Exhibit 99.1 

Liberty Defense Holdings, Ltd.

Condensed Interim Consolidated Financial Statements

(Unaudited)

For the Three Months and Six Months Ended June 30, 2026 and 2025

Prepared by Management

(Expressed in U.S. dollars)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Liberty Defense Holdings Ltd.

Results of Review of Interim Financial Statements

We have reviewed the condensed interim consolidated statement of financial position of Liberty Defense Holdings Ltd.. as of June 30, 2026, and the related condensed statements of loss and comprehensive loss for the three and six month periods ended June 30, 2026 and 2025, and changes in shareholder’s equity (deficiency), and cash flows for the six month periods ended June 30, 2026 and 2025, and the related notes (collectively referred to as the “interim financial information or statements”). Based on our reviews, we are not aware of any material modifications that should be made to the interim financial statements for them to be in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated statement of financial position of Liberty Defense Holdings Ltd. and subsidiaries as of December 31, 2025, and the related consolidated statements of loss and comprehensive loss, changes in shareholders’ deficiency, and cash flows for the year then ended (not presented herein); and in our report dated April 29, 2026, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial position as of December 31, 2025, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company’s management. We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"). We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ DAVIDSON & COMPANY LLP

August 14, 2026

LIBERTY DEFENSE HOLDINGS, LTD.

Responsibility For Unaudited Condensed Interim Consolidated Financial Statements
For the Three Months and Six Months Ended June 30, 2026 and 2025

The accompanying unaudited condensed interim consolidated financial statements of Liberty Defense Holdings, LTD. and all information in this financial report are the responsibility of the Board of Directors and Management. The interim unaudited condensed consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), including International Accounting Standard (“IAS”) 34 – Interim Financial Reporting and, where appropriate, include management’s best estimates an judgements. Management maintains a system of internal control designed to provide reasonable assurance that assets are safeguarded from loss or unauthorized use, and that financial information is timely and reliable. However, any system of internal control over financial reporting, no matter how well designed and implemented, has inherent limitations and may not prevent or detect all misstatements. The Board of Directors is responsible for reviewing and approving the unaudited condensed interim consolidated financial statements. The Board of Directors carries out this responsibility principally though its Audit Committee. The Board of Directors appoints the Audit Committee, and all of its members are independent directors. The Audit Committee meets periodically with Management and the auditors to review internal controls, audit results, accounting principles and related matters. The Board of Directors approves the unaudited condensed interim consolidated financial statements on recommendation form the Audit Committee.

Liberty Defense Holdings, Ltd.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited - Expressed in U.S. dollars)

Nature of operations and going concern (note 1)

Subsequent events (note 25)

Approved on behalf of the Board of Directors:

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Liberty Defense Holdings, Ltd.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(Unaudited - Expressed in U.S. dollars, except number of shares)

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Liberty Defense Holdings, Ltd.

Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (Deficiency)

(Expressed in U.S. dollars, except number of shares)

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Liberty Defense Holdings, Ltd.

Condensed Interim Consolidated Statements of Cash Flows

(Unaudited - Expressed in U.S. dollars)

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

Liberty Defense Holdings, Ltd. (“Liberty” or the “Company”) is a publicly traded company listed on NASDAQ (NASDAQ: DETX), the TSX Venture Exchange (TSXV: SCAN), the Frankfurt Stock Exchange (Frankfurt: L2D), and the OTCQB (OTCQB: LDDFF). The Company was incorporated under the Business Corporations Act (Ontario) on June 8, 2012. On July 27, 2020, Liberty continued its jurisdiction of incorporation from Ontario to British Columbia and is now governed by the Business Corporations Act (British Columbia).

The Company’s registered and records office is located at 1055 West Georgia Street, Suite 1500, Royal Centre, P.O. Box 11117, Vancouver, British Columbia, V6E 4N7, Canada. Its head office is located at 187 Ballardvale Street, Suite 110, Wilmington, Massachusetts, 01887, USA.

The Company is engaged in the development and commercialization of advanced security detection technologies. Liberty’s flagship product, HEXWAVE, utilizes millimeter wave technology and advanced 3D imaging to detect concealed threats. In addition to HEXWAVE, the Company has licensed High-Definition Advanced Imaging Technology (HD-AIT) for body and shoe scanning.

Going concern

These unaudited condensed interim consolidated financial statements have been prepared using IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. During the six months ended June 30, 2026, the Company incurred a net loss of $4,928,415 and had cash outflows from operating activities of $7,966,878. 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. These events and conditions indicate that a material uncertainty exists that might cast significant doubt upon the Company’s ability to continue as a going concern.

These unaudited condensed interim consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated statement of financial position classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material.

These unaudited condensed interim consolidated financial statements have been prepared in conformity with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, using the same accounting policy information as detailed in the Company’s audited annual consolidated financial statements for the year ended December 31, 2025, and do not include all the information required for full annual financial statements in accordance with IFRS Accounting Standards (“IFRS”), as issued by the International Accounting Standards Board ("IASB"). It is suggested that these financial statements be read in conjunction with the annual audited consolidated financial statements.

These condensed interim consolidated financial statements were approved for issuance by the Board of Directors on August 14, 2026.

These condensed interim consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

Effective April 23, 2026, the parent company changed its functional currency from the Canadian dollar ("CAD") to the U.S. dollar ("USD"). Management determined that, following the completion of the Company's initial public offering and NASDAQ listing on April 23, 2026, the USD became the currency of the primary economic environment in which the Company operates. The change in functional currency was accounted for prospectively from the date of the change in accordance with IAS 21, The Effects of Changes in Foreign Exchange Rates.

The presentation currency of these condensed interim consolidated financial statements is the USD. Accordingly, references to "$" or "USD" are to U.S. dollars and references to "CAD$" are to Canadian dollars.

These condensed interim consolidated financial statements include the financial statements of Liberty Defense Holdings, Ltd., and the entities controlled by the Company (its subsidiaries), as follows:

Control exists when the Company has power over an investee, exposure, or rights, to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the Company’s returns. All intercompany balances and transactions have been eliminated upon consolidation.

The preparation of financial statements in conformity with IFRS, requires management to select accounting policies and make estimates and judgments that may have a significant impact on the consolidated financial statements. Estimates are continuously evaluated and are based on management’s experience and expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The Company’s critical accounting judgements and estimates were presented in Note 2 of the annual audited consolidated financial statements and have been consistently applied in the preparation of these condensed interim consolidated financial statements. No new estimates and judgements were applied for the period ended June 30, 2026.

These condensed interim consolidated financial statements do not include all note disclosures required by IFRS for annual financial statements and, therefore, should be read in conjunction with the audited financial statements for the year ended December 31, 2025. 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 June 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

Effective April 23, 2026, the Company changed its functional currency from CAD to USD as a result of changes in the underlying transactions, events and conditions relevant to the Company. In accordance with IAS 21, the change was applied prospectively from the date of the change. On April 23, 2026, all assets, liabilities and equity balances were translated into USD using the exchange rate in effect on that date, and those translated amounts became the historical carrying amounts in the Company's new functional currency. The change in functional currency did not result in the recognition of a cumulative translation adjustment.

Derivative financial liabilities are initially recognized at fair value and subsequently measured at fair value through profit or loss at each reporting date.

The Company provides credit to its customers in the normal course of business and has mitigated this risk by managing and monitoring the underlying business relationships. The Company recognized $nil in expected credit losses during the six months ended June 30, 2026 (December 31, 2025 - $13,910).

Accounts payable of the Company relates to amounts owed to suppliers for goods and services, as well as vendors in relation to legal services, consulting, and credit cards payable. Accrued liabilities of the Company are principally comprised of amounts professional fees, payroll-related obligations, professional fees, royalties, warranty provision, and other expenses incurred but not yet invoiced as of the reporting date.

Amounts payable to Viken were originally due within 120 days and bore interest at a rate of 1.5% per month on overdue balances. As at June 30, 2026, the amount payable to Viken was $nil (December 31, 2025 – $510,000). On March 19, 2026, the parties entered into an amendment requiring the Company to repay the outstanding balance on the earlier of the date the Company’s common shares commenced trading on the Nasdaq Stock Market and March 31, 2026. The amendment also resulted in the recognition of $93,379 of interest expense, increasing the total amount payable to $603,379.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

During the six months ended June 30, 2026, the Company recognized an impairment expense of $332,193 (June 30, 2025 - $136,693).

During the six months ended June 30, 2026, the Company expensed $585,852 of inventory to HEXWAVE cost of revenue (June 30, 2025, $751,114).

During the six months ending June 30, 2026, the Company recognized $42,833 of warranty provision expense to HEXWAVE cost of revenue (June 30, 2025, $35,724).

During the six months ending June 30, 2026, the Company recorded $68,707 of amortization capitalized to inventory (June 30, 2025, $54,245).

The continuity of the Company’s property and equipment is as follows:

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

During the six months ended June 30, 2026, equipment depreciation recorded to cost of revenue was $2,536 (December 31, 2025 - $126,568).

During the year ended December 31, 2025, the Company disposed of assets with a carrying value of $8,453 for $nil proceeds.

The continuity of the Company’s intangible assets is as follows:

Intangible assets including MIT license and Battelle license, encompassing payments in connection to reimbursement of global patent filing costs and annual maintenance fees. Additionally, intellectual property was generated through the reverse take over (“RTO”) transaction closed during the year ended December 31, 2021, and became ready for use during the year ended December 31, 2022. The remaining useful life of the intangible assets are as follows: MIT license 9.5 years, Battelle license nil years, and intellectual property 2.5 years.

During the six months ended June 30, 2026, $286,281 of amortization expense was allocated to HEXWAVE cost of revenues (June 30, 2025 - $286,281).

The Company, through its wholly owned subsidiary Liberty Defense Technologies Inc. (“LDT”), has entered into agreements with the Massachusetts Institute of Technology (“MIT”) and MIT’s Lincoln Laboratory (“MIT LL”), including an exclusive patent licence agreement between MIT and LDT dated September 10, 2018, as amended from time to time (the “Licence Agreement”), a technology transfer agreement between LDT and MIT LL, effective August 24, 2018 (the “Technology Transfer Agreement”), and a cooperative research and development agreement between LDT and MIT dated as of December 21, 2018 (“CRADA”), such agreements providing LDT with an exclusive licence for patents, design assets and MIT LL technical expertise related to active three-dimensional imaging technology that are the technology behind the HEXWAVE product.

The obligations under the Technology Transfer Agreement and the CRADA have now been completed. Liberty may consider extending the CRADA (and therefore changing its scope) if it determines that additional MIT LL technical expertise related to active three-dimensional imaging technology is required. Pursuant to the License Agreement, LDT has been granted the exclusive rights to MIT’s patent in “multistatic sparse array topology for FFT-based field imaging” (MIT Case No. l 8409L) (the “Patent”), which is being utilized in the development and application of the HEXWAVE product. The License Agreement is to be in effect until the expiration of the Patent, which is 10 years (December 2035). In granting LDT such patent rights, the Company shall pay MIT, in addition to patent filling costs, an annual fees as follows: 1) $20,000 for 2019 (paid); $50,000 for 2020 (paid); $60,000 for 2021 (paid); $100,000 for 2022 (paid); $nil for 2023, $40,000 for 2024 (payable),

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

$200,000 for 2025 (payable), and $350,000 for 2026 and thereafter; and 2) a royalty of 5.7% of all gross amount billed licensed products (HEXWAVE) of the Company.

During the six months ended June 30,2026, the Company accrued royalty payments of $132,490 (December 31, 2025, $44,916).

On March 22, 2021, the Company, through its wholly owned subsidiary DrawDown Detection, Inc. has entered into an agreement (“Battelle License Agreement”) with Battelle Memorial Institute (“Battelle”), which operates the Pacific Northwest National Laboratory (“PNNL”), to license the millimeter wave-based, High-Definition Advanced Imaging Technology (HD-AIT) body scanner and shoe scanner technologies. The agreement, as amended from time to time, provides the Company with a three-year exclusive license for certain patents which will convert to a non-exclusive license for the remaining life of the patents. The agreement also provides the Company with non-exclusive license for certain patents for life.

As consideration for the Battelle License Agreement, the Company paid $30,000 upon signing and $30,000 six months after.

Under the Battelle License Agreement, the Company shall pay a five percent royalty on gross sales less any returns, repayments, or rejections, that pertain to the production utilizing the license agreement (HD-AIT), and a twenty-five percent royalty on all sublicensing revenues if permitted under the contract guidelines.

During the six months ended June 30, 2026, the Company accrued royalty payments of $nil (December 31, 2025, $nil).

The Company is required to pay a minimum royalty amount as follows, unless the agreement is terminated:

The Company is obligated reimburse Battelle for ongoing patenting expenses, as well as past patenting expenses in the total amount of $50,000, from which $50,000 has been paid.

As at June 30, 2026, the Company has a balance payable of $134,230 (December 31, 2025, $200,000).

During the six months ended June 30, 2026, the Company received working capital loans from related parties in the amount of $327,046. The Company did not receive working capital loans from related parties during the fiscal year ended December 31, 2025. These loans, unsecured and non-interest bearing, lack specified maturity dates. As of June 30, 2026, all loans were fully repaid.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

During the year ended December 31, 2024, the Company obtained a secured business loan of $420,000 from Blade Funding with a 32-week term. The loan carries an annual interest rate of 11.50%, requires weekly payments of $13,125. The loan matured on January 19, 2025. As at March 31, 2026, the balance outstanding was $nil (December 31, 2025 - $nil). During the year ended December 31, 2025, the Company fully repaid this loan.

On August 22, 2024, the Company secured a $1,800,000 business term loan from PFF, LLC (“Parabilis”). The loan has a term of 104 weeks with an annual interest rate of 17.99% and is scheduled to mature on August 15, 2026. The agreement was amended on March 15, 2025, July 15, 2025, August 14, 2025, and September 1, 2025, with additional advancements totaling $650,000 and amending the payment schedule. Repayments of principal commenced in October 2025 with interest only payments through September 2025. The remaining contractual repayments approximate the carrying value of the term loan and are payable over eight months. See Note 10(a) regarding collateral.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

On August 22, 2024, the Company entered into a secured revolving credit line agreement with Parabilis for up to $2,500,000. The borrowing base for the credit line is determined based on the following percentages: 90% of eligible billed receivables, 65% of eligible unbilled receivables, and 30% of eligible delivery orders. The aggregate of eligible billed and unbilled receivables, along with eligible delivery orders, establishes the Company’s borrowing capacity under the credit line.

When invoicing occurs, payments on the invoices are applied directly to the outstanding principal and interest on the credit line. The revolving credit facility had a maturity date of August 31, 2025, which was then amended on September 1, 2025, to mature on May 31, 2026, and will automatically renew for one-year periods unless the lender has notified the borrower at least 90 days in advance of the current maturity date will not renew. The facility carries an interest rate of 14.99% per annum. The Company shall pay a monthly commitment fee equal to 0.083% multiplied by the line of credit balance at the end of each month.

The Parabilis term loan and credit line are secured by all tangible and intangible personal property of the Company, wherever located, whether currently owned or acquired in the future. As of June 30, 2026, the balance has been paid in full.

The Company’s lease liabilities as at June 30, 2026, and December 31, 2025, are as follows:

During the year ended December 31, 2025, the Company was notified one of the leases being nulled due to the owners selling the building. The lease was canceled but the Company’s right to the building was retained until September 30, 2025.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

Minimum lease payments are as follows:

During the six months ended June 30, 2026, the Company recorded a lease expense of $9,000 (December 31, 2025-$6,000) related to short-term leases not meeting the criteria for capitalization under IFRS 16.

The pre-funded warrants were classified as equity instruments in accordance with IAS 32, Financial Instruments: Presentation, as they represent the right to acquire a fixed number of the Company's common shares for a fixed exercise price denominated in the Company's functional currency at the date of issuance. The gross proceeds received from the issuance of the pre-funded warrants were recorded within equity reserves and will be transferred to share capital upon exercise. As equity instruments, the pre-funded warrants are not subsequently remeasured.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

The Company maintains an Omnibus Equity Incentive Plan (the “Incentive Plan”) which is comprised of stock options, restricted share units (“RSUs”), performance share units (“PSUs”), and deferred share units (“DSUs”). The maximum number of common shares reserved for issuance, in the aggregate, under the Incentive Plan is 10% of the aggregate number of common shares issued and outstanding to be granted to directors, officers, employees, and consultants under certain restrictions.

Unless the Board decides, or the grant agreement specifies otherwise, the stock options will vest in two years with quarterly intervals following the date of such grant. The Board shall fix the exercise price of any stock option when such stock option is granted, which shall not be less than the closing price of the common shares on the Exchange on the day prior to the date of grant (the “Market Value”). A stock option shall be exercisable during a period established by the Board, which shall commence on the date of the grant and shall terminate no later than ten (10) years after the date of grant of the award or such shorter period as the Board may determine.

With respect to RSUs, the specific provisions of the RSU plan, eligibility, vesting period, terms of the RSUs and the number of RSUs granted are to be determined by the Board of Directors at the time of the grant.

With respect to PSUs, the specific provisions of the PSU plan, eligibility, vesting period, terms of the PSUs and the number of PSUs granted are to be determined by the Board of Directors at the time of the grant.

The continuity of the number of stock options issued and outstanding are as follows:

As at June 30, 2026, the number of stock options outstanding and exercisable were:

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

During the six months ended June 30, 2026, the Company recognized stock-based compensation related to stock options totaling $352,783 (June 30, 2025 – $932,985). Of this amount, $8,084 was recorded as stock-based compensation in the HEXWAVE cost of revenue (June 30, 2025 – $13,747), and $9,951 was recorded as stock-based compensation in cost of contract revenue (June 30, 2025 - $2,765).

The fair value of the stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

Restricted share units granted for the six months ended June 30, 2026:

The estimated fair value of the equity settled RSUs granted as of June 30, 2026, was $nil (December 31, 2025 – $60,998) and will be recognized as an expense over the vesting period of the RSUs. The fair value of the equity settled RSUs as at the grant date was determined with reference to the market value of the common shares of the Company at the grant date.

Restricted share units granted for the year ended December 31, 2025:

The following table summarizes the movements in outstanding RSUs:

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

A total of 6,418 RSU’s were vested as at June 30, 2026.

During the six months ended June 30, 2026, the Company recognized stock-based compensation related to RSUs in the amount of $22,811 (June 30, 2025 – $24,295).

The continuity of the number of share purchase warrants outstanding is as follows:

The fair value of the compensation warrants was estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

The outstanding number of share purchase warrants is as follows:

Effective April 23, 2026, certain outstanding CAD-denominated warrants were reclassified from equity to derivative financial liabilities following the Company's change in functional currency. Refer to Notes 3 and 15. The pre-funded warrants issued in connection with the Company's initial public offering are not included in the above reclassification, as they continue to qualify for equity classification under IAS 32. As at June 30, 2026, the Company had 770,807 pre-funded warrants outstanding (December 31, 2025 – nil). Each pre-funded warrant entitles the holder to acquire one common share of the Company at an exercise price of $0.0001 per share and remains exercisable until exercised. As equity instruments, the pre-funded warrants are not subsequently remeasured.

On March 17, 2021, Liberty deposited into escrow, and held in escrow, Operational Performance Shares (“OPS”) and Capital Market Performance Shares (“CMPS”) for certain directors, officers, and consultants of the Company upon the Company achieving certain performance milestones. Once these milestones were achieved the shares would be released. These performance shares included 4,444 of OPS and 19,496 of CMPS. In order to fair value these performance shares, management estimated the probability that the Company would issue the performance shares.

All CMPS have been issued in previous years upon the completion of all required milestones.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

Operational Performance Shares

As at June 30, 2026, none of the 4,444 OPS have been issued as neither of the two milestones have been met. The estimated fair value of the OPS is CAD$800,000 which has an estimated vesting period of December 2026. During the six months ended June 30, 2026, the Company recorded stock-based compensation in connection to OPS in the amounts of $47,831 (June 30, 2025 – $51,157). For the six months ended June 30, 2026, and year ended December 31, 2025, none of the operational performance shares have been released from escrow.

Effective April 23, 2026, the Company changed its functional currency from the Canadian dollar ("CAD") to the U.S. dollar ("USD"). As a result, certain outstanding warrants with exercise prices denominated in CAD no longer satisfied the fixed-for-fixed criterion under IAS 32, Financial Instruments: Presentation, and were reclassified from equity to derivative financial liabilities.

Upon the change in functional currency, the derivative warrant liability was initially recognized at fair value. The historical carrying amount of the related warrant reserve was derecognized, and the difference between the historical carrying amount and the initial fair value of the derivative warrant liability was recognized in the condensed interim consolidated statement of loss and comprehensive loss.

Following initial recognition, the derivative warrant liability is measured at fair value at each reporting date, with changes in fair value recognized in profit or loss in accordance with IFRS 9, Financial Instruments.

The fair value of the derivative warrant liability was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

The derivative warrant liability relates exclusively to legacy CAD-denominated unit warrants outstanding on April 23, 2026. Pre-funded warrants issued in connection with the Company's initial public offering and other equity-classified warrants are not included in the derivative warrant liability.

Liberty Defense Holdings, Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Expressed in U.S. dollars, unless otherwise stated and per share amounts)

For the three and six months ended June 30, 2026 and 2025

Basic loss per share is calculated by dividing the net loss for the period by the weighted average number of common shares outstanding during the period.

The Company incurred net losses for the six months ended June 30, 2026 and 2025; therefore, all potentially dilutive securities, including outstanding stock options, share purchase warrants, restricted share units, and performance share units, if any, have been excluded from the calculation of diluted loss per share as their effect would be anti-dilutive. The pre-funded warrants have been included in the weighted average number of commons shares outstanding during the period because they are exercisable into common shares for a nominal exercise price.

Revenue recognized for the six months ended June 30, 2026, and 2025, relates to contract revenue from the Transportation Security Administration (“TSA”) (Note 17), as well as sales of HEXWAVE units.

Deferred revenue as of June 30, 2026, was as follows: