Financial statements
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1 | Page FIRST PHOSPHATE CORP. (First Potash Corp.) Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars, unless otherwise noted) (Unaudited – Prepared by Management)
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FIRST PHOSPHATE CORP. 2 | Page INDEX Page Number MANAGEMENT’S RESPONSIBILITY FOR THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS 3 STATEMENTS OF FINANCIAL POSITION 4 STATEMENTS OF LOSS & COMPREHENSIVE LOSS 5 STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 6 STATEMENTS OF CASH FLOWS 7-8 NOTES TO THE FINANCIAL STATEMENTS 9-29
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FIRST PHOSPHATE CORP. 3 | Page MANAGEMENT’S RESPONSIBILITY FOR THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of the accompanying condensed interim consolidated financial statements in accordance with International Accounting Standard 34, Interim Financial Reporting. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and fair presentation of interim financial information that is free from material misstatement, whether due to fraud or error. The condensed interim consolidated financial statements include amounts based on management's best estimates and judgments. Management has assessed the Company's ability to continue as a going concern and has prepared the condensed interim consolidated financial statements on a going concern basis, as appropriate. The Board of Directors is responsible for overseeing the Company's financial reporting process.
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FIRST PHOSPHATE CORP. 4 | Page CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian Dollars) (Unaudited) AS AT Assets August 31, 2026 $ February 28, 2026 $ Current Assets Cash and cash equivalents (note 6) 19,949,271 20,190,457 Restricted cash (note 6) 90,000 40,000 Prepaid expenses (note 7) 1,714,630 1,093,593 Tax credits/grants receivable (note 20) 5,011,536 3,348,184 Amounts receivable 54,620 101,042 26,820,057 24,773,276 Non-Current Assets Investments (note 8) 173,790 169,960 Exploration and evaluation assets (note 9) 3,638,061 3,591,734 Right-of-use assets (note 10) 144,381 120,140 3,956,232 3,881,834 Total Assets 30,776,289 28,655,110 Liabilities Current Liabilities Accounts payable and accrued liabilities 1,774,867 2,883,651 Lease liabilities (note 11) 89,475 38,878 Flow-through share premium liability (note 12) 2,286,955 182,800 4,151,297 3,105,329 Non-current Liabilities Lease liabilities (note 11) 39,926 60,451 Bridge loan (note 13) 747,246 726,213 787,172 786,664 Total Liabilities 4,938,469 3,891,993 Shareholders’ Equity Capital stock (note 14) 91,282,182 72,806,008 Contributed surplus (note 14) 6,743,688 4,874,790 Shares to be issued (note 21(a)) 334,116 100,126 Deficit (72,522,166) (53,017,807) Total Shareholders’ Equity 25,837,820 24,763,117 Total Liabilities and Shareholders’ Equity 30,776,289 28,655,110 Nature of operations (note 1) Subsequent events (note 22) Approved and authorized by the Board of Directors on October 15, 2026. “BENNETT KURTZ” “JOHN PASSALACQUA” Director Director The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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FIRST PHOSPHATE CORP. 5 | Page CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Expressed in Canadian Dollars) (Unaudited) For the three months ended For the six months ended August 31, 2026 $ August 31, 2025 $ August 31, 2026 $ August 31, 2025 $ Expenses Mining exploration and metallurgy (note 9) 7,365,756 1,463,750 13,571,989 2,726,356 Share based compensation (note 14 and 16) 1,116,566 423,577 2,406,412 864,968 Business development 2,674,926 143,083 3,638,511 274,236 Salaries and benefits 262,350 - 430,542 - Professional fees 157,622 100,480 477,493 192,200 Research and development 426,438 - 891,765 - General and administrative (note 15) 239,345 77,391 682,752 148,966 Regulatory and compliance 602,900 45,724 661,151 72,468 Depreciation 15,779 - 29,326 - Total expenses (12,861,682) (2,254,005) (22,789,941) (4,279,194) Other income/(expenses) Government grants 494,387 - 2,196,511 - Interest income 150,042 17,620 246,948 30,234 Interest expense (12,480) (56) (25,281) (103) Financing expense - (232,805) - (332,578) Gain on amortization of flow-through share premium liability (note 12) 718,086 463,181 862,768 823,926 Foreign currency translation gain (note 8 and 13) 1,642 56 4,636 3,368 Net loss and comprehensive loss (11,510,005) (2,006,009) (19,504,359) (3,754,347) Loss per common share – basic and diluted (0.06) (0.02) (0.11) (0.04) Weighted average number of common shares outstanding – basic and diluted 187,610,481 109,002,376 182,949,715 99,628,086 The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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FIRST PHOSPHATE CORP. 6 | Page CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY For the six months ended August 31, 2026 and 2025 (Expressed in Canadian Dollars) (Unaudited) Common Shares Number of shares Amount $ Contributed surplus $ Shares to be issued $ Deficit $ Total $ Balance, February 28, 2025 89,947,551 30,657,018 5,309,401 - (29,575,088) 6,391,331 Shares issued 29,355,711 11,159,349 - - - 11,159,349 Shares to be issued - - - 4,650 - 4,650 Flow-through share premium liability - (219,913) - - - (219,913) Residual value of warrants in units issued - (64,550) 64,550 - - - Share issuance costs - (777,947) - - - (777,947) Shares issued for finders’ fees 1,584,470 623,700 - - - 623,700 Warrants issued for finders' fees - - 126,647 - - 126,647 Share based compensation - - 864,968 - - 864,968 Shares issued upon exercise of restricted share units 2,658,780 771,046 (771,046) - - - Net loss for the period - - - - (3,754,347) (3,754,347) Balance, August 31, 2025 123,546,512 42,148,703 5,594,520 4,650 (33,329,435) 14,418,438 Balance, February 28, 2026 177,199,011 72,806,008 4,874,790 100,126 (53,017,807) 24,763,117 Shares issued 8,849,145 17,698,290 - - - 17,698,290 Shares to be issued for exploration activities - - - 233,990 - 233,990 Flow-through share premium liability - (2,966,923) - - - (2,966,923) Residual value of warrants in units issued - (655,069) 655,069 - - - Shares issued for finders’ fees 330,960 531,640 - - - 531,640 Warrants issued for finders' fees - - 60,567 - - 60,567 Share issuance costs - (761,088) - - - (761,088) Share based compensation - - 2,406,412 - - 2,406,412 Warrants exercised 2,448,939 3,178,160 (116,986) - - 3,061,174 Options exercised 600,000 464,238 (149,238) - - 315,000 Shares issued upon exercise of restricted share units 991,609 986,926 (986,926) - - - Net loss for the period - - - - (19,504,359) (19,504,359) Balance, August 31, 2026 190,419,664 91,282,182 6,743,688 334,116 (72,522,166) 25,837,820 The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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FIRST PHOSPHATE CORP. 7 | Page CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian Dollars) (Unaudited) Supplemental cash flow information Recognition of flow-through liability 2,966,923 219,913 Shares issue for finders’ fees 531,640 623,700 Warrants issued for finders’ fees 60,567 126,647 Shares issued upon exercise of RSUs 986,926 771,046 Residual value of warrants issued as part of units 655,069 64,550 Transfer of contributed surplus upon warrant exercise 116,986 - Transfer of contributed surplus upon option exercise 149,238 - The Company paid $nil in taxes and $110 in interest in the six months ended August 31, 2026 (2025 - $nil and $103, respectively). For the six months ended August 31, 2026 $ August 31, 2025 $ Operating Activities Net loss for the period (19,504,359) (3,754,347) Non-cash items: Share based compensation 2,406,412 864,968 Financing expense - 332,578 Shares to be issued for exploration activities 233,990 - Depreciation 29,326 - Interest expense 25,172 - Gain on amortization of flow-through share premium liability (862,768) (823,926) Foreign currency translation gain (4,636) (3,368) Changes in non-cash working capital items: Amounts receivable 46,422 (508,831) Tax credits/grants receivable (1,663,352) 962,634 Prepaid expenses (621,037) (2,290,845) Accounts payable and accrued liabilities (1,108,784) (193,199) Restricted cash (50,000) (5,000) Net cash used in Operating Activities (21,073,614) (5,419,317) Financing Activities Proceeds from issuance of shares and warrants 17,698,290 11,159,349 Share issuance costs (168,881) (27,600) Proceeds from exercise of warrants 3,061,174 - Proceeds from exercise of options 315,000 - Proceeds from shares to be issued - 4,650 Payment of lease liabilities (26,556) - Net cash provided by Financing Activities 20,879,027 11,136,400 Investing Activities Payment on ROU assets (272) - Purchase of exploration and evaluation assets (46,327) - Net cash used in Investing Activities (46,599) - Net change in cash for the period (241,186) 5,717,082 Cash and cash equivalents, beginning of the period 20,190,457 1,873,550 Cash and cash equivalents, end of the period 19,949,271 7,590,632
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FIRST PHOSPHATE CORP. 8 | Page The Company received $293,370 in interest income in the six months ended August 31, 2026 (2025 - $30,234). The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 9 | Page 1. Nature of Operations First Phosphate Corp. (the “Company”) was incorporated in British Columbia on September 18, 2006. On June 29, 2022 the Company filed articles of amendment with the Province of British Columbia changing its name from First Potash Corp. to First Phosphate Co rp. The Company owns and is developing igneous rock phosphate mineral properties in the Saguenay Region of Quebec to produce phosphoric acid, which will be used to manufacture cathode active material ("CAM") for use in lithium iron phosphate ("LFP") batteries for the LFP battery industry. The Company’s common shares are listed under the symbol “PHOS” on the Canadian Securities Exchange, “FRSPF” on the OTCQX Market and “KD0” on the Frankfurt Stock Exchange. A Level 2 American Depositary Receipt (“ADR”) trades on the Nasdaq Global Market under the symbol "PHOS," with each ADR representing ten common shares. The address of the Company’s corporate office and registered and records office is 1055 West Georgia Street, 1500 Royal Centre, P.O. Box 11117, Vancouver, British Columbia, V6E 4N7. 2. Going Concern These financial statements have been prepared under IFRS Accounting Standards as issued by the International Accounting Standards Board (the “IASB”) applicable to a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations for the foreseeable future. Given the current stage of operations, the Company’s ability to continue as a going concern is contingent on its ability to obtain additional financing. While the Company has been successful in arranging financing in the past, the success of such initiatives cannot be assured. As of August 31, 2026, the Company has raised adequate financing that is sufficient to sustain operations for the next twelve months. Accordingly, the financial statements do not give effect to any adjustments that may be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and liquidate its liabilities in other than the normal course of operations and at amounts which may differ from those shown in these financial statements. Such adjustments could be material. 3. Basis of Presentation (a) Statement of compliance These condensed interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. They do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company’s annual financial statements as at and for the year ended February 2 8, 2026 (the “Annual Financial Statements”). However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual financial statements as at and for the year ended February 28, 2026. These unaudited condensed interim consolidated financial statements follow the same accounting policies and methods of application as the annual financial statements.
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 10 | Page These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments which are measured at fair value through profit or loss. In addition, these condensed interim consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. (b) Functional and presentation currency These condensed interim consolidated financial statements are presented in Canadian dollars, which is also the functional currency of the Company, unless otherwise stated. (c) Comparative figures Certain comparative amounts in the condensed interim consolidated statements of loss and comprehensive loss have been reclassified to conform with the current period presentation. These reclassifications had no impact on the previously reported net loss and comprehensive loss. (d) Consolidation The consolidated financial statements include the accounts of the Company and its controlled subsidiaries. Details of the controlled subsidiaries are as follows: Country of incorporation Percentage owned* 1606684 B.C. Ltd. Canada 100% *1606684 B.C. Ltd. was incorporated on September 2, 2026, subsequent to the period end. Subsidiaries are entities controlled by the Company. Control exists when the Company has power over the entity, is exposed to or has rights to variable returns from its involvement, and has the ability to use its power to affect those returns. Subsidiaries are consolidated from the date control commences until the date control ceases. All intercompany balances, transactions, income and expenses, and unrealized gains and losses are eliminated on consolidation. 4. Material Accounting Policy Information In preparing these condensed interim consolidated financial statements, the Company applied the accounting policies, critical judgments and estimates disclosed in note 3 and 4 of the annual financial statements, except as described in note 5. In the opinion of management, all adjustments considered necessary for fair presentation of the Company’s financial position, results of operations and cash flows have been included. Operating results for the six months ended August 31, 2026, are not necessarily indicative of the results that may be expected for the year ending February 28, 2027.
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 11 | Page 5. Change in Accounting Policy Presentation of government grants Effective March 1 , 2026, the Company changed its accounting policy for the presentation of government grants related to received or receivable. Previously, government grants were presented as a deduction from the related expenses (net presentation). Under the new policy, the related expenses are presented on a gross basis, and the government grants are presented separately as government grant income on the condensed interim consolidated statements of loss and comprehensive loss. Management believes the new presentation provides more reliable and relevant information because it more transparently reflects the gross amount of the Company’s exploration, feasibility and operating expenditure and, separately, the government assistance received to offset such expenditure. The change has been applied retrospectively. It affects only presentation and classification within the statement of loss and comprehensive loss and has no effect on net loss, comprehensive loss, loss per share, total assets, total liabilities , deficit or shareholders’ equity as at or for any period presented . Furthermore, this change has no effect on the comparative period for the six months ended August 31, 2025 as there was no government grant income for that period. 6. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents includes cash held at the bank of $17,249,271 (February 28, 2026 - $10,690,457) and investments in guaranteed investment certificates (“GIC”) of $2,700,000 (February 28, 2026 - $9,500,000) which comprises of one-year cashable term GICs earning interest of 2.45% to 2.70% per annum. Restricted cash is comprised of $90,000 invested in GICs (February 28, 2026 - $40,000), which are one-year cashable term GICs earning interest at 2% per annum . The GICs are held as collateral for credit cards issued to officers of the Company. 7. Prepaid Expenses Prepaid expenses are comprised of the following: August 31, 2026 $ February 28, 2026 $ Expenses paid in advance: Business development 863,632 727,886 Mining exploration and metallurgy 381,351 64,825 General administrative expenses 267,526 82,035 Regulatory and compliance expenses 49,554 71,389 Research and development 12,842 - Professional fees 139,725 147,458 Total 1,714,630 1,093,593
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 12 | Page 8. Investments On January 10, 2023, the Company entered into an investment and licensing option agreement ( the “IPL Agreement”) with Integrals Power Limited (“ IPL”) under the terms of which the Company acquired 7,386 IPL shares for £50,000 ($83,060). Under the terms of the IPL Agreement, IPL granted an option to acquire a license to use IPL technology in a facility of a production capacity of up to 1,000‐tonnes of LFP CAM for a further payment of £950,000. IPL also granted the Company another option to acquire, for an additional upfront payment of £1,000,000, a license to use IPL technology in a facility of a production capacity beyond 1,000‐tonnes. The Company is committed to a 1.5% royalty per kilogram of LFP CAM sold from a facility that uses IPL technology. A continuity of investments is as follows: $ Balance, February 28, 2025 168,174 Gain on foreign currency translation 1,786 Balance, February 28, 2026 169,960 Balance, February 28, 2026 169,960 Gain on foreign currency translation 3,830 Balance, August 31, 2026 173,790 9. Exploration and Evaluation Assets The following details the changes in exploration and evaluation assets in the Saguenay Region of Quebec for the six-month periods ended August 31, 2025 and 2026: The Company expenses non-acquisition exploration and evaluation expenditure to net income ( loss). This is presented as mining exploration and metallurgy in the statement of loss and comprehensive loss. The following table details such expenditure: Lac`a l'Orignal (a) $ Begin- Lamarche area flagship area (b) $ Bluesky area (c) $ Total $ Balance as of February 28, 2025 3,270,709 321,025 - 3,591,734 Acquisition costs - - - - Balance as of August 31, 2025 3,270,709 321,025 - 3,591,734 Balance as of February 28, 2026 3,270,709 321,025 - 3,591,734 Acquisition costs - - 46,327 46,327 Balance as of August 31, 2026 3,270,709 321,025 46,327 3,638,061
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 13 | Page Lac`a l'Orignal area (a) $ Begin – Lamarche flagship area (b) $ Bluesky area (c) $ Total $ Consulting and others - 144,480 - 144,480 Survey, drilling & geophysics - 2,909,770 - 2,909,770 Metallurgical testing - 1,763 - 1,763 Mining tax credits - (329,657) - (329,657) For the six months ended August 31, 2025 - 2,726,356 - 2,726,356 Consulting and others 10,910 600,435 396,610 1,007,955 Survey, drilling & geophysics 4,160 10,064,354 266,073 10,334,587 Metallurgical testing - 2,765,835 - 2,765,835 Tax credits relating to resources (667) (506,405) (29,316) (536,388) For the six months ended August 31, 2026 14,403 12,924,219 633,367 13,571,989 (a) Lac `a l'Orignal area The Lac `a l'Orignal properties consist of a series of staked claims and claims acquired under various option agreements. All of the claims are 100% owned by the Company, are free of net smelter royalties and are in good standing. This property is in the exploration stage. (b) Begin - Lamarche flagship area The Begin-Lamarche properties consist of a series of staked claims and claims acquired under various option agreements. All of the claims are 100% owned by the Company, are free of net smelter royalties and are in good standing. This property is in the exploration stage. (c) Bluesky area The Bluesky properties consist of a series of staked claims in the early exploration stage. While the Company continues to maintain certain claims in the area, the related exploration and evaluation assets have previously been impaired. During the six months ended August 31, 2026, the Company staked further claims in different areas of the property which were not staked previously to ascertain possible future economic benefit to the Company. The company will have to asses s these benefits by conducting more exploration activities.
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 14 | Page 10. Right-Of-Use Assets The following details the changes in right-of-use assets: Right-of-use assets $ Balance, February 28, 2025 - Additions 133,617 Depreciation for the year (13,477) Balance, February 28, 2026 120,140 Balance, February 28, 2026 120,140 Additions 53,567 Depreciation for the period (29,326) Balance, August 31, 2026 144,381 11. Lease Liabilities On September 23, 2025, the Company entered into a 24-month vehicle lease agreement with a down payment and related expenses of $26,743 and monthly payments of $276. The lease has a purchase option of $35,053 at the conclusion of the 24-month lease period. On November 10, 2025, the Company signed a sublease agreement, which runs for 2 years and 9 months, from December 1, 2025 to August 31, 2028, with no renewal option. The company occupies the space for free in December 2025, then pays a base monthly rent of $3,460 starting January 1, 2026. At the date of initial recognition, lease liabilities were measured at the present value of remaining lease payments, discounted at an annual interest rate of 7.29%. On August 5, 2026, the Company entered into a 12-month vehicle lease agreement. The lease requires monthly payments of $4,138 and a security deposit of $4,775 paid at lease commencement. The lease includes a purchase option of approximately $5,000 at the conclusion of the 12‑month lease term. The lease financing rate is 4.99% , and the lease liability was measured at the present value of remaining lease payments, discounted at an annual interest rate of 4.99%. The following details the changes in lease liabilities:
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 15 | Page 12. Flow-Through Share Premium Liability For the six months ended August 31, 2026 $ For the year ended February 28, 2026 $ Balance, beginning of the period 182,800 718,477 Liability incurred through FT shares issued 2,966,923 722,714 Amortization for the period (862,768) (1,258,391) Balance, end of the period 2,286,955 182,800 As at August 31, 2026, $11,158,458 remains to be spent on qualifying expenditures (February 28, 2026 - $6,838,519). 13. Bridge Loan On December 16, 2024, the Company entered into a binding letter of intent (the “LOI”) for a future phosphate concentrate offtake agreement. The LOI contemplates a minimum of 200,000 tonnes per year (with an option to increase by 20%) starting around Januar y 1, 2029, subject to project completion. The arrangement includes a potential customer prepayment of up to €3,100,000, recoverable through purchase rebates totaling €6,200,000 over the first four years. The LOI expires on December 16, 2029, unless extended. On January 5, 2026, the Company and the customer entered into an amendment to the LOI pursuant to which the customer made a prepayment of €450,000 (CA$725,580) to the Company, recognized as a bridge loan. The loan bears interest at 6% per annum and is repayable in cash if the Company does not proceed to production upon expiry of the LOI on December 16, 2029. The bridge loan has been recognized at the present value of the contingent repayment obligation, discounted at a rate of For the six months ended August 31, 2026 $ For the year ended February 28, 2026 $ Balance, beginning of period 99,329 - Recognized during the period 53,295 106,874 Interest expense 3,333 757 Lease payments (26,556) (8,302) 129,401 99,329 Balance, end of period – current 89,475 38,878 Balance, end of period – non-current 39,926 60,451 Balance, end of period 129,401 99,329
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 16 | Page 6% over the term of 3.82 years. The following details the changes in the bridge loan: For the six months ended August 31, 2026 $ For the year ended February 28, 2026 $ Balance, beginning of the period 726,213 - Advance received - 725,580 Interest expense 21,839 993 Effect of foreign exchange (806) (360) Balance, end of the period 747,246 726,213 14. Share Capital and Contributed Surplus (a) Authorized shares The authorized capital stock of the Company is an unlimited number of common shares and an unlimited number of preferred shares issuable in series. The Company has no preferred shares outstanding. (b) Common shares Common share transactions are as follows: During the six months ended August 31, 2026 (i) On March 11, 2026, the Company issued 300,000 common shares on the exercise of 300,000 options, for total proceeds of $120,000. The options ’ issue date value of $90,806 was reclassified upon exercise from contributed surplus to share capital. (ii) In April 2026, the Company issued 2,448,939 common shares on the exercise of 2,448,939 warrants, for total proceeds of $3,061,174. The warrants’ issue date value of $116,986 was reclassified upon exercise from contributed surplus to share capital. (iii) On June 12, 2026, the Company issued 6,277,570 flow-through shares at a price of $2.00 per share, for gross proceeds of $12,555,140, with a flow -through premium deduction of $2,448,253, and 1,432,750 units at a price of $2.00 per unit, for gross proceeds of $2,865,500. Each unit was comprised of one common share and one common share purchase warrant, with each warrant exercisable for one common share at a price of $2.50 per common share until December 31, 2026, subject to an accelerated expiry clause, valued using the residual method at $558,773. In connection with the issuances, the Company paid $156,881 in cash finders' fees,
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 17 | Page and issued 322,920 compensation shares with a fair value of $519,902 based on the fair market value of $1. 61 per share and 401,360 compensation warrants with a fair value of $59,470 computed using the Black Scholes pricing model, exercisable at $2.50 per common share until December 31, 2026, subject to an accelerated expiry clause. (iv) On July 10, 2026, the Company issued 960,500 flow-through shares at a price of $2.00 per share, for gross proceeds of $1,921,000, with a flow-through premium deduction of $518,670, and 178,325 units at a price of $2.00 per unit, for gross proceeds of $356,650. Each unit was comprised of one common share and one common share purchase warrant, with each warrant exercisable for one common share at a price of $2.50 per common share until December 31, 2026, subject to an accelerated expiry clause, valued using the residual method at $96,296. In connection with the issuance, the Company paid $12,000 in cash finders' fees, and issued 8,040 compensation shares with a fair value of $11,738 based on the fair market value of $1.46 per share and 14,040 compensation warrants with a fair value of $1,097 computed using the Black Scholes pricing model , exercisable at $2.50 per common share until December 31, 2026, subject to an accelerated expiry clause. (v) On July 10, 2026, the Company issued 16,475 common shares upon the exercise of RSUs, following the cancellation of 30,525 RSUs held by a consultant and the accelerated vesting of the remaining 16,475 RSUs. The RSUs' grant date fair value of $16,310 was reclassified upon exercise from contributed surplus to share capital. (vi) On August 25, 2026, the Company issued 300,000 common shares on the exercise of 300,000 options, for total proceeds of $195,000. The options' issue date value of $58,432 was reclassified upon exercise from contributed surplus to share capital. (vii) On August 31, 2026, the Company issued 975,134 common shares upon the exercise of RSUs vested to directors, management and consultants. The RSUs' grant date fair value of $970,616 was reclassified upon exercise from contributed surplus to share capital. During the six months ended August 31, 2025 (viii) In May 2025, the Company issued 5,041,880 flow-through shares at a price of $0.35 per share, for gross proceeds of $1,764,658, with a flow -through premium deduction of $100,838, and 1,789,990 units, at a price of $0.35 per unit, for gross proceeds of $626,497. Each unit wa s comprised of one common share and one half of one common share purchase warrant with each whole warrant exercisable for one common share at a price of $0.50 per common share until December 31, 2025, subject to an accelerated expiry clause, valued using the residual method at $35,800. In connection with the above private placements, the Company paid $800 in cash finders' fees, issued 244,478 compensation shares with a fair value of $37,520 based on the fair market value of $0.33 per share for 113,697 share s, and a fair value of $47,735 based on the fair market value of $0.37 per share for 130,781 shares, and issued 218,193 compensation warrants with a fair value of $12,591 computed using the Black Scholes pricing model, exercisable at $0.50 per common share, until December 31, 2025, subject to an accelerated
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 18 | Page expiry clause. (ix) On June 2, 2025, the Company issued 2,883,429 flow -through shares at a price of $0.35 per share, for gross proceeds of $1,009,200, and 334,757 units, at a price of $0.35 per unit, for gross proceeds of $117,164. Each unit is comprised of one common share and one-half of one common share purchase warrant with each whole warrant exercisable for one common share at a price of $0.50 per common share until December 31, 2025, subject to an accelerated expiry clause. In connection with the issuances, the Company i ssued 226,674 compensation shares with a fair value of $91,803 based on the fair market value of $0.41 per share and 226,674 compensation warrants with a fair value of $21,209 computed using the Black Scholes pricing model, exercisable at $0.50 per common share, until December 31, 2025, subject to an accelerated expiry clause. (x) In July 2025, the Company issued 12,856,513 flow-through shares at a price of $0.35 per share, for gross proceeds of $4,499,780, and 550,142 units, at a price of $0.35 per unit, for gross proceeds of $192,549. Each unit is comprised of one common share and one-half of one common share purchase warrant with each whole warrant exercisable for one common share at a price of $0.50 per common share until December 31, 2025, subject to an accelerated expiry clause. In connection with the issuances, the Company pai d $1,600 in cash finder's fees, and issued 894,998 compensation shares with a fair value of $228,210 based on the fair market value of $0.36 per share for 642,844 shares, and a fair value of $114,730 based on the fair market value of $0.46 per share for 252,154 shares and 899,570 compensation warrants with a fair value of $64,680 computed using the Black Scholes pricing model , exercisable at $0.50 per common share, until December 31, 2025, subject to an accelerated expiry clause. (xi) On August 21, 2025, the Company received $5,000 for the issuance of 10,000 flow-through shares at a price of $0.50 per share, with a flow-through premium deduction of $350. These shares were issued on September 12, 2025. (xii) On August 22, 2025, the Company issued 4,749,000 flow -through shares at a price of $0.50 per share, for gross proceeds of $2,374,500, with a flow -through premium deduction of $118,725, and 1,150,000 units, at a price of $0.50 per unit, for gross proceeds of $575,000. Each unit is comprised of one common share and one- half of one common share purchase warrant with each whole warrant exercisable for one common share at a price of $0.50 per common share until December 31, 2025, subject to an accelerated expiry clause, valued using the residual method at $28,750. In connection with the issuances, the Company paid $25,200 in cash finder's fees, and issued 218,320 compensation shares with a fair value of $103,702 based on the fair market value of $0.48 per share, and 268,720 compensation warrants with a fair value of $28,167 computed using the Black Scholes pricing model, exercisable at $0.50 per common share, until December 31, 2025, subject to an accelerated expiry clause. (xiii) On August 31, 2025, the Company issued 2,658,780 common shares upon the exercise of RSUs for services received from its directors, management and staff. The fair value of the RSUs on the grant date was computed as $771,046 and was reclassified upon exercise from contributed surplus to capital stock.
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 19 | Page (c) Omnibus Plan On July 26, 2023, the Omnibus Equity Incentive Plan (the “Omnibus Plan”) was approved and adopted by the Board, which was implemented on August 25, 2023. The Omnibus Plan was amended on July 24, 2024 and was subsequently amended and re -approved by shareholders on August 28, 2026 for a further three-year term ending August 28, 2029. Under the Omnibus Plan, eligible persons may be allocated a number of Awards as the board deems appropriate, with vesting provisions also to be determined by the board. Upon vesting, eligible participants are entitled to receive cash or common shares from treasury to satisfy all or any portion of a vested RSU award. The expiry date of options granted pursuant to the Omnibus Plan is set by the board and must not be later than ten years from the date of grant. The Omnibus Plan is a “rolling” share- based compensation plan pursuant to which the aggregate number of common shares reserved for issue under the Omnibus Plan may not exceed twenty percent (20%) of the common shares issued and outstanding at the time of option or RSU grant. (d) Restricted Share Units On March 1, 2026, the Company granted 1,975,000 RSUs to directors, management and consultants. The RSUs vest as follows: (i) 987,500 on August 31, 2026; and (ii) 987,500 on February 28, 2027. On July 10, 2026, the Company granted 51,134 RSUs to a director. The RSUs vest as follows: (i) 11,134 on August 31, 2026; and (ii) 40,000 on February 28, 2027. On July 10, 2026, the Company cancelled 30,525 RSUs held by a consultant following the consultant's resignation and accelerated the vesting of the remaining 16,475 RSUs. The following details the changes in outstanding RSUs for the six months ended August 31, 2025 and 2026: Number of RSUs Outstanding, February 28, 2025 - Granted during the period 2,658,780 Vested and exercised during the period (2,658,780) Outstanding, August 31, 2025 - Outstanding, February 28, 2026 - Granted during the period 2,026,134 Cancelled during the period (30,525) Vested and exercised during the period (991,609) Outstanding, August 31, 2026 1,004,000 For the six months ended August 31, 2026, the Company recorded $1,484,637 of share -based compensation related to the vesting of RSUs (2025 - $771,046).
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 20 | Page (e) Options On March 31, 2026, an officer of the Company was granted 300,000 options. The options vest at the rate of 25% every 6 months for two years following the date of grant. The options expire on December 29, 2028. On July 10, 2026, a director of the Company was granted 300,000 options with an exercise price of $2.00 per share. The options vest at the rate of 25% every 6 months for two years following the date of grant and expire on December 29, 2028. On July 12, 2026, the Board of Directors approved an extension of the expiry date of stock options held by a former consultant to the date that is one year after the date of termination on July 7, 2026, in accordance with the Company's Omnibus Equity Incentive Plan. The following details the changes in outstanding options for the six months ended August 31, 2025 and 2026: Number of Options Weighted Average Exercise Price $ Outstanding, February 28, 2025 8,500,000 0.37 Issued during the period - - Expired during the period (600,000) 0.65 Outstanding, August 31, 2025 7,900,000 0.35 Outstanding, February 28, 2026 7,650,000 0.72 Issued during the period 600,000 1.49 Exercised during the period (600,000) 0.53 Outstanding, August 31, 2026 7,650,000 0.79 The following is a summary of options outstanding and exercisable as of August 31, 2026: Expiry date Number of options outstanding Number of options exercisable Exercise price $ Life remaining December 29, 2026 150,000 150,000 0.40 0.33 April 16, 2027 250,000 250,000 0.40 0.63 July 10, 2027 150,000 150,000 0.40 0.86 December 29, 2028 1,800,000 1,800,000 0.40 2.33 December 29, 2028 4,700,000 1,175,000 0.90 2.33 December 29, 2028 300,000 - 0.98 2.33 December 29, 2028 300,000 - 2.00 2.33 7,650,000 3,525,000 For the six months ended August 31, 2026, the Company recorded $921,775 of share -based compensation related to the vesting of options (2025 - $93,922). The fair value of options issued was
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 21 | Page determined based on the Black Scholes pricing model, with the following weighted average inputs: Weighted Averages For the six months ended August 31, 2026 For the six months ended August 31, 2025 Share price $1.22 - Dividend yield Nil - Exercise price $1.49 - Risk-free interest rate 2.82% - Expected volatility 96.71% - Expected expiration 2.61 - (f) Warrants In April 2026, 2,169,911 warrants with an exercise price of $1.25 expired unexercised. On June 12, 2026, the Company issued 1,432,750 warrants as part of the issuance of units, with each warrant exercisable for one common share at a price of $2.50 until December 31, 2026, subject to an accelerated expiry date. The warrants are valued using the residual method at $558,773. The Company also issued 401,360 finders' warrants, with each warrant exercisable at a price of $ 2.50 per common share, until December 31, 2026, subject to an accelerated expiry date. The fair value of the 401,360 finders’ warrants was $59,470 computed using the Black Scholes pricing model. On July 10, 2026, the Company issued 178,325 warrants as part of the issuance of units, with each warrant exercisable for one common share at a price of $2.50 until December 31, 2026, subject to an accelerated expiry date. The warrants are valued using the residual method at $96,296. The Company also issued 14,040 finders' warrants, with each warrant exercisable at a price of $ 2.50 per common share, until December 31, 2026, subject to an accelerated expiry date. The fair value of the 14,040 finders’ warrants was $1,097 computed using the Black Scholes pricing model. The following details the changes in outstanding warrants for the six months ended August 31, 2025 and 2026: Number of warrants Weighted Average Exercise Price $ Outstanding, February 28, 2025 17,239,664 0.54 Issued during the period 3,525,601 0.50 Outstanding, August 31, 2025 20,765,265 0.53 Outstanding, February 28, 2026 7,243,850 0.94 Issued during the period 2,026,475 2.50 Expired during the period (2,169,911) 1.25 Exercised during the period (2,448,939) 1.25 Outstanding, August 31, 2026 4,651,475 1.31
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 22 | Page The following is a summary of warrants outstanding and exercisable as at August 31, 2026: Expiry date Number of warrants outstanding Number of warrants exercisable Exercise price $ Weighted average life remaining December 31, 2026 2,026,475 2,026,475 2.50 0.33 December 30, 2028 2,625,000 2,625,000 0.40 2.33 4,651,475 4,651,475 15. General and Administrative Expenses General and administrative expenses are comprised of the following: For the six months ended August 31, 2026 $ August 31, 2025 $ Office 137,005 22,076 Travel 362,618 126,403 IT and telecom expenses 112,129 487 Management fees 71,000 - Total 682,752 148,966 16. Related Party Transactions Related parties and related party transactions impacting the accompanying financial statements are summarized below and include transactions with the following individuals or entities: Key management personnel 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 executive and non-executive members of the Company’s Board of Directors and corporate officers. Key management personnel compensation is comprised of: For the three months ended For the six months ended August 31, 2026 $ August 31, 2025 $ August 31, 2026 $ August 31, 2025 $ Share based compensation 722,137 198,820 1,533,069 436,376 Financing fees - 232,804 - 332,578 Management fees 45,500 - 71,000 - 767,637 431,624 1,604,069 768,954
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 23 | Page There are no amounts owed to related parties as of August 31, 2026. The financing fees relate to the amortization of a prepaid financing expense arising from warrants issued to key management personnel and directors in connection with a $2.1 million revolving credit facility entered into on December 29, 2023. The vested warrants had a fair value of $798,188, which was capitalized as a prepaid financing expense and amortized over the term of the facility. As the facility expired on December 29, 2025 without being utilized, the remaining unamortized balance was fully expensed during the year ended February 28, 2026. On March 1, 2026, the Company granted 1,281,000 RSUs to directors and management. The RSUs vest as follows: (i) 640,500 on August 31, 2026; and (ii) 640,500 on February 28, 2027. On July 10, 2026, the Company granted 51,134 RSUs to a director, The RSUs vest as follows: (i) 11,134 on August 31, 2026; and (ii) 40,000 on February 28, 2027. On the same date, the director was granted 300,000 options with an exercise price of $2.00 per share. The options vest at a rate of 25% every 6 months for two years following the date of grant and expire on December 29, 2028. 17. Financial Instruments Financial instruments are agreements between two parties that result in promises to pay or receive cash or equity instruments. The Company classifies its financial instruments as follows: cash and cash equivalents, and investments at FVTPL and restricted cash and accounts payable at amortized cost . The carrying values of these instruments approximate their fair values due to their short term to maturity. Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of fair value hierarchy are: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 – Inputs that are not based on observable market data. The following table sets forth the Company’s financial assets measured at fair value by levels within the fair value hierarchy: As at August 31, 2026 Level 1 $ Level 2 $ Level 3 $ Total $ Cash and cash equivalents 19,949,271 19,949,271 Long-term investments 173,790 173,790
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 24 | Page The investments in Level 3 include the investment in privately held companies that are not quoted on an exchange. Management believes that the price of the shares in the investee’s most recent private placement approximates the fair value. The Company is exposed in varying degrees to a variety of financial instrument related risks: Credit risk Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company is exposed to a significant credit risk as its maximum exposure relates to cash and restricted cash totaling $20,039,271. The Company mitigates the credit risk of cash by depositing with only reputable financial institutions. The Company also assesses the credit quality of counterparties, taking into account their financial position, past experience and other factors. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company as at August 31, 2026, has $19,949,271 in cash and cash equivalents and $90,000 in restricted cash and $2,651,514 in financial liabilities, consisting of $1,774,867 in accounts payable and accrued liabilities, $ 129,401 in lease liabilities, and $747,246 in bridge loans, which represents the Company's maximum exposure to liquidity risk. The following table summarizes the Company’s financial liabilities as at August 31, 2026: Financial liabilities Due ≤ 1 year $ Due 2–5 years $ Total carrying amount $ Accounts payable and accrued liabilities 1,774,867 - 1,774,867 Lease liabilities (note 10) 89,475 39,926 129,401 Bridge loan (note 12) - 747,246 747,246 Total 1,864,342 787,172 2,651,514 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. The Company is not exposed to material market risk. (a) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 25 | Page The risk that the Company will realize a loss as a result of a change in the interest rate is low, as the Company has no investments or liabilities with variable interest rates. (b) Foreign currency risk Foreign currency risk is the risk that the fair value of future cash flows of the Company’s financial instruments will fluctuate as a result of changes in foreign exchange rates. As of August 31, 2026, a portion of the Company’s financial assets, comprising long-term investments, are held in Great British Pound (“GBP”). 1% change in the exchange rate would result in a change of net loss or gain by $1,738. In addition, a portion of the Company’s financial liabilities, comprising bridge loans, are held in Euro (“EUR”). 1% change in the exchange rate would result in a change of net loss or gain by $7,472. The impact of fluctuations in foreign exchange rates is not significant and, accordingly, a sensitivity analysis has not been provided. (c) Price risk Price risk is related to equity and commodity price risks. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. As the Company holds no significant equity or commodity related investments or assets, the Company has minimal exposure to price risk. 18. Capital Risk Management The Company considers its capital to be comprised of shareholders’ equity. 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 new shares. Although the Company has been successful at raising funds in the past through the issuance of capital stock, it is uncertain whether it will continue this method of financing due to the current difficult market conditions. In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. Management reviews the capital structure on a regular basis to ensure that the above objectives are met. There have been no changes to the Company’s approach to capital management during the period ended August 31, 2026. The Company is not subject to externally imposed capital requirements. 19. Segmented Information The Company has one operating segment involved in the exploration of mineral properties. All of the Company's operations and long-lived assets are in Canada.
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 26 | Page 20. Government Grants and Tax Credits The following table summarizes the Company’s taxes recoverable and government grants and tax credits receivable: As at August 31, 2026 As at February 28, 2026 $ $ Mining tax credits receivable 2,336,013 1,799,625 Government grants receivable 1,463,356 410,371 GST/HST/QST recoverable 1,212,167 1,138,188 Total tax credits/grants receivable 5,011,536 3,348,184 The Company is entitled to refundable mining tax credits on qualified exploration expenditures incurred in Quebec. Promotion Saguenay On December 5, 2024, the Company was awarded a $75,000 grant from Promotion Saguenay to reimburse eligible expenses related to a feasibility study for the construction of an iron phosphate plant. In the year ended February 28, 2025, $37,500 had been recognized by the Company as government grant income within other income on the condensed interim consolidated statements of loss and comprehensive loss. During six months ended August 31, 2026, the remaining $37,500 was received and recognized by the Company as government grant income on the condensed interim consolidated statements of loss and comprehensive loss. National Resources Canada (“NRCan”) On March 4, 2026, the Company executed a definitive contribution agreement with NRCan for funding related to a feasibility study for the production of lithium -iron-phosphate cathode active material and received approval for the reimbursement of up to $16,717,722 of eligible expenditures incurred between January 9, 2026 and March 31, 2028. For the year ended February 28, 2026, the Company recorded claims under this grant of $410,371, of which $410,371 has been received. During the six months ended August 31, 2026, the Company recorded claims under this grant of $2,034,893 (August 31, 2025 - $nil), of which $695,654 has been received. The amount has been recognized by the Company as government grant income on the condensed interim consolidated statements of loss and comprehensive loss. As at August 31, 2026, the remaining $14,272,45 8 has not been accrued as a receivable as the Company has determined that there is still collection uncertainty at the reporting date. First and Last Mile Fund (“CMIF”) On July 27, 2026, the Company executed two non- repayable contribution agreements with NRCan under the First and Last Mile Fund program. The first a greement supports the electrical transmission line for the sustainable exploitation of the Begin -Lamarche phosphate deposit and provides a
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 27 | Page contribution equal to the lesser of 50% of total eligible project expenditures and $3,071,587, for eligible expenditures incurred between April 1, 2026 and March 31, 2030. The second agreement supports the road infrastructure for the same deposit and provides a contribution equal to the lesser of 50% of total eligible project expenditures and $1,771,350, for eligible expenditures incurred between April 1, 2026 and March 31, 2029. During the six months ended August 31, 2026, the Company recorded a receivable of $124,117 (August 31, 2025 - $nil) for amounts expected to be recoverable under these agreements, of which $nil has been received. The following details the changes in refundable tax credits and government grants receivable: For the six months ended August 31, 2026 $ For the year ended February 28, 2026 $ Tax credits/grants receivable, beginning of the period 2,209,996 1,244,955 Mining tax credits accrued 536,388 1,799,625 Grants accrued 2,196,510 412,871 Tax credits received - (1,244,955) Grants received (1,143,525) (2,500) Tax credits/grants receivable, end of the period 3,799,369 2,209,996 21. Commitments (a) Pekuakamiulnuatsh First Nation Agreement On April 9, 2024, the Company entered into a collaboration agreement with the Pekuakamiulnuatsh First Nation (“PFN”) (the “Collaboration Agreement”). The Collaboration Agreement is intended to establish the respective commitments of both parties with respect to exploration and development activities at the Company’s mineral properties. The Collaboration Agreement remains in effect until the earlier of a) the signing of an Impact and Benefit Agreement (“IBA”); or b) the dissolution by mutual written consent of both parties. Upon signing the Collaboration Agreement, the Company issued 100,000 common shares to PFN as a good- faith payment. Each year, 2.5% of the expenses related to the exploration and development activities carried out (drilling and related work) on the mineral properties is to be paid to PFN in the form of common shares of the Company based on the market price of the common shares on December 31 of the year in question and payable by January 20 of the following year. Until the IBA is signed, the Company is to issue a minimum payment of 100,000 common shares per calendar year payable by January 15 of the current year. During the year ended February 28, 2026, the Company issued 240,132 common shares to PFN in satisfaction of the 2025 annual expenses and minimum payment for 2026, and accrued $100,126 for shares to be issued based on relevant expenses incurred. For the six months ended August 31, 2026, the Company accrued $233,990 for shares to be issued based on relevant expenses incurred. (b) Technology Licensing Agreement On November 25, 2024, the Company entered into a technology licensing agreement (the “Technology Agreement”) with an arm’s length party to license certain technologies (the “Technology”) related to the production of phosphoric acid at a cost to the Company of €100,000.
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 28 | Page As at February 28, 2026, the signing fee of €100,000 had been fully paid. Upon the satisfaction of certain conditions, the Company is to have an option to acquire the non- exclusive rights to utilize the Technology for a further payment of €3,000,000. If annual production of phosphoric acid using the Technology exceeds contractual thresholds, the Company is to pay an additional fee of €500 per metric ton of excess production. (c) Land Option Agreement On July 17, 2025, the Company entered into a land option agreement (the "Option Agreement") with the Saguenay Port Authority (the "Port") under which the Port granted the Company an exclusive option to enter into a definitive long-term industrial lease for two parcels of land owned by the Port within the Saguenay Industrial and Port Zone (the "Phase 1 Site" and the "Phase 2 Site"). The option is intended to secure the land required for the Company's planned purified phosphoric acid plant. The Option Agreement is valid from the date of signature until December 31, 2027, subject to extension by mutual written agreement for additional periods of three months. Option fees in respect of the Phase 1 Site are payable as follows: (i) from signature to December 31, 2025, $nil; (ii) for the 2026 calendar year, the fee is $0.50 per m² per year, subject to annual indexation and payable quarterly in advance; and (iii) for the 2027 calendar year, the fee is $1.00 per m² per year, subject to annual indexation and payable quarterly in advance. For the six months ended August 31, 2026, the Company recorded $102,737 in research and development expenses on the condensed interim consolidated statements of loss and comprehensive loss. Amounts payable under the option agreement as at August 31, 2026 are $nil. The option fee for the Phase 2 Site is free of charge until the Company exercises its option or right of first refusal over that site, at which point it becomes payable at the rate then in force. The Company's ability to maintain the option beyond June 30, 2026 was conditional on demonstrating to the Port that US$15 million of financing dedicated to the project had been secured. During the six months ended August 31, 2026, the Company secured adequate financing to satisfy this condition. The Company's ability to maintain the option beyond December 31, 2026 remains conditional upon demonstrating that total financing of US$37 million has been secured and that the licensing, feasibility and authorization milestones set out in the agreement have been completed or are in progress. No later than September 1, 2027, the Company must notify the Port whether it is exercising the option to negotiate a long-term lease, to be entered into no later than January 1, 2028. Option fees paid are non-refundable and do not constitute rent or an advance on rent. (d) Ultion Technologies Agreement On November 7, 2025, the Company agreed to Phase 1 of a three‑phase proposal dated November 6, 2025 from Ultion Technologies Inc. ("Ultion") for the feasibility, design, equipment sourcing, and start‑up of a LFP CAM production plant in North America. Phase 1 covers feasibility work and preparation of the technology document package for a total cost of US$650,000, payable as to US$350,000 upon approval of Phase 1 and US$300,000 upon
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FIRST PHOSPHATE CORP. Notes to the Condensed Interim Consolidated Financial Statements August 31, 2026 (Expressed in Canadian Dollars) (Unaudited) 29 | Page finalization of the feasibility information and preparation and secure storage of all technology documents. The Company has paid US$350,000 upon approval of Phase 1 in the year ended February 28, 2026 and paid the remaining US$300,000 upon finalization of the Phase 1 deliverables in the three months ended May 31, 2026, for total payments of US$650,000. Phases 2 and 3 of the proposal, which relate to detailed engineering design and equipment sourcing and to plant start‑up and operations, are estimated by Ultion at US$5.65 million plus optional services and US$1.5 million, respectively. Each remains subject to separate written acceptance by the Company and, as at August 31, 2026, had not been approved or committed to. Accordingly, no obligation in respect of Phases 2 and 3 has been recognized or is included in the commitment above. 22. Subsequent Events On September 1, 2026, the Company cancelled 61,500 RSUs held by a consultant. On September 2, 2026, the Company incorporated a wholly owned subsidiary, 1606684 B.C. Ltd. On September 9, 2026, the Company acquired a cottage and related leasehold rights located in Québec for consideration of $324,273.