Financial statements
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Highcliff Metals Corp. Condensed Interim Financial Statements For the three months ended July 31, 202 6 and 2025 (Unaudited - Expressed in Canadian dollar s)
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NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim financial statements have been prepared by and are the responsibility of management. The Company's independent auditor has not performed a review of these financial statements in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.
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Highcliff Metals Corp. Condensed Interim Statements of Financial Position As at July 31, 2026 and April 30, 2026 (Unaudited - Expressed in Canadian dollars) The accompanying notes are in integral part of these condensed interim financial statements. 3 Notes July 31, 2026 $ April 30, 2026 $ Assets Current assets Cash 772,310 105,453 Receivables 1,086 312 Prepaids 833 833 Tax indemnity agreement 6 1,802,441 1,750,407 Total assets 2,576,670 1,857,005 Liabilities Current liabilities Accounts payable and accrued liabilities 8 39,429 49,069 Other tax liability 6 2,002,713 1,944,897 Total liabilities 2,042,142 1,993,966 Shareholders’ deficit Share capital 7 23,611,883 22,917,991 Contributed surplus 1,862,766 1,862,766 Accumulated other comprehensive loss (“AOCL”) (22,718) (22,718) Deficit (24,917,403) (24,895,000) Total shareholders’ equity (deficit) 534,528 (136,961) Total liabilities and shareholders’ equity (deficit) 2,576,670 1,857,005 Nature of Operations (Note 1) Going Concern (Note 2) On behalf of the Board “John Theobald” Director “W. Barry Girling” Director .
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Highcliff Metals Corp. Condensed Interim Statements of Loss and Comprehensive Loss For the three months ended July 31, 2026 and 2025 (Unaudited - Expressed in Canadian dollars) The accompanying notes are in integral part of these condensed interim financial statements. 4 Notes 2026 $ 2025 $ Operating expenses General and miscellaneous 5,891 5,952 Professional fees 8 11,381 8,349 Loss for the period before other items (17,272) (14,301) Other income (expense) items Foreign exchange loss (5,764) (436) Interest income 633 231 Loss and comprehensive loss for the period (22,403) (14,506) Total loss per share – basic and diluted 7(d) (0.00) (0.00) Weighted average number of shares outstanding – basic and diluted 9,909,092 6,101,933
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Highcliff Metals Corp. Condensed Interim Statements of Cash Flows For the three months ended July 31, 2026 and 2025 (Unaudited - Expressed in Canadian dollars) The accompanying notes are in integral part of these condensed interim financial statements. 5 2026 $ 2025 $ Operating activities Net loss for the period (22,403) (14,506) Items not involving cash: Unrealized foreign exchange loss 5,782 435 Changes in non-cash operating working capital items: Receivables (774) 595 Accounts payable and accrued liabilities (9,640) (54,810) Cash flows used in operating activities (27,035) (68,286) Financing activities Proceeds from issuance of shares 700,039 249,996 Share issuance costs (6,147) (1,975) Cash flows provided by financing activities 693,892 248,021 Increase in cash 666,857 179,735 Cash, beginning of the period 105,453 7,575 Cash, end of the period 772,310 187,310
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Highcliff Metals Corp. Statements of Changes in Shareholders’ Equity (Deficit) For the three months ended July 31, 2026 and 2025 (Unaudited - Expressed in Canadian dollars) The accompanying notes are in integral part of these condensed interim financial statements. 6 Number of shares # Share capital $ Contributed surplus $ AOCL $ Deficit $ Total Equity (deficit) $ Balance as at April 30, 2025 4,668,265 22,674,931 1,862,766 (22,718) (24,796,495) (281,516) Share issuance for cash 4,166,598 249,996 - - - 249,996 Share issuance costs - (1,975) - - - (1,975) Loss for the period - - - - (14,506) (14,506) Balance as at July 31, 2025 8,834,863 22,922,952 1,862,766 (22,718) (24,811,001) (48,001) Share issuance costs - (4,961) - - - (4,961) Loss for the period - - - - (83,999) (83,999) Balance as at April 30, 2026 8,834,863 22,917,991 1,862,766 (22,718) (24,895,000) (136,961) Share issuance for cash 8,235,758 700,039 - - - 700,039 Share issuance costs - (6,147) - - - (6,147) Loss for the period - - - - (22,403) (22,403) Balance as at July 31, 2026 17,070,621 23,611,883 1,862,766 (22,718) (24,917,403) 534,528
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Highcliff Metals Corp. Notes to the Condensed Interim Financial Statements For the three months ended July 31, 2026 and 2025 (Unaudited - Expressed in Canadian dollars) 7 1. NATURE OF OPERATIONS Highcliff Metals Corp. (the “Company”) was incorporated under the laws of British Columbia, Canada, in 1984. In 2004, we changed our corporate jurisdiction from a British Columbia company to a Canadian corporation. On April 5, 2023 the Company changed its name to Highcliff Metals Corp. from I-Minerals Inc. and continued into British Columbia. The Company is listed for trading on the TSX Venture Exchange NEX board under the symbol “HCM” and the OTC Pink Market under the symbol “IMAHF”. The Company’s principal business focus is to identify, evaluate, and acquire new commercial business opportunities or mineral exploration assets. 2. GOING CONCERN These financial statements have been prepared on a going concern basis, which assumes that the Company will be able to meet its obligations and continue its operations for the foreseeable future. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material. At July 31, 2026, the Company had not yet achieved profitable operations, had an accumulated deficit of $24,917,403 since inception and expects to incur further losses in the development of its business. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. At July 31, 2026, the Company had working capital of $534,528. The above factors cast significant doubt upon the Company’s ability to continue as a going concern and, therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business. 3. BASIS OF PRESENTATION AND MATERIAL ACCOUNTING POLICIES These condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34 – Interim Financial Reporting. These condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended April 30, 2026 which have been prepared in accordance with IFRS as issued by the IASB. In the preparation of these condensed interim financial statements, the Company has used the same accounting policies and methods of computation as in the annual financial statements for the year ended April 30, 2026. Unless otherwise stated, all dollar amounts are in Canadian dollars. These condensed interim financial statements were approved by the Board of Directors on September 23, 2026. 4. NEW AND FUTURE ACCOUNTING STANDARDS AND PRONOUNCEMENTS Certain accounting standards or amendments to existing accounting standards that have been issued that are not mandatory for the current period and have not been early adopted.
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Highcliff Metals Corp. Notes to the Condensed Interim Financial Statements For the three months ended July 31, 2026 and 2025 (Unaudited - Expressed in Canadian dollars) 8 Amendments to IFRS 9 and IFRS 7 - Amendments to the Classification and Measurement of Financial Instruments In May 2024, the International Accounting Standards Board (“IASB”) issued Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7). These amendments updated classification and measurement requirements in IFRS 9 Financial Instruments and related disclosure requirements in IFRS 7 Financial Instruments: Disclosures. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, inclu ding financial assets that have environmental, social and corporate governance (“ESG”)-linked features and other similar contingent features. The IASB added disclosure requirements for financial instruments with contingent features that do not relate dire ctly to basic lending risks and costs and amended disclosures relating to equity instruments designated at fair value through other comprehensive income. The amendments are effective for annual periods beginning on or after January 1, 2026, with early application permitted. The adoption of these amendments did not have a material impact on the Company’s financial statements. IFRS 18 – Presentation and Disclosure in Financial Statements In April 2024, the IASB issued IFRS 18, Presentation and Disclosure of Financial Statements (IFRS 18), which replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by requiring income and ex penses to be presented into the three defined categories of operating, investing and financing, and by specifying certain defined totals and subtotals. Where company -specific measures related to the income statement are provided, IFRS 18 requires companie s to disclose explanations around these measures, which are referred to as management-defined performance measures. IFRS 18 also provides additional guidance on principles of aggregation and disaggregation which apply to the primary financial statements and the notes. Retrospective application is required, and early application is permitted. The standard is effective for annual reporting periods beginning on or after January 1, 2027, with early application permitted. Management is currently assessing the effect of the standard on the Company’s financial statements. 5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of the condensed interim financial statements requires management to use judgement in applying its accounting policies and estimates and assumptions about the future. Estimates and other judgements are continuously evaluated and are based on management’s experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. Critical accounting estimates and judgements: (i) The assumption that the Company is a going concern and will continue in operation for the foreseeable future and at least one year. The factors considered by management are disclosed in Note 2. (ii) The estimated value of the potential withholding tax liability and related tax indemnity asset as disclosed in Note 6. The Company estimated the fair value of the tax indemnity asset to be equal to ninety percent of the book value of the withholding tax liability. This estimate requires considerable judgement, as there is no observable market for an indemnification asset such as this. The value is subject to variability, as the Company is reliant on the Lender to abide by the term of the indemnification agreement. There are collection risks associated with the tax indemnity agreement, that may impact the fair value of the asset.
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Highcliff Metals Corp. Notes to the Condensed Interim Financial Statements For the three months ended July 31, 2026 and 2025 (Unaudited - Expressed in Canadian dollars) 9 6. TAX INDEMNITY AGREEMENT The Company had promissory notes due to BV Lending, LLC, a company controlled by a former director of the Company (the “Lender”). The promissory notes began on September 19, 2012 and were amended numerous times to increase the amount of principal availabl e under the promissory notes and to extend the maturity date. Prior to April 30, 2021, the interest rate was between 12 -14% per annum and since May 1, 2021 the interest rate was 0.13% per annum. The final amending agreement extended the maturity date to March 10, 2023. The promissory notes were collateralized by the Company’s Helmer -Bovill Property. On March 6, 2023, the promissory notes and accrued interest of US$36,186,579 ($49,268,028) were settled as part of the sale of subsidiary transaction, which included the Helmer-Bovill Property. The Company determined that accrued interest on the promissory notes may be subject to withholding taxes as the Lender controlled over 25% of the common shares of the Company and the Company’s debt to equity ratio exceeded certain statutory limits that caused interest expense deductibility to be partially restricted. Any withholding taxes payable would be based on the amount of restricted interest, when such interest is paid or at the end of a fiscal year. As at July 31, 2026, the Company had recorded accrued withholding tax on the deemed dividends of US$896,756 ($1,258,060) (April 30, 2026 - US$896,756 ($1,221,740)) and accrued penalties and interest of US$530,796 ($744,653) (April 30, 2026 - US$530,796 ($723,157)). As at July 31, 2026 , the balance of any potential withholding tax liability including penalties and interest was US$1,427,552 ($2,002,713) (April 30, 2026 - US$1,427,552 ($1,944,897)). On July 28, 2022, the Company entered into a Tax Indemnity Agreement with the Lender transferring the obligation to pay the tax liability from the Company to the Lender, whereby the Lender agreed to administer and pay any liability arising from any Canada Revenue Agency (“CRA”) inquiry. The value of the Tax Indemnity Agreement is the same as the potential withholding taxes, penalties and interest. The Company remains responsible for potential CRA liability and there is a risk associated with the Tax Indemnity Agreement. The Company is reliant on the Lender to reimburse the Company for any potential liability to the CRA . The Company has recorded the Tax Indemnity Agreement fair value as ninety percent of the value of the potential withholding taxes, penalties and interest. The estimated collectability risk is a significant judgement and estimate (Note 5). During the three months ended July 31, 2026, the Company recorded interest of $nil (2025 –$nil). During the three months ended July 31, 2026, the Company recorded a change in fair value of Tax Indemnity Agreement of $nil (2025 – $nil). At July 31, 2026, the fair value of the Tax Indemnity Agreement was US$ 1,284,797 ($1,802,441) (April 30, 2026 – US$1,284,797 ($1,750,407)). 7. SHARE CAPITAL a) Authorized Unlimited number of common shares, without par value. The holders of common shares are entitled to receive dividends which are declared from time to time, and are entitled to one vote per share at meetings of the Company. All shares are ranked equally with regards to the Company’s residual assets.
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Highcliff Metals Corp. Notes to the Condensed Interim Financial Statements For the three months ended July 31, 2026 and 2025 (Unaudited - Expressed in Canadian dollars) 10 b) Financings During the three months ended July 31, 2026, the Company completed the following equity financings: • On July 20, 2026, the Company completed a non -brokered private placement of 8,235,758 common shares at a price of $0.085 per share for gross proceeds of $700,039. The Company incurred $6,147 in share issuance costs, which are attributable to legal costs to complete the private placement. During the three months ended July 31, 2025, the Company completed the following equity financings: • On June 30, 2025 the Company completed a non-brokered private placement of 4,166,598 common shares at price of $0.06 per share for gross proceeds of $249,996. The Company incurred $1,975 in share issuance costs, which are attributable to legal costs and filing fees to complete the private placement. c) Stock options The Company has an established Stock Option Plan (the “Plan”) for when it grants stock options. The Plan provides that the directors of the Company may grant options to purchase common shares to directors, officers, employees and service providers of the Company on terms that the directors of the Company may determine are within the limitations se t forth in the Plan. The maximum number of shares available under the Plan is limited to 10% of the issued common shares. The maximum term of stock options is ten years. All stock options vest on the date of grant, unless otherwise stated. As at July 31, 2026, the Company had 1,707,062 stock options available for grant pursuant to the Plan (April 30, 2026 – 883,486). As at July 31, 2026, the Company does not have outstanding and exercisable options. d) Basic and diluted loss per share During the three months ended July 31, 2026 , the potentially dilutive common shares totaling nil ( 2025 – nil) were not included in the calculation of basic and diluted loss per share because their effect was anti-dilutive. 8. RELATED PARTY TRANSACTIONS During the three months ended July 31, 2026, $2,850 (2025 - $2,025) was charged by Malaspina Consultants Inc. for the services of Matt Anderson, CFO, and are included in professional fees. Included in accounts payable and accrued liabilities are amounts owed to directors or officers or companies controlled by them. As at July 31, 2026 , the amount was $8,704 (April 30, 2026 - $10,194). All amounts are non -interest bearing, unsecured, and due on demand.