Financial Statements Q2, 2025

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

common shares outstanding

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

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

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

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1. Nature of business and going concern

   Solar Alliance Energy Inc. (the "Company") is incorporated under the laws of British Columbia and is an energy solutions provider focused on commercial and industrial solar installations in the United States of America ("United States"). The Company's common shares are listed for trading on the TSX Venture Exchange ("TSX-V") under the symbol "SOLR" and on the OTC in the United States under the symbol "SAENF.

   The Company's corporate office is located at 82 Richmond Street East, Toronto, ON, Canada, M5C 1P1.

   1. Going concern

      These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which assumes the Company will continue in operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Accordingly, it does not give effect to adjustments, if any, and which could be material, that would be necessary should the Company be unable to continue as a going concern, and therefore be required to liquidate its assets and settle its liabilities in other than the normal course of business and at amounts that may differ from those shown in these unaudited interim condensed consolidated financial statements.

      The Company's strategy to mitigate these risks and uncertainties is to execute its business plan focused on increased revenue growth from its commercial and utility installation division, improving overall gross profit, managing operating expenses and working capital requirements as required, and securing additional financing through equity or debt investments.

      As at June 30, 2025, the Company had an accumulated deficit of $70,266,233, comprehensive loss for the six months ended June 30, 2025 was $958,441, and positive cash flow from operations of $232,770. The Company is dependent on generating cash flow from its operations and obtaining equity or debt financing to fund its planned revenue growth and working capital requirements. Such financing may not be available when required, or on terms acceptable to the Company. These conditions raise material uncertainties which cast significant doubt as to whether the Company will be able to continue as a going concern.

2. Material accounting policies
   1. Basis of presentation and measurement

      These unaudited interim condensed consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified at fair value through profit or loss ("FVTPL"). In addition, these unaudited interim condensed consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

      In the preparation of these unaudited interim condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amount of income and expenses during the period. Actual results could differ from these estimates. Of particular significance are the estimates and assumptions used in the recognition and measurement of items included in note 2.4.

   2. Statement of compliance

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting and using the same accounting policies as described in the Company's December 31, 2024 financial statements except for the new accounting standards/amendments adopted. The notes presented in these condensed interim consolidated financial statements include, in general, only significant changes and transactions occurring since

1. Material accounting policies (continued)
   1. Statement of compliance (continued)

      the Company's last year end and are not fully inclusive of all disclosures required by IFRS for annual financial statements. These unaudited condensed interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements, including the notes thereto, for the year ended December 31, 2024.

      These unaudited interim condensed consolidated financial statements were authorized for issuance by the Board of Directors of the Company on August 28, 2025.

   2. Functional and presentation currency

      These unaudited interim condensed consolidated financial statements are presented in Canadian dollars, which is the

      parent Company's functional currency. The functional currency of the Company's US subsidiaries is the US dollar.

   3. Use of Accounting Assumptions, Estimates and Judgments

      The preparation of these unaudited interim condensed consolidated financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

      Estimates and underlying assumptions are reviewed on an ongoing basis, including the assessment of the Company's ability to continue as a going concern as discussed above in Note 1. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

      1. Critical accounting estimates

         Critical accounting estimates are estimates and assumptions made by management that may result in a material adjustment to the carrying amount of assets and liabilities within the next fiscal year and are, but are not limited to, the following:

         1. Share-based payments

            The fair value of stock options issued are subject to the limitation of the Black-Scholes option pricing model which incorporates market data, and which involves uncertainty and subjectivity in estimates used by management in the assumptions. Because the Black-Scholes option pricing model requires the input of highly subjective assumptions, including the volatility of share price, changes in the subjective input assumptions can materially affect the fair value estimate.

         2. Percentage of completion calculation

         The Company measures the stage of completion for Engineering, Procurement and Construction ("EPC") projects based on percentage of contract value delivered to customers, most usually by reference to invoices issued in accordance with project milestones achieved, unless otherwise appropriate. The estimation of total estimated costs requires judgment and changes to these estimates may affect revenue, unbilled revenue, and deferred revenue.

         1. Material accounting policies (continued) 2.4 Use of Accounting Assumptions, Estimates and Judgments (continued)
      2. Critical Accounting Judgments

1. Going Concern

   The assessment of whether the going concern assumption is appropriate requires management to consider all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. The Company is aware that material uncertainties related to events or conditions may cast significant doubt upon the Company's ability to continue as a going concern.

2. Determination of functional currency

   The functional currency of the Company and each of the Company's subsidiaries is the currency of the primary economic environment in which the entity operates. Management has determined that the functional currency of the parent Company is the Canadian dollar. The functional currency of the Company's US subsidiaries is the US dollar.

3. Determination of CGUs

   A cash generating unit ("CGU") is defined as the lowest grouping of integrated assets that generate identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The allocation of assets into CGUs requires significant judgment and interpretations with respect to the integration between assets, the existence of active markets, similar exposure to market risks, shared infrastructures, and the way in which management monitors the operations.

4. Contingencies

Due to the nature of the Company's operations, various legal, tax, environmental, regulatory, and business acquisition consideration matters are outstanding from time to time. In the event that management's estimates of the future resolution of these matters' changes, the Company will recognize the effects of the changes in its unaudited interim condensed consolidated financial statements on the date such changes occur.

1. Deposits As at As at June 30, December 31, 2025 2024

   BC License of Occupation security deposits (i)	$ 19,000	$ 18,000
   Other prepaid deposit	25,768	27,128
   Total	$ 44,768	$ 45,128

   (i) The Company has $19,000 (December 31, 2024 - $18,000) on deposit with the BC Ministry of Forests, Lands, and Natural Resource Operations in respect of its remaining licenses of occupation. The funds are held in a non-interest-bearing trust by the Provincial Treasury.

2. Property, plant and equipment

   The following table illustrates movements in the Company's property, plant and equipment cost balance by category:

   COST Solar facilities (2) Other equipment (1) Total

   Balance, December 31, 2023	$	- $ 267,633	$ 267,633
   Additions Disposals Foreign exchange		- 20,488 - - - 2,230	20,488 -2,230
   Balance, December 31, 2024 Foreign exchange	$	- $ 290,351 - -	$ 290,351 -
   Balance, June 30, 2025	$	- $ 290,351	$ 290,351

   The following table illustrates movements in the Company's accumulated depreciation balance by category:

   ACCUMULATED DEPRECIATION Solar facilities(2)(3) Other equipment (1) Total

   Balance, December 31, 2023	$ - $ 186,707	$ 186,707
   Depreciation	- 24,459	24,459
   Foreign exchange	- (1,681)	(1,681)
   Balance, December 31, 2024	$ - $ 209,485	$ 209,485
   Depreciation	- 8,857	8,857
   Foreign exchange	- 3,968	3,968
   Balance, June 30, 2025	$ - $ 222,310	$ 222,310
   CARRYING AMOUNTS
   Balance, December 31, 2024	$ - $ 80,866	$ 80,866
   Balance, June 30, 2025	$ - $ 68,041	$ 68,041

   (1) Other equipment includes vehicles, office equipment, furniture and fixtures, computers, and computer software.

3. Trade and other payables

   June 30, 2025		December 31, 2024
   Trade and other payables in Canada	$ 1,793,238	$ 1,459,686
   Trade and other payables in the United States	2,052,800	1,784,706
   Total trade and other payables	$ 3,846,038	$ 3,244,392

4. Short-term loans and note payable

   In June 2023, the Company closed an unsecured short-term construction loan for a total capacity of $137,500, which was due to a related party (note 13). The term of the loan is one year from the date of each advance and bears interest at 15% per annum. During the six months ended June 30, 2025, the Company repaid $nil and recorded interest expense for the three months ended of $5,462 (2024 - $18,786) and for the six months ended of $10,547 (2024 - $25,284).

5. Government Assistance

   During the year ended December 31, 2021, the Company applied for and received loan proceeds in the amount of

   $20,000 in connection with COVID-19 Government-sponsored Canada Emergency Business Account ("CEBA")

   program, for a total CEBA loan of $60,000. The CEBA loan is non-interest bearing and matures on December 31, 2026.

6. Asset retirement obligations

   June 30, 2025		December 31, 2024
   Asset retirement obligations	$ 119,550	$ 115,731
   Provisions made during the period	$ 1,910	$ 3,819
   Total asset retirement obligation	$ 121,460	$ 119,550

   The Company has recorded asset retirement obligations of $121,460 (December 31, 2024 - $119,550) associated with the future decommissioning of weather monitoring equipment situated on the Wildmare Wind Energy Project site.

7. Share capital
   1. Authorized share capital

      The authorized share capital consists of an unlimited number of common shares without par value and 100 redeemable preferred shares.

   2. Common shares issued Balance December 31, 2024 and Number of common shares Amount June 30, 2025 295,193,938 $ 49,225,521

      At June 30, 2025, the Company had 295,193,938 common shares issued and outstanding (December 31, 2024 -295,193,938) and no preferred shares issued and outstanding. A summary of changes in share capital and reserves is contained on the unaudited interim condensed consolidated statements of changes in shareholders' deficiency for the six months ended June 30, 2025 and 2024.

8. Warrants

   The following table reflects the warrants issued and outstanding as of June 30, 2024:

   Expiry Date	Exercise Price	Balance December 31, 2023	Granted	Exercised	Expired		Balance June 30, 2024
   December 29,	2027 $ 0.08	300,000	-	-	-		300,000
   		300,000	-	-	-		300,000
   Weighted Average exercise price $	0.08 $	-	$	-	$	-	$	0.08

   The following table reflects the warrants issued and outstanding as of June 30, 2025,

   Expiry Date	Exercise Price	Balance December 31, 2024	Granted	Exercised		Expired		Balance June 30, 2025
   June 27, 2027	$ 0.07	4,000,000	-	-		-		4,000,000
   July 19, 2027	$ 0.07	9,000,000	-	-		-		9,000,000
   July 31, 2027	$ 0.07	1,000,000	-	-		-		1,000,000
   December 29, 2027 $ 0.08	300,000		-	-		-		300,000
   	14,300,000		-	-		-		14,300,000
   Weighted Average exercise price	$	0.07 $	-	$	-	$	-	$	0.07

9. Stock options

The Company has a common share Stock Option Plan (equity-settled). The Board of Directors of the Company may from time to time, at its discretion, and in accordance with the requirements of the TSX-V, grant to directors, officers, and technical consultants to the Company, non-transferable options to purchase common shares, exercisable for a period of up to five years from the date of grant. There are no vesting requirements pursuant to the stock option plan. The Board may add such provisions at its discretion on a grant-by-grant basis. However, stock options granted in respect of investor relations activities must vest quarterly over a minimum one-year period, pursuant to TSX-V policy. The Board of Directors have resolved that the Stock Option Plan authorize the directors to grant stock options up to a maximum of 10% of the number of common shares issued and outstanding at the time of grant. The "rolling" stock option plan has been in effect since the Company was listed on the TSX-V.

1. Stock options (continued)

   Details of the stock options outstanding as at June 30, 2024 are as follows:

   Expiry Date Exercise Price	Balance December 31, 2023		Granted		Exercised		Expired/ Cancelled		Balance June 30, 2024
   May 6, 2024 $ 0.06	4,189,286		-		-		-		4,189,286
   July 16, 2024 $ 0.06	2,000,000		-		-		-		2,000,000
   December 22, 2024 $ 0.08	1,000,000		-		-		-		1,000,000
   January 26, 2025 $ 0.08	300,000		-		-		-		300,000
   March 31, 2025 $ 0.05	1,800,000		-		-		-		1,800,000
   July 23, 2025 $ 0.05	1,600,000		-		-		-		1,600,000
   October 27, 2025 $ 0.05	400,000		-		-		-		400,000
   December 9, 2025 $ 0.06	100,000		-		-		-		100,000
   September 13, 2026 $ 0.22	1,050,000		-		-		-		1,050,000
   November 23, 2026 $ 0.18	1,000,000		-		-		-		1,000,000
   August 5, 2027 $ 0.09	4,475,000		-		-		-		4,475,000
   September 26, 2027 $ 0.11	100,000		-		-		-		100,000
   February 23, 2028 $ 0.08	900,000		-		-		-		900,000
   	18,914,286		-		-		-		18,914,286
   Weighted average exercise price	$	0.08	$	-	$	-	$	-	$	0.08

   Details of the stock options outstanding as at June 30, 2025 are as follows:

   Expiry Date Exercise Price	Balance December 31, 2024	Granted	Exercised	Expired/ Cancelled	Balance June 30, 2025
   January 26, 2025 $ 0.08	300,000	-	-	(300,000)	-
   March 31, 2025 $ 0.05	1,800,000	-	-	(1,800,000)	-
   July 23, 2025 $ 0.05	1,600,000	-	-	-	1,600,000
   October 27, 2025 $ 0.05	400,000	-	-	-	400,000
   December 9, 2025 $ 0.06	100,000	-	-	-	100,000
   September 13, 2026 $ 0.22	50,000	-	-	-	50,000
   November 23, 2026 $ 0.18	1,000,000	-	-	-	1,000,000
   August 5, 2027 $ 0.09	3,225,000	-	-	-	3,225,000
   September 26, 2027 $ 0.11	100,000	-	-	-	100,000
   February 23, 2028 $ 0.08	700,000	-	-	-	700,000
   	9,275,000	- - (2,100,000)			7,175,000
   Weighted average exercise price	$ 0.08	$ - $ - $ 0.05			$ 0.09

   As of June 30, 2025, the weighted average remaining contractual life of the Company's stock options is 1.55 years (December 31, 2024 - 1.64 years).

2. Share-based payments

   During the three months ended June 30, 2025, the Company granted nil stock options to directors, officers, and employees of the Company (2024 - nil) and recorded $nil (2024 - $2,544) of share-based payments for options that vested during the period. The compensation expense was based on the fair value of each stock option on the date of the grant using the Black-Scholes option pricing model.

3. Related party transactions and balances

   In addition to related party transactions and balances disclosed elsewhere in these unaudited condensed interim consolidated financial statements, the following are transactions that occurred during the six months ended June 30, 2025 and balances as at June 30, 2025 with related parties:

   • Included in trade and other payables as at June 30, 2025 is $697,664 (December 31, 2024 - $415,000) due to current and former officers and directors and a significant shareholder of the Company for consulting fees, salaries and benefits and expense reimbursements.

   • Included in short-term loans (note 6) as at June 30, 2025 is $137,500 (December 31, 2024 - $137,500) due to current directors of the Company.

   • Included in interest expense as at June 30, 2025 is $10,547 (June 30, 2024 - $25,284) due to current directors of the Company.

   • Included in professional fees as at June 30, 2025 is $52,783 (June 30, 2024 - $48,781) to Marrelli Support Services Inc., a company which the CFO is related to. As of June 30, 2025, the company had been invoiced, net payments, a total of $67,630 which is included in trade and other payables.

     Key management includes members of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, and the Corporate Secretary. The aggregate compensation paid or accrued to key management personnel during the six months ended June 30, 2025 and 2024 were as follows:

     Three months ended Six months ended June 30, June 30,

     	2025	2024	2025	2024
     Salaries and benefits	71,752	83,333	133,752	125,000
     Share-based payments	-	-	-	1,413
     Total	$ 71,752	$ 83,333	$ 133,752	$ 126,413

4. Segmented information

The Company identified the operating segments as outlined in the table below based on the nature of operations and asset class. Geographical segment information is provided by country of operation.

The Company has identified two operating segments: Solar EPC and Solar Generation from Solar Facilities. For the three- and six-month periods ended June 30, 2025 and 2024, all of the Company's revenues and cost of goods sold were attributable to the Solar EPC segment. As of June 30, 2025 and December 31, 2024, the Company's assets and non-current assets were attributable to each of these segments as follows:

During the six months ended June 30, 2025 the Company had three (three months ended March 31, 2024 - three) customers that individually accounted for more than 10% of consolidated revenue.