Quarterly Report for Quarter Ending February 28, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of the Company's financial condition and results of operations should be read in conjunction with the Company's unaudited condensed consolidated financial statements, the notes to those financial statements and other financial information appearing elsewhere in this document. In addition to historical information, the following discussion and other parts of this document contain forward-looking statements that reflect plans, estimates, intentions, expectations and beliefs. Actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those set forth in the "Risk Factors" in Part II, Item 1A of this Quarterly Report.

The discussion provided in this Quarterly Report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended May 31, 2025, filed with the United States Securities and Exchange Commission (the "SEC") on September 2, 2025.

Overview

The Company was incorporated under the laws of the State of Nevada on March 19, 2010. On April 26, 2016, the Company formed a wholly owned subsidiary, Cell MedX (Canada) Corp., ("Cell MedX Canada", or the "Subsidiary") under the laws of the Province of British Columbia.

Effective November 1, 2024, the Company completed a 1-for-15 reverse split (the "Reverse Split") of its common stock. All share and per-share amounts in this Quarterly Report on Form 10-Q have been retrospectively adjusted.

Concurrent with the Reverse Split, the Company amended its articles of incorporation to change the Company's name from "Cell MedX Corp." to "Stimcell Energetics Inc."

Stimcell Energetics Inc. is a biotech company focused on the discovery, development and commercialization of therapeutic and non-therapeutic products that promote general health, anti-aging, pain relief, wellness and alleviate complications associated with medical conditions including, but not limited to diabetes, insulin resistance, high blood pressure, neuropathy and kidney function. The Company is engaged in development and manufacturing of therapeutic devices based on the proprietary eBalance® Technology, which harnesses the power of microcurrents and their effects on the human body.

Recent Corporate Developments

In February 2025, the Company announced a new partnership with ADM Tronics Unlimited, Inc. to redesign the Company's proprietary eBalance® microcurrent device, transforming it into a compact, affordable consumer unit optimized for home use, complete with additional diagnostic features. The Company's vision is to redesign its eBalance® to empower individuals to take control of their health from the comfort of home. The new version will be smaller and more cost-effective than its predecessors, making microcurrent technology accessible to a broader audience. Additionally, it will feature additional diagnostics, including a real-time assessment of cellular energy capacity, treatment tracking, and personalized user profiles.

On December 1, 2025, the Company entered into a service agreement with the St. Boniface Hospital Albrechtsen Research Centre, affiliated with the University of Manitoba, and Principal Investigator, Professor Paul Fernyhough, to explore the effects of eBalance® device on mitochondrial function in cultured sensory neurons to further define the physiological action of microcurrents.

Under the agreement, Dr. Fernyhough's team will conduct a series of experiments to assess how eBalance® stimulation influences key aspects of cellular energy production by mitochondria. Using established biological assays in Dr. Fernyhough's laboratory, the study will measure oxygen consumption rates (OCR) to evaluate impacts on the electron transport chain, ATP production, glycolysis, basal respiration, maximal respiration, spare respiratory capacity, coupling efficiency, and proton leak. Additional analyses will quantify enzyme activities such as AMP-activated protein kinase (AMPK) and levels of respiratory proteins through Western blotting. The project, expected to span approximately three months, involves acute and longer-term stimulation of dissociated adult rat dorsal root ganglia (DRG) neurons under controlled conditions. Replicates will ensure robust statistical analysis, with a comprehensive report provided at the study's conclusion. The study is expected to commence in mid-April.

Results of Operations for the Three and Nine Months ended February 28, 2026 and 2025

Operating results for the three and nine months ended February 28, 2026 and 2025, and the changes in the operating results between those periods are summarized in the table below.

	Three Months ended February 28,					Percentage Increase/ (Decrease)	Nine Months ended February 28,				Percentage Increase/ (Decrease)
	2026		2025				2026		2025
Operating expenses
Consulting fees	$	34,785		$	33,694	3.2%	$	103,980	$	103,331	0.6%
Foreign exchange		(30,146)			41,552	(172.6)%		(10,367)		78,117	(113.3)%
General and administrative expenses		8,208			32,847	(75.0)%		311,290		71,979	332.5%
Management fees		22,500			22,500	-%		67,500		67,500	-%
Research and development costs		36,561			493	7,316.0%		144,905		493	29,292.5%
Total operating expenses		71,908			131,086	(45.1)%		617,308		321,420	92.1%
Forgiveness of debt		-			-	n/a		-		(1,569)	(100.0)%
Interest		18,658			9,451	97.4%		48,608		27,113	79.3%
Net loss	$	90,566		$	140,537	(35.6)%	$	665,916	$	346,964	91.9%

Revenues

The Company did not have any revenue-generating activities during the three and nine months ended February 28, 2026 and 2025.

Operating Expenses

During the three months ended February 28, 2026, the Company's operating expenses decreased by 45.1% from $131,086 the Company incurred during the three months ended February 28, 2025, to $71,908 incurred during the three months ended February 28, 2026. The largest change was associated with a $71,698 decrease in foreign exchange loss, driven by a weakening Canadian dollar relative to the U.S. dollar. As of February 28, 2026, the Company recognized a foreign exchange gain of $30,146, compared with $41,552 foreign exchange loss during the same period in 2025. The Company's general and administrative expenses decreased from $32,847 during the three months ending February 28, 2025, to $8,208 in the three months ending February 28, 2026. The primary driver of this change was a $17,334 reduction in corporate communications, as the Company had no expenditures on corporate communications during the three months ended February 28, 2026. Other notable changes included a $10,995 decline in regulatory fees, leading to a recapture of $2,996 (February 28, 2025 - $7,999), and a $1,990 decrease in audit and accounting fees to $6,000 (February 28, 2025 - $7,990). These decreases were partly offset by a $3,944 increase in office expenses to $4,775 (February 28, 2025 - $4,775), and a $1,208 rise in professional fees to $157 (February 28, 2025 - recapture of $1,051). All other expenses included in general and administrative fees remained relatively stable.

The reduction in operating expenses was partly offset by a $36,068 increase in research and development fees for the three months ended February 28, 2026. The research and development fees during the current period were associated with the Company's decision to redesign the eBalance® Home device into a compact, affordable consumer unit optimized for home use, which resulted in an engagement of ADM Tronics Unlimited, Inc. During the comparative three months ended February 28, 2025, the company incurred $493 in research and development.

Along with the changes in operating expenses mentioned above, the Company also incurred a management fee of $22,500, which remained unchanged compared to the prior period, and consulting fees of $34,785, representing an increase of $1,091 from $33,694 incurred in the comparative period ending February 28, 2025.

On a year-to-date basis, the Company's operating expenses increased by 92.1% from $321,420 the Company incurred during the nine months ended February 28, 2025, to $617,308 the Company incurred during the nine months ended February 28, 2026. The most significant changes were as follows:

·General and administrative expenses for the nine months ending February 28, 2026, increased by $239,311, or 332.5%, from $71,979 during the nine months ending February 28, 2025, to $311,290 during the nine months ending February 28, 2026. The main driver of this change was a $231,882 increase in corporate communications, which rose to $254,361 in the current period from $22,479 in the same period last year. Other notable changes included a $6,062 increase in office expenses to $8,439 (February 28, 2025 - $2,377) and a $4,025 rise in accounting and audit fees to $22,211 (February 28, 2025 - $18,186). These increases were partly offset by a $7,473 decrease in professional fees, from $9,071 during the comparative period to $1,598 during the current period ended February 28, 2026. All other expenses included in general and administrative expenses remained relatively stable.

·The Company incurred $144,905 in research and development fees for the nine months ended February 28, 2026. The research and development fees during the current period were associated with the Company's decision to redesign the eBalance® Home device into a compact, affordable consumer unit optimized for home use, which resulted in an engagement of ADM Tronics Unlimited, Inc. During the comparative nine months ended February 28, 2025, the Company incurred $493 in research and development. Management expects elevated research and development expenditures to continue in the near term as development progresses.

·Foreign exchange loss decreased by $88,484 to a gain of $10,367 for the nine months ended February 28, 2026, as compared to a loss of $78,117 for the comparative period ended February 28, 2025. The foreign exchange loss was associated with a weakening Canadian dollar relative to the U.S. dollar.

Along with the changes in operating expenses mentioned above, the Company also incurred $67,500 in management fees, unchanged from the prior period, and $103,980 in consulting fees, an increase of $649 from $103,331 in the comparative period ending February 28, 2025.

Other Items

During the three months ended February 28, 2026, the Company accrued $17,116 (February 28, 2025 - $7,917) in interest associated with outstanding notes payable to related parties and $1,542 (February 28, 2025 - $1,534) in interest accrued on other vendor payables.

During the nine months ended February 28, 2026, the Company accrued $44,150 (February 28, 2025 - $22,156) in interest on outstanding notes payable to related parties and $4,458 (February 28, 2025 - $4,958) in interest on other vendor payables. During the nine months ended February 28, 2025, the Company discharged an outstanding debt to its vendors due to the balances exceeding the statute of limitations, which resulted in a gain on forgiveness of debt of $1,569. The Company did not have similar transactions during the nine months ended February 28, 2026.

Liquidity and Capital Resources

Working Capital

	As at February 28, 2026			As at May 31, 2025			Percentage Increase
Current assets	$	34,521		$	21,222		62.7%
Current liabilities		1,712,941			1,267,508		35.1%
Working capital deficit	$	(1,678,420)		$	(1,246,286)		34.7%

As of February 28, 2026, the Company had a cash balance of $10,257, a working capital deficit of $1,678,420, and cash flows used in operations of $268,570 for the period then ended. During the nine months ended February 28, 2026, the Company funded its operations with $264,248 the Company borrowed from its related parties under non-secured lines of credit at 10% annual interest compounded monthly and due on demand.

The Company did not generate sufficient cash flows from its operating activities to satisfy its cash requirements for the nine months ended February 28, 2026. The amount of cash generated from the operations to date is significantly less than the Company's current debt obligations. A significant portion of the Company's liabilities is owed to related parties, certain of which are in default. While these parties have historically provided ongoing financial support, there

can be no assurance that such support will continue. There is no assurance that the Company will be able to generate sufficient cash from operations to repay the amounts owing under the outstanding notes and advances payable, or to service other debt obligations. If the Company is unable to generate sufficient cash flow from operations to repay the amounts owed when due, it may be required to raise additional financing from other sources. Based on current cash on hand and expected expenditures, the Company does not have sufficient liquidity to fund operations for the next twelve months without additional financing. Historically, the Company has relied significantly on financing from related parties and/or equity financing. The outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that the Company will be able to continue as a going concern.

Cash Flows

	Nine months ended February 28,
	2026			2025
Cash flows used in operating activities	$	(268,570)		$	(83,152)
Cash flows generated by financing activities		264,248			46,745
Effects of foreign currency exchange on cash		(2)			(330)
Net decrease in cash during the period	$	(4,324)		$	(36,737)

Net Cash Used in Operating Activities

Net cash used in operating activities during the nine months ended February 28, 2026, was $268,570. This cash was mainly used to cover cash operating expenses of $377,479, which were represented by a net loss of $665,916, reduced by non-cash items totaling $288,437, to decrease accrued liabilities by $19,175, to increase other current assets by $17,635, and to decrease accounts payable by $7,311. These uses of cash were partly offset by a $153,030 increase in amounts due to related parties.

Net cash used in operating activities during the nine months ended February 28, 2025, was $83,152. This cash was primarily used to cover cash operating expenses of $244,673, which were calculated by reducing a net loss of $346,964 by the non-cash items totaling $102,291, to decrease accrued liabilities by $19,215 and to increase other current assets by $7,877. These uses of cash were offset by a $163,949 increase in amounts due to related parties and a $24,664 increase in accounts payable.

Non-cash transactions

During the nine months ended February 28, 2026, net loss was affected by the following expenses that did not have any impact on cash used in operations:

·$250,000 (February 28, 2025 - $Nil) in investor relations activities, which were paid for through the issuance of common shares;

·$44,150 (February 28, 2025 - $22,156) in interest accrued on the outstanding notes due to related parties;

·$4,458 (February 28, 2025 - $4,958) in interest accrued on the vendor payables; and

·$10,171 in unrealized foreign exchange gain (February 28, 2025 - $76,746 loss), which resulted from fluctuations of the Canadian dollar, the functional currency of Cell MedX Canada, in relation to the U.S. dollar, the functional currency of the parent company, being also the Company's reporting currency.

·During the comparative period ended February 28, 2025, the Company recognized a $1,569 gain on forgiveness of debt, which was associated with the write-off of debt that exceeded the statute of limitations.

Net Cash Provided by Financing Activities

During the nine months ended February 28, 2026, the Company borrowed $200,000 from Mr. Richard Jeffs, the Company's major shareholder and the father of the Company's CEO and President, Mr. David Jeffs, under a revolving credit line, which accumulates interest at 10% per annum compounded monthly and is due on demand. During the same period, the Company borrowed an additional $64,248 from Mrs. Susan Jeffs, the mother of the Company's CEO and President, Mr. David Jeffs, under revolving US$ and CAD$ credit lines that accrue interest at 10% per annum, compounded monthly, and are due on demand.

During the nine months ended February 28, 2025, the Company borrowed $30,000 from Mr. Vahabzadeh, the Company's director, in exchange for a 10% note payable due on demand. In addition, the Company borrowed $8,724

from Mr. Richard Jeffs and a further $8,021 from Mrs. Susan Jeffs under revolving credit lines, which accumulate interest at 10% per annum compounded monthly and are due on demand.

Net Cash Used in Investing Activities

The Company did not have any investing activities during the nine months ended February 28, 2026 and 2025.

Going Concern

The notes to the Company's unaudited condensed consolidated financial statements as at February 28, 2026, disclose an uncertain ability for the Company to continue as a going concern for the next twelve-month period. The Company's current business operations are in an early development stage and as such, its ability to generate revenue from the operations is very minimal. The Company's research and development as well as marketing plans require large capital expenditures. Due to the financial difficulties the Company had faced, the research and development plans associated with the eBalance® technology were temporarily abandoned. In February 2025, the Company engaged ADM Tronics Unlimited, Inc., a leader in electronic medical device engineering, to redesign eBalance® microcurrent device, transforming it into a compact consumer unit, optimized for home use. Management plans to support its operations and the redesign of the eBalance® microcurrent device through equity or debt financing.

As at February 28, 2026, the Company had accumulated a deficit of $11,527,472 since inception and additional funding will be required to support the operations. The Company's continuation as a going concern depends upon the continued financial support of its shareholders, its ability to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations. The unaudited condensed consolidated interim financial statements do not give effect to any adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the Company's financial statements.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

An appreciation of the Company's critical accounting policies is necessary to understand its financial results. These policies may require management to make difficult and subjective judgments regarding uncertainties, and as a result, such estimates may significantly impact the financial results. The precision of these estimates and the likelihood of future changes depend on a number of underlying variables and a range of possible outcomes. The Company has applied its critical accounting policies and estimation methods consistently.

Changes in and Disagreements with Accountants on Accounting Procedures and Financial Disclosure

None.