Mr. Nick Brigman reports

EDGE TOTAL INTELLIGENCE ANNOUNCES AMENDED AND RESTATED Q2 2026 FINANCIAL STATEMENTS AND MD&A

Further to the Oct. 2, 2026, news release, Edge Total Intelligence Inc. has filed amended and restated unaudited interim financial statements for the three and six months ended June 30, 2026, and related management's discussion and analysis, replacing the filings made on Aug. 31, 2026.

The amended filings reflect the following corrections and adjustments. All amounts are in U.S. dollars.

• Austal acquisition accounting: Following an updated independent valuation, the company revised the acquisition date values of acquired intangible assets and shares issued, recognized contingent consideration of $2,441,185, and adjusted related amortization. For both the three and six months ended June 30, 2026, these changes resulted in $41,198 of accretion expense, a $529,719 fair value gain on contingent consideration and a $36,944 reduction in cost of sales.
• Impairment: Austal's June, 2026, notice that development contracts would not be renewed was an impairment indicator not fully reflected in the original second quarter filings. The company recorded a non-cash impairment of $5,134,044 for both the three and six months ended June 30, 2026, reducing the carrying amounts of the acquired Austal technology and associated goodwill to nil. This updates the approximately $2.3-million estimate disclosed on Oct. 2, 2026, following revised acquisition accounting and related amortization adjustments.
• Derivative valuation: Revised assumptions concerning the timing and likelihood of a qualifying U.S. listing increased the convertible debenture derivative liability by $153,101 to $969,509 as at June 30, 2026, and reduced the fair value gain by the same amount for both the three and six months ended June 30, 2026.
• Classification corrections: Revenue of $980,984 and $2,023,507 for the three and six months ended June 30, 2026, respectively, was reclassified from subscription software licences to professional consulting services. Employee costs of $20,325 for both periods were reclassified to administrative expenses, employee-related liabilities of $184,783 as at June 30, 2026, were grouped within accounts payable and accrued liabilities, and the related $56,648 non-cash movement for the six-month period was reclassified within changes in operating working capital. These changes did not affect total revenue, total expenses, net loss or operating cash flows.

The adjustments above increased loss before income taxes and net loss and comprehensive loss by $4,761,680 for both the three and six months ended June 30, 2026. Loss before income taxes increased from $1,728,936 to $6,490,616 for the three-month period and from $3,790,352 to $8,552,032 for the six-month period. Restated net loss and comprehensive loss were $6,375,474 and $8,387,448, respectively. Basic and diluted loss per share increased from three cents to 10 cents and from six cents to 14 cents, respectively.

As at June 30, 2026, compared with the originally reported amounts, total assets decreased by $2,311,731 to $8,991,145, total liabilities increased by $2,105,765 to $15,928,366 and shareholders deficiency increased by $4,417,496 to $6,937,221. Working capital changed from a $843,895 surplus to a $1,108,769 deficiency. Cash of $5,844,924 and operating cash outflow of $1,493,098 for the six months ended June 30, 2026, were unchanged by the restatement.

Please refer to Note 26 of the amended and restated condensed consolidated interim financial statements for the three and six months ended June 30, 2026, and 2025, for full details. The financial statements are unaudited and have not been reviewed by the company's independent auditor.

RedChip Companies Inc. engagement update

Further to the company's news release dated Sept. 18, 2026, the company announces that it has entered into addendums to the engagement letter with RedChip dated Aug. 24, 2026, clarifying certain matters relating to the 5,000 equity incentive stock options to purchase subordinate voting shares of the company to be granted to RedChip pursuant to the engagement. The minimum exercise price of the options to be granted to RedChip must not be less than the discounted market price (as defined in the policies of the TSX Venture Exchange). Furthermore, the options will expire five years from grant and shall be exercisable on a cashless basis at RedChip's election. For so long as the company is listed on the TSX Venture Exchange, the options will vest in stages over a period of not fewer than 12 months such that: (i) no more than one-fourth of the options vests no sooner than three months after the options were granted; (ii) no more than another one-fourth of the options vests no sooner than six months after the options were granted; (iii) no more than another one-fourth of the options vests no sooner than nine months after the options were granted; and (iv) the rest of the options vests no sooner than 12 months after the options were granted. If the company is no longer listed on the TSX Venture Exchange when the options are granted, then, subject to any applicable securities laws and exchange rules then applicable to the company and the options, the options will fully vest 30 calendar days after the date the SVSs first trade on the Nasdaq Stock Market or the New York Stock Exchange.

The company confirms that addendum No. 2 to the engagement letter has been fully executed by both parties.

About Edge Total Intelligence Inc.

edgeTI provides operational intelligence software and solutions for defence, maritime, manufacturing, critical infrastructure and government organizations whose systems by design cannot be consolidated. Its edgeCore platform creates a unified, real-time operational picture and enables governed action across those systems, with approvals, controls and evidence preserved. Customer data remain in place and under the customer's control. Having attained technology readiness Level 9, edgeTI solutions have been authorized to operate and deployed in classified environments. edgeTI is headquartered in Arlington, Va., with operations in the United States, Canada, Australia and Serbia.

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