SVBL 10-K & 10-Q changes, risk factors and insider trading

To date, the Company has earned no revenues and has incurred accumulated net losses of $138,814,000.$151,917,277. In addition, the Company has limited financial resources. As of October 31, 2024, 2025, the Company had cash and cash equivalents of $546,000$1,135,565 and working capital deficit of $327,000.$6,202,263, excluding the warrant derivative liability. Continuation as a going concern is dependent upon the continued payment of Arbitration-related costs by Bench Walk 23P, L.P., a Delaware limited partnership (“Bench Walk”), under the Funding Agreement and achieving future financing or strategic transactions. However, there is no assurance that the Funding Agreement will not be terminated or that the Company will have the ability to be successful pursuing a financing or strategic transaction. Accordingly, there is substantial doubt as to whether existing cash resources and working capital are sufficient to enable the Company to continue its operations for the next 12 months as a going concern. Ultimately, in the event that the Funding Agreement is terminated, and the Company cannot obtain additional financial resources, or achieve profitable operations, it may have to liquidate its business interests and investors may lose their investment. The accompanying consolidated financial financial statements have been prepared assuming that the Company will continue as a going concern. The consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. Such adjustments could be material.

The Company’s business plan has been focused focused on exploring the Sierra Mojada concessions to identify mineral reserves and, if appropriate, to ultimately develop each property. Although the Company has reported mineral resources on the Sierra Mojada Project, it has not established any mineral reserves and remains in the exploration exploration stage. The Company may never enter the development or production stage. Exploration of mineralization and determination of whether the mineralization might be extracted profitably is highly speculative, and it may take a number of years until production is possible, during which time the economic viability of the project may change. Substantial expenditures are required to establish mineral reserves, extract metals from ore and construct mining and processing facilities.

During the fiscal years ended October 31, 2024 2025 and 2023,2024, the Company incurred net losses of $169,000$13,103,000 and $1,251,000$169,000, respectively. At October 31, 2024,2025, the Company had stockholders’ equity deficiency of $5,543,000$6,906,000 and cash and cash equivalents of $546,000.$1,135,000. If the blockade is resolved, significant amounts of capital would be required to continue to explore and potentially develop the Sierra Mojada concessions. The Company is not engaged in any revenue-producing activities and does not expect to be in the near future. Currently, potential sources of funding consist of the sale of additional equity securities, entering into joint venture agreements or selling a portion or all of the Company’s interests in its assets. There is no assurance that any additional capital that the Company will require will be obtainable on terms acceptable to it, if at all. Failure to obtain such additional financing could result in delays or indefinite postponement of further exploration of the projects. Additional financing, if available, will likely result in substantial dilution to existing stockholders.

The Company’s financial condition could be adversely affected by changes in currency exchange rates, especially between the U.S. dollar and each of the Mexican peso (“$MXN”) and the Canadian dollar (“$CDN”) given its focus on the Sierra Mojada Project in Mexico and the corporate office in Vancouver, Canada.

The Company attempts to confirm the validity of of its rights of title to, or contract rights with respect to, each mineral property in which it has a material interest. However, the Company Company cannot guarantee that title to its properties will not be challenged. The Sierra Mojada Property may be subject to prior unregistered agreements, interests or native land claims, and title may be affected by undetected defects. There may be valid challenges to the title ofto any of the claims comprising the Sierra Mojada Property that, if successful, could impair possible development and/or operations with respect to such properties in the future. Challenges to permits or property rights (whether successful or unsuccessful), changes to the terms of permits or property rights, or a failure to comply with the terms of any permits or property rights that have been obtained could have a material adverse effect on business by delaying or preventing or making continued operations economically unfeasible.

In order to finance future operations, the Company Company may raise funds through the issuance of common stock or the issuance of debt instruments or other securities convertible into common stock. The Company cannot predict the size of future issuances of common stock or the size and terms of future issuances of debt instruments instruments or other securities convertible into common stock or the effect, if any, that future issuances and sales of the Company’s securities securities will have on the market price of its common stock. Any transaction involving the issuance of previously authorized but unissued shares, shares, or securities convertible into common stock, would result in dilution, possibly substantial, to present and prospective security holders. holders. Demand for equity securities in the mining industry has been weak; therefore, equity financing may not be available on attractive terms terms and, if available, will likely result in significant dilution to existing shareholders.stockholders.

The common stock of the Company is listed on the the TSX and tradesis quoted on the OTCQB. The trading price of the Company’s common stock has been, and could continue to be, subject to wide wide fluctuations in response to announcements of its business developments, results and progress of its exploration activities at the Sierra Sierra Mojada Project, progress reports on its exploration activities, and other events or factors. In addition, stock markets have experienced significant price volatility in recent months and years. This volatility has had a substantial effect on the share prices of companies, at times for reasons unrelated to their operating performance. These fluctuations could be in response to:

On June 17, 2024, the Company filed its Memorial submission with the ICSID detailing the claim against Mexico as well as damages for the sum of $315 $408 million.million, plus pre-award interest accruing from the valuation date, June 30, 2020. The Arbitration hearing iswas set to commenceheld in October 2025, and the Company submitted its post-hearing brief on November 21, 2025 and its costs on December 5, 2025. The tribunal is expected to render its final ruling as soon as practicable.

For the fiscal year ended October 31, 2024, 2025, the Company reported a consolidated net loss of $13,103,000 or approximately $0.28 per share, compared to a consolidated net loss of $169,000 or approximately $nil per share, compared to a consolidated net loss of $1,251,000 or approximately $0.04 per share during the fiscal year ended October 31, 2023.2024. The $1,082,000 decrease$12,934,000 increase in the consolidated net loss was primarily due to a $136,000$5,079,000 decreaseincrease in exploration and property holding costs and a $7,861,000 $877,000increase in other expenses, which was offset by a $5,000 decrease in general and administrative expenses as a majority of these costs were reimbursed by Bench Walk, which was partially offset by a $68,000 increase in other income in the 2024 fiscal year compared to the 2023 fiscal year as described below.

Stock-based compensation was a factor in the fluctuations fluctuations in general and administrative expenses. Overall stock-based compensation included in general and administrative expense increaseddecreased to $33,000 toin the 2025 fiscal year from $115,000 in the 2024 fiscal year from $73,000 in the 2023 fiscal year. This was mainly due to the result of stock options vesting in the 2024 2025 fiscal year having a higherlower fair value than stock options vesting in the 20232024 fiscal year.

Personnel costs decreasedincreased by $19,000$27,000 to $252,000 toin the 2025 fiscal year from $225,000 in the 2024 fiscal year from $243,000 in the 2023 fiscal year. This decreaseincrease was mainly due to a $82,000$75,000 reduction in the accrued vacation liability and a $nil bonus recorded in the 2024 fiscal yearyear, comparedwhich to $68,000 bonus in the 2023 fiscal year. The decrease was offset by a $101,000$48,000 increase in salaries due to revised agreements with the Company’s management in September 2023 and a $24,000 increasedecrease in stock-based compensation compared to the 20232024 fiscal year.

Professional fees decreased by $315,000 $41,000 to $118,000 in the 2025 fiscal year compared to $159,000 in the 2024 fiscal year compared to $474,000 in the 2023 fiscal year. This decrease was mainly due to arbitration relateda costs$45,000 incurreddecrease in relationlegal costs related to the legacyannual NAFTA claimmeeting in the 2023same period last year and a $11,000 decrease in other costs related to compensation analysis, which was offset by a $23,000 increase in Arbitration-related costs in the 2025 fiscal year.

Directors’ fees increaseddecreased by $21,000$35,000 to to $134,000$99,000 in the 20242025 fiscal year as compared to $113,000$134,000 for the 20232024 fiscal year. This increasedecrease was primarily due to a $22,000$34,000 increasedecrease in the stock-based compensation expense to $14,000 in the 2025 fiscal year from $48,000 in the 2024 fiscal year from $26,000 in the 2023 fiscal year as a result of stock options vesting in the 20242025 fiscal year having a higherlower fair value than stock options vesting in the 20232024 fiscal year.

The Company recorded a $8,000$32,000 recoveryprovision offor uncollectible VAT forin the 20242025 fiscal year as compared to a $45,000$8,000 provisionrecovery forof uncollectible VAT infor the 20232024 fiscal year. The allowance for uncollectible taxes in Mexico was estimated by management based upon a number of factors, including the length of time the returns have been outstanding, responses received from tax authorities, general economic conditions in Mexico and estimated net recovery after commissions.

In the current year, the Company recorded a contra contra expense of $669,000 compared to $209,000$669,000 in the 20232024 fiscal year, which is comprised of funds from the Funding Agreement. Bench Walk is funding the Company’s legal, tribunal and external expert costs and defined corporate operating expenses. This is a nonrecourse agreement, and the Company has no obligation to repay any funds received under the agreement. In the event of a favorable outcome, Bench Walk would recover disbursed funding as part of theirits investment return. As the Funding Agreement was entered into in September 2023, there is no fully comparable amount in the 2023 fiscal year.

Other (Expenses) Income

The Company recorded other incomeexpenses of $86,000$7,775,000 in the 20242025 fiscal year as compared to other income of $18,000$86,000 in the 20232024 fiscal year. The significant factor contributing to other expenses in the 2025 fiscal year was a $7,080,000 litigation accrual related to the Valdez case, a $687,000 expense from a change in fair value of the warrant derivative liability, which was due to an increase in the fair value of warrants with a $CDN exercise price from October 31, 2024 to October 31, 2025 and a $22,000 foreign currency transaction expense, which was offset by a $15,000 interest income. The significant factor contributing to other income in the 2024 fiscal year was $45,000 in interest income, $21,000 in foreign currency transaction income and $31,000 in miscellaneous income on partial forgiveness of the Company’s Canada Emergency Business Account (“CEBA”) loan and a gain from sale of equipment, which was offset by a $11,000 expense from change in fair value of the warrant derivative liability due to an increase in the fair value of warrants with a $CDN exercise price from October 31, 2023 to October 31, 2024. The significant factor contributing to other income in the 2023 fiscal year was a $32,000 interest income and a $9,000 foreign currency transaction income, which was offset by $20,000 in other costs related to the certain years’ VAT and corporate taxes disputes with Mexican tax authorities and a $3,000 expense related to the issuance of warrants.

As noted above, pursuant to the Funding Agreement, Bench Walk is paying up to an aggregate of $9.5 million to fund legal costs and other expenses incurred by the Company in connection with the Claim, including an amount for reasonably incurred day-to-day operating expenses of the Company. During the 20242025 fiscal year, the Company received funding of $800,000 as reimbursement of corporate operating costs incurred. In January 2025, the Company received an additional reimbursement of $200,000 from Bench Walk.

The Company agreed that the Bench Walk shall be entitled to receive a share of any proceeds arising from the Claim (the “Claim Proceeds”) of up to 3.5x Bench Walk’s capital outlay (or, if greater, a return of 1.0x Bench Walk’s capital outlay plus 30% of the Claim Proceeds). The actual return to Bench Walk may be lower than the foregoing amounts depending on how quickly the Claim is resolved.

During the the 20242025 fiscal year, cash and cash equivalents were primarily utilized to fund general and administrative expenses, and to reduce accounts payable and accrued liabilities balances.expenses. In addition, the Company received $800,000 from Bench Walk.Walk and net proceeds of $628,000 from warrant exercises. As a result of the arbitration funding from Bench Walk Walk,and net cash proceeds received from warrant exercises, which was partially offset by exploration activities and general and administrative expenses, cash and cash equivalents decreasedequivalents, and restricted cash increased from $1,009,000 at October 31, 2023 to $546,000 at October 31, 2024.2024 to $1,210,000 at October 31, 2025.

Cash flow provided by operations for the 2025 fiscal year were $36,000 as compared to cash flows used in operations of $421,000 for the 2024 fiscal year were $421,000 as compared to $794,000 for the 2023 fiscal year. The decrease was mainly due to the timing of certain payments.

Cash flows provided by investing activities for the 2025 fiscal year was $nil. Cash flows provided by investing activities for the 2024 fiscal year were proceeds of $16,000 from the sale of equipment, which was offset by a $1,000 purchase of equipment. Cash flows provided by investing activities for the 2023 fiscal year was $nil.

The cash flows provided by financing activities of $628,000 in the 2025 fiscal year was due to the warrant exercises. Cash flows used by financing activities for the 2024 fiscal year were $57,000 as the Company repaid the payable portion of the CEBA loan and payment of share issuance costs related to the private placement in the 2023 fiscal year. The cash flows provided by financing activities of $916,000 in the 2023 fiscal year was due to the private placement the Company completed.year.

As of October 31, 2024, 2025, the Company had cash and cash equivalents of $546,000$1,136,000 as compared to cash and cash equivalents of $1,009,000$477,000 as as of October 31, 2023.2024. The decreaseincrease in liquidity and working capital were primarily the result of the netArbitration repayment of accounts payable of $445,000funding and increaseswarrant exercises, inwhich accountswere receivablepartially andoffset by general and administrative expenses and payments, which were partially offset decreases in related party and the Arbitration funding.payments.

Any future additional financing in the near term will likely be in the form of the issuance of equity securities, which will result in dilution to Silver Bull’s existing shareholders.stockholders. Moreover, the Company may incur significant fees and expenses in the pursuit of a financing or other strategic transaction, which will increase the rate at which its cash and cash equivalents are depleted.

Capital Requirements and Liquidity; Need for Additional Funding The Company’s management and board of directors monitor overall costs, expenses, and financial resources and, if necessary, will adjust planned operational expenditures in an attempt to ensure that the Company has sufficient operating capital. The Company continues to evaluate its costs and planned expenditures, including its Sierra Mojada Property as discussed below.

There are no significant off-balance sheet arrangements arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to its shareholders.stockholders.

In November 2023, Silver Bull adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards UpdatedUpdate (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. The adoption did not have a significant impact on the Company’s financial position, results of operations or cash flows and disclosures.

In DecemberNovember 2023,2024, the FASB issued ASU 2023-09,2024-03, Income TaxesStatement - Reporting Comprehensive Income (Topic 740220): ImprovementsExpense Disaggregation Disclosures, which includes amendments to Incomerequire the Taxdisclosure Disclosures.of Thiscertain ASUspecific expandscosts publicand entities’expenses that are included in a relevant expense caption on the face of the income taxstatement. Specific disclosurescosts byand requiring disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosuresexpenses that would be usefulrequired into makingbe capitaldisclosed allocationinclude purchases of inventory, employee compensation, depreciation decisions.and intangible asset amortization. Additionally, a qualitative description of other items is required, equal to the difference between the relevant expense caption and the separately disclosed specific costs. This ASU will beis effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2024.2027, Theand guidance will beare applied oneither aprospectively prospective basisor withretrospectively at the option to apply of the standard retrospectively. Early adoption is permitted.Company. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

The preparation of financial statements in conformity conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company to establish accounting policies and make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the consolidated financial statements. These consolidated financial statements include some estimates and assumptions that are based on informed judgments and estimates of management. The Company evaluates its policies and estimates on an ongoing basis and discuss the development, selection and disclosure of critical accounting policies with the audit committee of the board of directors. Predicting future events is inherently an imprecise activity and as such requires the use of judgment. The Company’s consolidated financial statements may differ based upon different estimates and assumptions.

The Tax Cuts and Jobs Act of 2017 was signed into into law on December 22, 2017. The law includes significant changes to the U.S. corporate income tax system, including a federal corporate corporate rate reduction from 35% to 21%, limitations on the deductibility of interest expense and executive compensation, and the transition of of U.S. international taxation from a worldwide tax system to a territorial tax system. The law did not have a material impact on the Company’s Company’s financial position, results of operations or cash flows and disclosures. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted. Under the OBBBA, the Company’s existing tax rates remain unchanged.

The Company classified warrants on the Company’s balance sheet as a derivative liability which is fair valued at each reporting period subsequent to the initial issuance as the Company’s functional currency is the U.S. dollar and the exercise price of the warrants is the $CDN. The Company has used the Black-Scholes pricing model to value the warrants that do not have an acceleration feature. Determining the appropriate fair-value model and calculating the fair value of warrants requires considerable judgment. Any change in the estimates used may cause the value to be higher or lower than that reported. The estimated volatility of the common stock of the Company at the date of issuance, and at each subsequent reporting period, is based on historical volatility and maybe adjusted to reflect implicit discount to historical volatilities observed in the prices of traded warrants. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining remaining life of the warrants at the valuation date. The expected life of the warrants is assumed to be equivalent to their remaining contractual contractual term. The dividend yield is expected to be none as the Company has not paid dividends nor does the Company anticipate paying any dividend in the foreseeable future.

On June 28, 2023, the Company filed a request for arbitration (the “Arbitration”) before the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) against the United Mexican States (“Mexico”) under the United States-Mexico-Canada Agreement (the “USMCA”) and NAFTA, (together with the USMCA, the “Treaties”). Since the arbitration request, the Arbitration has become the Company’s core focus. The Arbitration seeks compensation for the losses resulting from the Mexican State’s wrongful conduct and its breaches of the Treaties’ protections, including expropriation, breach of the fair and equitable treatment standard, discrimination, and other unlawful treatment in respect of the Sierra Mojada Property. On June 17, 2024, the Company filed its Memorial submission with ICSID detailing the claim against Mexico, and its Claimant’s Reply was filed on April 25, 2025. The reply responded to Mexico’s Counter Memorial, and revised the damages estimate to the sum of $315 million, plus pre-award interest accruing from the valuation date, June 30, 2020. The Arbitration hearing was held in Washington, D.C. in October 2025, and the Company submitted its post-hearing brief to the tribunal on November 21, 2025 and its costs on December 5, 2025. On May 29, 2026, the ICSID tribunal rendered its final award dismissing the Claim concluding that it did not have jurisdiction and/or was time-barred to hear the Company’s Claim (ICSID Case No. ARB/23/24). and ordered the Company to pay a portion of Mexico’s legal costs totaling approximately US$998,000 together with simple interest thereon (or on the outstanding balance thereof) at the U.S. Prime Rate from the date of this award until payment. The Company is currently assessing the decision to determine whether there are grounds for annulment. The Company has 120 days from the date of the ruling to register for annulment, and the proceeding would be anticipated to take approximately 18 to 36 months from the date of registration. The Company is also evaluating its strategic options following the dismissal, including seeking resolution of the ongoing blockade and/or identifying other exploration projects for potential development and investment.

PropertiesProperty Concessions and Outlook

Three Months Ended AprilJuly 30,31, 2026 and 2025

For the three months ended AprilJuly 30,31, 2026, the Company recorded a net loss of $1,117,000,$125,000, or approximately $0.02$0.00 per share, compared to a net loss of $70,000,$405,000, or approximately $nil $0.01 per share, during the comparable period last year. The $1,047,000$280,000 increasedecrease in net loss was primarily due to a$190,000 $1,041,000other increaseincome in compared to $249,000 other expenses andfor anthe $11,000comparable increaseperiod inlast administrative expenses,year, which was offset by aan $7,000$18,000 decreaseincrease in exploration and property holding costs and a $139,000 increase in administrative expenses in the same period last year as described below.

Exploration and property holding costs decreased increased by $7,000$18,000 to $3,000$160,000 for the three months ended AprilJuly 30,31, 2026, compared to $10,000$142,000 for the comparable period last year. This decrease increase was mainly due to a$41,000 $7,000of decreaselegal costs incurred in exploration and property holding costs in the three months ended April 30, 2026 due to the reduced activities at Sierra Mojada Property.Mexico. During the three months ended AprilJuly 30,31, 2026, the Company recorded a contra expense of $29,000 $nil in exploration and property holding costs compared to $31,000 in the same period last year, which is comprised of funds from the litigation funding agreement entered into on September 5, 2023, with Bench Walk, a third party that specializes in funding litigation and arbitration claims (the “Funding Agreement” or the “LFA”). Following the unfavorable award issued by the ICSID tribunal, Bench Walk terminated the Funding Agreement as of May 29, 2026. No contra expense has been recorded during the three months ended July 31, 2026.

The Company recorded $23,000$155,000 general and administrative expenses in the three months ended AprilJuly 30,31, 2026 compared to $12,000$16,000 general and administrative expenses in the same period last year as described below.

Stock-based compensation was a factor in the fluctuations in general and administrative expenses. The Company recorded $nil in stock-based compensation included in general and administrative expense for the three months ended AprilJuly 30,31, 2026 compared to $7,000$6,000 in stock-based compensation for the comparable period last year as a result of stock options that were granted and vested to employees, directors and consultants. There were no options granted during the three months ended AprilJuly 30,31, 2026 and 2025.

Personnel costs of $66,000$56,000 in the three months ended AprilJuly 30,31, 2026 were similar to the $65,000$60,000 in such costs in the same period last year.

Directors’Office feesand administrative costs decreased by $3,000$9,000 to $21,000 $47,000 for the three months ended AprilJuly 30,31, 2026 as compared to $24,000$56,000 for the comparable period last year. This decrease was primarily due to adecreased $3,000office decreaserent inand stock-basedshareholder compensationrelation compared to the same period last year.activities.

ForProfessional fees increased by $13,000 to $29,000 for the sixthree months ended AprilJuly 30,31, 2026, the Company had a net loss of $1,237,000, or approximately $0.03 per share,2026 compared to a$16,000 net loss of $173,000, or approximately $nil per share, duringfor the comparable period last year. The $1,064,000This increase in net loss was primarilymainly due to a $1,114,000 increaseincreases in other expenses,accounting fees and legal costs, which waswere offset by a $4,000$5,000 decrease in explorationarbitration andrelated propertycosts holdingcompared costs.to the same period last year.

Exploration and property holding costs decreased increased by $4,000$14,000 to $78,000$238,000 for the sixnine months ended AprilJuly 30,31, 2026, compared to $82,000$224,000 for the comparable period last year. This decrease increase was mainly due to a $4,000 decrease$41,000 in depreciationlegal costs.costs incurred in Mexico during the period. During the sixnine months ended AprilJuly 30,31, 2026, the Company recorded a contra expense of $68,000 in exploration and property holding costs compared to $68,000$98,000 in the samecomparable period last year, which is comprised of funds from the Funding Agreement. Following the unfavorable award issued by the ICSID tribunal, Bench Walk terminated the Funding Agreement as of May 29, 2026. No contra expense has been recorded during the three months ended July 31, 2026.

General and administrative expenses increased by $1,000$140,000 to $44,000$199,000 in the sixnine months ended AprilJuly 30,31, 2026 from $43,000$59,000 in the same period last year as described below.

Stock-based compensation was a factor in the fluctuations in general and administrative expenses. The Company recorded $4,000 in stock-based compensation included in general and administrative expense for the sixnine months ended AprilJuly 30,31, 2026 compared to $21,000$27,000 for the comparable period last year as a result of stock options that were granted and vested to employees, directors and consultants in the sixnine months ended AprilJuly 30,31, 2025. There were no options granted during the nine months ended July 31, 2026 and 2025.

Directors’Personnel feescosts decreased $8,000$4,000 to $44,000 $188,000 for the sixnine months ended AprilJuly 30,31, 2026 as compared to $52,000$192,000 for the comparable period last year. This decrease was primarily due to a $7,000 decrease in stock-based compensation compared to the same period last year.compensation.

The Company recorded a $5,000$6,000 provision for uncollectible VAT for the sixnine months ended AprilJuly 30,31, 2026 as compared to a $4,000$5,000 provision for uncollectible VAT in the comparable period last year. The allowance for uncollectible taxes was estimated by management based upon a number of factors, including the length of time the returns have been outstanding, responses received from tax authorities, general economic conditions in Mexico and estimated net recovery after commissions.

During the sixnine months ended AprilJuly 30,31, 2026, the Company recorded a contra expense of $339,000 in the general and administrative expenses compared to $309,000$449,000 in the same period last year, which is comprised of funds from the Funding Agreement. The decrease was due to the result of the unfavorable award issued by the ICSID tribunal and Bench Walk isterminated the Funding Agreement as of May 29, 2026. Bench Walk was funding the Company’s legal, tribunal and external expert costs and defined corporate operating expenses. This iswas a non-recourse agreement, and the Company has no obligation to repay any funds received under the agreement.Funding In the event of a favorable outcome, Bench Walk would recover disbursed funding as part of its investment return.Agreement.

During the sixnine months ended AprilJuly 30,31, 2026, the Arbitration lawyers incurred $192,000 in legal costs compared to $1,347,000$2,038,000 in the same period last yearyear, all of which were paid by Bench Walk directly.

Other (Expenses) Income

The Company recorded other expenses of $1,114,000 $924,000 for the sixnine months ended AprilJuly 30,31, 2026 as compared to other expenses of $45,000$294,000 for the comparable period last year. The significant factor factors contributing to other expenses in the sixnine months ended AprilJuly 30,31, 2026 waswere 1) a $1,118,000$998,000 expense recorded in relation to the reimbursement of Mexico’s arbitration legal costs as required by the ICSID tribunal, 2) associated accrued interest of $12,000, 3) a write off of $192,000 in accounts receivable due to Bench Walk terminating the Funding Agreement, and 4) a $105,000 foreign currency transaction expense. This was offset by $360,000 in income from the change in fair value of the warrant derivative liability due to ana increasedecrease in the fair value of warrants with a $CDN exercise price from OctoberNovember 31,1, 2025 to April 30,July 31, 2026 and a $10,000 foreign currency transaction expense, which was offset by $15,000 in$22,000 interest income. The significant factor contributing to other expenses in the sixnine months ended AprilJuly 30,31, 2025 was a $44,000$284,000 expense from the change in fair value of the warrant derivative liability that was due to an increase in the fair value of warrants with a $CDN exercise price from October 31, 2024 to AprilJuly 30,31, 2025 2025, and a $8,000$20,000 foreign currency transaction expense, which was offset by $7,000$10,000 inof interest income.

As noted above, pursuant to the Funding Agreement, Bench Walk iswas paying up to an aggregate of $9.5 million to fund legal costs and other expenses incurred by the Company in connection with the Claim, including an amount for reasonably incurred day-to-day operating expenses of the Company. During the sixnine months ended April 30,July 31, 2026, the Company received funding of $200,000$400,000 as reimbursement of corporate operating costs incurred. Following the unfavorable award issued by the ICSID tribunal, Bench Walk terminated the Funding Agreement, and the Company wrote off the related accounts receivable balance of $192,132.

During the sixnine months ended AprilJuly 30,31, 2026, cash and cash equivalents were primarily utilized to fund the exploration activities and general and administrative expenses. As a result of the exploration activities and general and administrative expenses, cash and cash equivalents decreased from $1,136,000 at October 31, 2025 to $918,000$926,000 at AprilJuly 30,31, 2026.

Cash flows used in financing activities for the six nine months ended AprilJuly 30,31, 2026 were $8,000,$4,000, which was mainly due to the payment of expenses relating to the warrant exercises in the 2025 fiscal year. This was offset by a net proceeds of $4,000 from the exercise of 45,000 warrants at an exercise price of $CDN 0.13 per warrant. Cash flows provided by financing activities for the sixnine months ended AprilJuly 30,31, 2025 were net proceeds of $6,000$82,000 from the exercise of 21,500245,000 warrants at an exercise price of $0.59 per share,warrant, net of $0.25 per sharewarrant paid to Arras.Arras as per the terms of the Distribution.

As of AprilJuly 30,31, 2026, the Company had cash and cash equivalents of $918,000$926,000 and working capital deficiency of $6,283,000, excluding the warrant derivative liability,$8,333,000, as compared to cash and cash equivalents of $1,136,000 and working capital deficiency of $6,202,000, excluding the warrant derivative liability as of October 31, 2025. The decrease in liquidity and working capital were primarily the result of increased accounts receivable and increased general and administrative expenses, which was offset by increased payable and accrued liabilities and increased general and administrative expenses during the sixnine months ended April 30,July 31, 2026.

DespiteBased the arbitration finance in place, based on the Company’s constrainedlimited cash and cash equivalents, and history of losses, there existsis asubstantial certaindoubt levelas ofto uncertaintywhether regarding the Company’s abilityexisting cash resources are sufficient to sustain its operation over the next 12 months as a going concern. Whileenable the Company entered into a Funding Agreement aimed at covering arbitration legal costs and certain other costs, supplemental fundraising will be essential to meet more extensive operational demands. Management plans to pursue possible financing and strategic options, including, but not limited to, obtaining additional equity financing, and the exercising of warrants by warrantholders. Management has successfully pursued these options previously and believes that they alleviate the substantial doubt that the Company can continue its operations for the next 12 months as a going concern. Management plans to pursue possible financing and strategic options including, but not limited to, obtaining additional equity financing. Management has successfully pursued these options previously and believes that these plans may alleviate the substantial doubt regarding the Company's ability to continue operations for the next 12 months as a going concern. However, there is no assurance that the Company will be successful in pursuing these plans.

If the blockade is resolved, and exploration of the Sierra Mojada project is restarted, the Company will require significant amounts of additional capital. As of JuneAugust 11,31, 2026, the Company had approximately $1.0$0.8 million in cash and cash equivalents. The continued exploration of the Sierra Mojada Property ultimately would require the Company to raise additional capital, identify other sources of funding, identify a strategic partner or other strategic alternatives.