4) - 283,590 299,545 683,135 Convertible debenture – unamortized discount - (22,421) $ 299,545 $ 660,714 (1) 20% debenture On October 17, 2023, the Company issued an unsecured debenture with a principal amount of $300,000, bearing interest at a rate of 10% per annum. In February 2024, the Company extended the maturity date of the debenture through the issuance of 15,000 common shares of the Company. In April 2025, the Company entered into a settlement agreement with the debenture holder, pursuant to which an aggregate amount of $175,000, comprising outstanding principal of $100,000 and accrued interest and extension fees of $75,000, was settled through the issuance of 583,333 common shares of the Company. The Company recognized a gain on settlement of $17,500 in connection with this transaction. Following the settlement, the remaining principal balance of $200,000 bears interest at a rate of 20% per annum, effective January 1, 2025. During the six months ended June 30, 2026, the Company repaid $100,000 of the outstanding principal and $25,000 of accrued interest . As at June 30, 2026, the remaining principal balance of $100,000 and accrued interest of $ 30,000 were due and payable. Subsequent to June 30, 2026, the Company repaid the remaining principal balance of $100,000 and accrued interest of $30,438 in full. (2) 3% promissory note On March 26, 2025, the Company issued an unsecured promissory note with a principal amount of $50,000, bearing interest at 3% per annum and maturing on September 26, 2025. On April 28, 2025, the Company issued another unsecured promissory note to the same note holder with a principal amount of $30,000, bearing interest at 3% per annum and maturing on October 28, 2025. As of June 30, 2026, accrued interest on the debenture amounted to $ 2,955 (December 31, 2025 - $1,765) and is included in trade and other payables.
Page 21
20 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 17. LOANS AND BORROWINGS (cont’d…) (3) 6% convertible debenture On June 25, 2025, the Company issued an unsecured convertible debenture with a principal amount of $119,545. The Debenture matures on June 25, 2026 and bears interest at a rate of 6% per annum, payable on the maturity date. The Debenture is convertible into common shares of the Company at a conversion price of $0.15 per share. As of June 30, 2026, accrued interest on the debenture amounted to $7,310 (December 31, 2025 - $3,753) and is included in trade and other payables. The proceeds were allocated between liability and equity components based on their relative fair values at the issuance date. The liability component was measured at $ 105,598 using a discount rate of 20%, representing the fair value of a comparable debt instrument without a conversion feature. The residual amount of $ 13,947 was allocated to reserves in equity. The liability is subsequently measured at amortized cost using the effective interest method. The equity component is not remeasured after initial recognition. The Company recognized accretion of $ 6,649 for the six months ended June 30, 2026, related to the convertible debenture discount as interest expense. (4) 6% convertible debenture On October 18, 2024, the Company issued an unsecured promissory note with a principal amount of US$200,000, bearing interest at 3% per annum and maturing on October 18, 2025. On June 25, 2025, the Company entered into an agreement with the note holder to convert the outstanding principal amount and accrued interest into a convertible debenture with a principal amount of $283,590. The Debenture mature d on June 25, 2026 and bore interest at a rate of 6% per annum, payable on the maturity date. The Debenture was convertible into common shares of the Company at a conversion price of $0.15 per share. The proceeds were allocated between liability and equity components based on their relative fair values at the issuance date. The liability component was measured at $ 250,505 using a discount rate of 20%, representing the fair value of a comparable debt instrument without a conversion feature. The residual amount of $ 33,085 was allocated to reserves in equity. The liability is subsequently measured at amortized cost using the effective interest method. The equity component is not remeasured after initial recognition. During the six months ended June 30, 2026, the debenture holder exercised the conversion feature and converted the full principal amount of $283,590 into 1,890,599 common shares of the Company in settlement of the debenture. 18. SHARE CAPITAL Authorized share capital The Company has authorized an unlimited number of common shares with no par value. Issued share capital At June 30, 2026, the Company had 65,969,985 common shares outstanding (December 31, 2025 - 83,741,953).
Page 22
21 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 18. SHARE CAPITAL (cont’d…) Share issuance During the six months ended June 30, 2026: (a) In January 2026, the Company completed a non-brokered private placement of 9,837,433 units at a price of $0.12 per unit for gross proceeds of $ 1,180,492. Each unit consisted of one common share and one -half of a share purchase warrant, with each whole warrant entitling the holder to acquire one additional common share at an exercise price of $0.25 per share for a period of two years from the date of issuance. $ 191,967 of the proceeds were allocated to the warrants based on their relative fair values at the issuance date and recorded in equity reserves. The Company paid cash finder’s fees of $ 53,297 and issued 444,145 finder’s warrants. The finder’s warrants have the same terms as the warrants issued under the private placement. The finder’s warrants were valued at $37,949 using the Black-Scholes option pricing model (assuming a risk -free interest rate of 2.5 5%, an expected life of 2 -year, annualized volatility of 76% and a dividend rate of 0%). The Company also incurred legal expenses of $26,850 in connection with the private placement. (b) In February 2026, the Company issued 1,890,599 common shares upon the conversion of a convertible debenture with a principal amount of $283,590 at a conversion price of $0.15 per share . (c) In March 2026, the Company cancelled 29,500,000 common shares that were returned pursuant to the Blu Dot rescission transaction. The shares were measured at their fair value of $0.17 per share on the rescission date. During the year ended December 31, 2025: a) In January 2025, the Company completed a non-brokered private placement of 2,633,331 units at a price of $0.30 per unit for gross proceeds of $789,999. Each unit consisted of one common share and one share purchase warrant; each warrant entitles the holder to acquire one additional common share at an exercise price of $0.35 per share for a period of two years from the date of issuance. $228,000 of the proceeds were allocated to the warrants based on their relative fair values at the issuance date and recorded in equity reserves. The Company incurred legal expenses of $9,476 in connection with the private placement. b) In October 2025, t he Company completed a non -brokered private placement of 1,666,500 units at a price of $0.15 per unit for gross proceeds of $249,975. Each unit consisted of one common share and one -half of a share purchase warrant, with each whole warrant entitling the holder to acquire one additional common share at an exercise price of $0.30 per share for a period of three years from the date of issuance. $42,496 of the proceeds were allocated to the warrants based on their relative fair values at the issuance date and recorded in equity reserves. The Company incurred legal expenses of $7,385 in connection with the private placement . c) In December 2025, t he Company completed a non -brokered private placement of 5,208,366 units at a price of $0.12 per unit for gross proceeds of $625,004. Each unit consisted of one common share and one -half of a share purchase warrant, with each whole warrant entitling the holder to acquire one additional common share at an exercise price of $0.25 per share for a period of two years from the date of issuance. $ 81,251 of the proceeds were allocated to the warrants based on their relative fair values at the issuance date and recorded in equity reserves. The Company paid cash finder’s fees of $31,206 and issued 260,050 finder’s warrants. The finder’s warrants have the same terms as the warrants issued under the private placement. The finder’s warrants were valued at $11,754 using the Black -Scholes option pricing model (assuming a risk -free interest rate of 2.59%, an expected life of 2 -year, annualized volatility of 80% and a dividend rate of 0%). The Company also incurred legal expenses of $11,067 in connection with the private placement.
Page 23
22 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 18. SHARE CAPITAL (cont’d…) Share issuance (cont’d…) d) In February 2025, t he Company issued 143,000 common shares at $0.50 per share from the exercise of warrants for gross proceeds of $71,500. Accordingly, $1,930 was transferred from reserves to share capital . e) In January 2025, t he Company issued 2,298,213 common shares with a fair value of $884,812 to settle trade payables of $919,285, resulting in a gain on settlement of $34,473. Of the shares issued, 1,503,750 were issued to key management personnel. f) In April 2025, t he Company issued 250,000 common shares with a fair value of $67,500 to settle trade payables of $100,000 owing to the CEO of the Company, resulting in a gain on settlement of $32,500 . g) In April 2025, t he Company issued 583,333 common shares with a fair value of $157,500 to settle a debenture loan principal of $100,000 and accrued interest payable of $75,000, resulting in a gain on settlement of $17,500 (Note 17.1). h) In October 2025, t he Company issued 29,500,000 common shares of the Company with a fair value of $5,310,000 in connection with the acquisition of Blu Dot (Note 4). i) In November 2025, t he Company issued 11,000,000 common shares of the Company with a fair value of $1,595,000 in connection with the acquisition of ACT assets (Note 5). Escrowed shares 11,000,000 common shares issued to ACT are being held in escrow and subject to a 36 -month staged release escrow agreement in which 10% of escrowed securities will be released on upon closing date of the transaction and 15% every 6 months thereafter. As at June 30, 2026, 8,250,000 common were held in escrow. 19. SHARE-BASED PAYMENTS Share-based awards The Company has an omnibus equity incentive plan (the “Plan”) in place under which it is authorized to grant share - based awards to directors, officers, employees and consultants. Awards under the Plan may take the form of stock options, restricted stock units (“RSUs”), deferred share units (“DSUs”), and performance share units (“PSUs”). Pursuant to the Plan, the Company may issue aggregate equity awards up to 20% of the issued and outstanding common stock of the Company.
Page 24
23 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 19. SHARE-BASED PAYMENTS (cont’d…) Stock option transactions are summarized as follows: Number of options Weighted Average Exercise Price Balance, December 31, 2024 3,056,667 $ 0.56 Forfeited (475,000) 0.67 Balance, December 31, 2025 2,581,667 $ 0.54 Granted 4,075,000 0.13 Forfeited (2,356,667) 0.40 Balance, June 30, 2026 4,300,000 $ 0.23 Exercisable at June 30, 2026 2,341,667 $ 0.32 Weighted average fair value of options granted during the period $ 0.07 (2025 - $nil) The fair value calculated for stock options granted during the six months ended June 30, 2026 was $248,450 (2025 - $nil) using the Black -Scholes options pricing model . For the six months ended June 30 , 2026 , the Company recognized share-based payment expense of $103,794 (2025 - $7,692) for the portion of stock options that were vested during the period. The following weighted average assumptions were used for the Black -Scholes options pricing model valuation of stock options granted: 2026 2025 Risk-free interest rate 2.86% - Expected life of options 3 Years - Annualized volatility 77.66% - Dividend rate Nil - As at June 30, 2026, the following stock options were outstanding: Number of Options Exercise Price Expiry Date 3,508,333 $ 0.13 March 13, 2029 500,000 $ 0.50 August 17, 2032 125,000 $ 1.00 June 15, 2033 83,334 $ 1.00 August 10, 2033 83,333 $ 1.00 November 14, 2033 4,300,000
Page 25
24 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 19. SHARE-BASED PAYMENTS (cont’d…) Warrants Warrant transactions are summarized as follows: Number of Warrants Weighted Average Exercise Price Balance, December 31, 2024 4,425,000 $ 0.45 Issued 16,330,815 0.27 Exercised (143,000) 0.50 Expired (2,569,500) 0.50 Balance, December 31, 2025 18,043,315 $ 0.28 Issued 5,362,860 0.25 Expired (712,500) 0.50 Balance, June 30, 2026 22,693,675 $ 0.27 The warrants are measured at fair value using the Black -Scholes options pricing model. The fair value of warrants issued with private placement units were estimated using the following assumptions: 2026 2025 Risk-free interest rate 2.55% 2.68% Expected life of options 2 Years 2 Years Annualized volatility 76.41% 65% Dividend rate Nil Nil As at June 30, 2026, the following warrants were outstanding: Number of Warrants Exercise Price Expiry Date 1,000,000 $ 0.50 July 23, 2026 1,766,666 $ 0.35 January 7, 2027 866,665 $ 0.35 January 30, 2027 2,864,234 $ 0.25 December 29, 2027 4,937,610 $ 0.25 January 20, 2028 425,250 $ 0.25 January 29, 2028 333,250 $ 0.30 October 7, 2028 500,000 $ 0.30 October 30, 2028 10,000,000 $ 0.25 November 21, 2028 22,693,675
Page 26
25 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 20. NET FINANCE INCOME (EXPENSE) 2026 2025 Interest on loans and borrowings $ (19,747) $ (25,036) Interest on lease liabilities (Note 11) (6,007) (3,642) Bank fees and other (6,649) (2,841) Interest revenue (Note 10) 9,845 10,475 Finance income (expense), net $ (22,558) $ (21,044) 21. SUPPLEMENTAL CASH FLOW INFORMATION Significant non-cash transactions during the six months ended June 30, 2026 included: a) Issued 4,918,715 warrants with a value of $191,967 in connection with private placement financings. b) Issued 444,145 finder’s warrants with a value of $37,949 in connection with private placement financings. c) Cancelled 29,500,000 common shares valued at $5,015,000 in connection with the rescission of Blu Dot acquisition (Note 4). d) Issued 1,890,599 common shares upon the conversion of a convertible debenture with a principal amount of $283,590 at a conversion price of $0.15 per share. e) Included in trade and other payables are $50,000 related to acquisition of intangible assets. Significant non-cash transactions during the year ended December 31, 2025 included: a) Issued 6,070,765 warrants with a value of $351,747 in connection with private placement financings. b) Issued 260,050 finder’s warrants with a value of $11,754 in connection with private placement financings. c) Issued 29,500,000 common shares at $5,310,000 on acquisition of Blu Dot (Note 4). d) Issued 11,000,000 common shares at $1,595,000 and 10,000,000 warrants at $576,000 on acquisition of development rights (Note 5). e) Included in trade and other payables are $300,000 related to acquisition of development rights. f) Issued 2,548,213 common shares with a fair value of $952,312 to settle $1,019,285 in trade payable. g) Issued 583,333 common shares with a fair value of $157,500 to settle a debenture loan principal of $100,000 and accrued interest payable of $75,000.
Page 27
26 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 22. FINANCIAL INSTRUMENTS The carrying amounts of cash, receivables, loans receivable, trade and other payables, loans payable to related parties , and loans and borrowings measured at amortized cost approximate their fair values due to the short -term nature of these financial instruments and/or the rate of interest being charged . Financial risk management The Company’s financial risks arising from its financial instruments are credit risk, liquidity risk, foreign currency exchange risk, and interest rate risk. The Company’s exposures to these risks and the policies on how to mitigate these risks are set out below. Management monitors and manages these exposures to ensure appropriate measures are implemented on a timely basis and in an effective manner. Credit risk Credit risk is the risk of potential loss to the Company if the counter party to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk with respect to its cash, receivables, and loans receivable, to the extent of their carrying amounts at the reporting date. The Company mitigates its exposure to credit risk by maintaining its cash balances with major Canadian financial institutions with strong investment -grade ratings assigned by primary rating agencies. Loans receivable are due from the Company’s equity -accounted joint venture. Receivables consist primarily of sales tax recoverable from the Government of Canada, accrued interest, and amounts due from the equity-accounted joint venture. The Company expects these receivables to be fully recoverable . Liquidity risk Liquidity risk is the risk that the Company will not meet its obligations associated with its financial liabilities as they fall due. As at June 30, 2026, the Company has cash of $ 13,602 and current liabilities of $2,870,779. The Company’s financial liabilities include trade and other payables, loans payable to related parties, and loans and borrowings. Trade and other payables and loans payable to related parties have contractual maturities of 30 days or are due on demand. Loans and borrowings were past due as at June 30, 2026. At present, the Company’s operations do not generate positive cash flows. The Company ’s primary source of funding has been the issuance of equity securities through private placements. Despite previous success in acquiring these financings, there is no guarantee of obtaining future financings. Liquidity risk is assessed as high. Subsequent to June 30, 2026, the Company completed a private placement for gross proceeds of $3,860,053 (Note 27). Foreign currency exchange risk Foreign currency exchange risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company incurs certain operating expenses denominated in U.S. dollars, which are funded through conversions from its Canadian dollar bank accounts. Management does not believe the Company is exposed to material foreign currency risk. The Company does not hedge its foreign exchange risk . Interest rate risk The Company is exposed to interest rate risk arising from cash held in Canadian financial institutions. The interest rate risk on cash is not considered significant due to its short -term nature and maturity. The Company’s loans and borrowings bear fixed interest ranging from 3% to 20% and are therefore not exposed to significant interest rate risk. The Company has not used any financial instrument to hedge potential fluctuations in interest rates .
Page 28
27 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 22. FINANCIAL INSTRUMENTS (cont’d…) Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. The Company has no financial assets measured at FVTPL . 23. SEGMENTED INFORMATION Operating segments An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses relating to transactions with other components of the Company. The Company operates in a single reportable segment , being the acquisition and development of energy infrastructure projects. Geographic information Canada Mongolia Total June 30, 2026 Non-current assets $ 382,831 $ 1,232,816 $ 1,615,647 December 31, 2025 Non-current assets $ 1,257,874 $ 1,408,932 $ 2,666,806 24. CAPITAL MANAGEMENT The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern in order to pursue its business of originating and developing energy projects and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company considers shareholders’ equity as the component of capital. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue additional shares, issue new debt, acquire or dispose of assets or adjust the amount of cash. The Company is not subject to externally imposed capital requirements.
Page 29
28 NU E POWER CORP. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2026 (Unaudited – Prepared by Management) (Expressed in Canadian dollars) 25. CONTINGENCIES On July 7, 2025, Northern DC Solar Inc. (“NDC”), a subsidiary of the Company, was named as a defendant, together with two other parties in a statement of claim filed in the Judicial Centre of Calgary. The plaintiff is seeking damages of up to $5 million in connection with a transformer failure that occurred in August 2022 at a solar project for which NDC provided construction services in 2020. The Company has notified its insurers and submitted a claim under applicable insurance policies. The ultimate outcome and the amount of any potential obligation, if any, net of expected insurance recoveries, cannot be reasonably estimated at this time. Accordingly, no provision has been recognized in these consolidated financial statements. On April 15 , 2026, the former Chief Financial Officer of the Company filed a claim against the Company seeking payment of $159,273, plus accrued interest of $12,548, in connection with alleged outstanding management fees. Of the amount claimed, $159,273 was included in the Company’s trade and other payables . The Company is currently reviewing the claim. 26. CHANGES TO CLASSIFICATION Certain comparative amounts for the prior period have been reclassified to conform to current period presentation on the Consolidated Statements of Financial Position, Consolidated Statements of Loss and Comprehensive Loss, Consolidated Statements of Changes in Equity (Deficiency) and Consolidated Statements of Cash flows. Such reclassification had no effect on the Company's financial position, performance, shareholders' equity and cash flows for the comparative periods. 27. EVENTS AFTER THE REPORTING PERIOD (a) On July 8, 2026, the Company completed the first tranche of a non-brokered private placement of 13,124,667 units at a price of $0.1 5 per unit for gross proceeds of $1,968,700. Each unit consisted of one common share and one-half of a share purchase warrant, with each whole warrant entitling the holder to acquire one additional common share at an exercise price of $0.25 per share for a period of three years from the date of issuance. The Company paid cash finder’s fees of $32,472 and issued 716,680 finder’s warrants. The finder’s warrants are exercisable at $0.15 per share for a period of 24 months from the closing date . (b) On August 12, 2026, the Company completed the final tranche of a non -brokered private placement of 12,609,019 units at a price of $0.1 5 per unit for gross proceeds of $1,891,353. Each unit consisted of one common share and one -half of a share purchase warrant, with each whole warrant entitling the holder to acquire one additional common share at an exercise price of $0.25 per share for a period of three years from the date of issuance. The Company paid cash finder’s fees of $75,015 and issued 606,897 finder’s warrants. The finder’s warrants are exercisable at $0.15 per share for a period of 24 months from the closing date . (c) On August 26, 2026, 560,720 common shares of the Company issued to Cashu Technologies Pty Ltd ("Cashu") pursuant to the private placement that closed on August 12, 2026 were cancelled and returned to treasury. The 280,360 common share purchase warrants issued in connection with the private placement units were also cancelled as a result. (d) The Company repaid the remaining principal balance of the 20% convertible debenture of $100,000 and accrued interest of $30,438 in full.