Chrysalis 12 — Management Reports 2026

Apr 21, 2026

CHRYSALIS 12

Chrysalis 12 Inc.
(A Capital Pool Company)

Management’s discussion and analysis
For the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to
December 31, 2024

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Chrysalis 12 Inc.
Notes to the unaudited interim consolidated financial statements
For the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to December 31, 2024 (in Canadian Dollars)

Dated: April 17, 2026

The following management's discussion and analysis ("MD&A") of the financial condition and results of operations of Chrysalis 12 Inc. (the "Company") was prepared by management of the Company for the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to December 31, 2024 and should be read in conjunction with the Company's audited financial statements for the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to December 31, 2024 (the "Financial Statements"). Additional information including the Company's final prospectus dated July 31, 2025, is available on SEDAR+ at www.sedarplus.ca.

The financial statements have been prepared in accordance with IFRS® Accounting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). All amounts are expressed in Canadian dollars unless otherwise stated. Other information contained in this document has also been prepared by management and is consistent with the data contained in the Financial Statements.

The Company's certifying officers are responsible for ensuring that the Financial Statements and MD&A do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made. The Company's certifying officers certify that the Financial Statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the Company as the date of and for the periods presented in the interim filings.

The Audit Committee and the Board of Directors provide an oversight role with respect to all public financial disclosures by the Company. The Board of Directors approves the Financial Statements and MD&A after the completion of its review and recommendation for approval by the Audit Committee, which meets periodically to review all financial reports, prior to filing.

Forward-Looking Statements

Certain statements contained in this document constitute "forward-looking statements". All statements other than statements of historical fact contained in this MD&A, including, without limitation, those regarding the Company's future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words "believe", "expect", "aim", "intend", "plan", "continue", "will", "may", "would", "anticipate", "estimate", "forecast", "predict", "project", "seek", "should" or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company's expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.

Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to risks associated with: limited operating history; no history of earnings or payment of any dividends; unlikely to generate earnings or pay dividends in the immediate or foreseeable future; no current business operations; no current assets other than cash; ability to complete a qualifying transaction; ability to raise additional funds if required; potential dilution of shares as a result of potential qualifying transaction; reliance on management team; conflicts of interest among certain directors and officers of the Company; lack of liquidity for shareholders of the Company; and market risk. See "Risks and Uncertainties".

Management provides forward-looking statements because it believes they provide useful information to

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Chrysalis 12 Inc.

Notes to the unaudited interim consolidated financial statements

For the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to

December 31, 2024

(in Canadian Dollars)

readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes. Consequently, all of the forward-looking statements made in this MD&A are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this MD&A and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

The forward-looking statements in this MD&A are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future, including assumptions regarding business and operating strategies.

Description of the Business

Chrysalis 12 Inc. was incorporated under the Business Corporations Act (OBCA) of Ontario on December 2, 2024. The Company is classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange (the "Exchange") corporate finance manual.

On October 3, 2025, the Company completed its initial public offering of 6,000,000 shares at $0.10 per share for gross proceeds of $600,000. The Company's shares began trading on the Exchange on October 3, 2025 under the symbol "RTO.P".

The Company has no assets other than cash and short-term investments and proposes to identify and evaluate potential acquisitions or businesses, and once identified and evaluated, to negotiate an acquisition or participation subject to receipt and, if required, shareholder's approval.

The Company's continuing operations as intended are dependent upon its ability to identify, evaluate and negotiate an acquisition of a participation in or an interest in properties, assets or businesses. Such an acquisition will be subject to regulatory approval and, if required, shareholder approval.

The head office and the registered head office of the Company is located at Suite 1600, 1 First Canadian Place, 100 King Street West, Toronto, Ontario, M5X 1G5.

Selected Financial Information

The following selected financial data is derived from the Financial Statements of the Company prepared within acceptable limits of materiality and are in accordance with International Financial Reporting Standards applicable to the preparation of interim Financial Statements, including IAS 34 and IFRS 1.

Selected Statement of Financial Position Data

	Three Months Ended ($)
	September 30, 2025	June 30, 2025	March 31, 2025	December 31, 2024
Net working capital	184,935	200,512	262,298	180,220
Total current assets	230,097	259,578	267,078	185,000
Total current liabilities	45,162	59,066	4,780	4,780
Total shareholders' equity	184,935	200,512	262,298	180,220

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Chrysalis 12 Inc.
Notes to the unaudited interim consolidated financial statements
For the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to
December 31, 2024
(in Canadian Dollars)

	Three Months Ended ($)
				December 31, 2025
Net working capital				650,637
Total current assets				664,780
Total current liabilities				14,143
Total shareholders’ equity				650,637

Variations over the quarters are related to the increase in financing activities and expenses as the Company prepares for its initial public offering.

Selected Statement of Operations Data

	Three Months Ended ($)
	September 30, 2025	June 30, 2025	March 31, 2025	December 31, 2024
General & administrative expenses	15,577	61,786	32,922	4,780
Net loss and comprehensive loss	(15,577)	(61,786)	(32,922)	(4,780)
Basic and diluted loss per share	(0.00)	(0.02)	(0.01)	(0.00)
	Three Months Ended ($)
---	---	---	---	---
				December 31, 2025
General & administrative expenses				(23,397)
Share base compensation				(111,840)
Net loss and comprehensive loss				(135,237)
Basic and diluted loss per share				(0.00)

Discussion of Operations

The Company does not have any operations and will not conduct any business other than the identification and evaluation of business and assets for potential acquisition.

Variations over the quarters are related to the increase in expenses as the Company prepared for and completed its initial public offering. The Company also reclassified all filing fees paid during the nine-month period ended September 30, 2025 and legal expenses paid to the Agent during the three-month period ended March 31, 2025, as share issuance costs in connection with the IPO that was completed during the three-month period ended December 31, 2025.

Additional Disclosure for Venture Companies without Significant Revenue

The following table sets forth a breakdown of material components of the general and administration costs of

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Chrysalis 12 Inc.
Notes to the unaudited interim consolidated financial statements
For the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to
December 31, 2024
(in Canadian Dollars)

the Company for the years ended December 31, 2025 and 2024.

	As at December 31, 2025	As at December 31, 2024
Professional fees	96,512	4,780
Listing & regulatory fees	32,611	-
General & administrative	10,884	-
	$ 140,007	$ 4,780

Liquidity, Capital Resources, and Outlook

As at December 31, 2025, the Company had working capital of $650,637. This included $158,456 in cash and cash equivalents, $500,000 in a short-term investment, $6,324 in interest receivable and $14,143 in liabilities. Management believes that it has sufficient cash and cash equivalents to meet its ongoing obligations and its objective of completing a Qualifying Transaction. However, additional equity or debt financing may be required. Except as described in the Company's final prospectus dated July 31, 2025, the funds raised pursuant to the Company's initial public offering, and any subsequent financing will be utilized only for the identification and evaluation of potential Qualifying Transactions. There can be no assurance that the Company will be able to obtain adequate financing to complete a Qualifying Transaction.

Financing Activities and Capital Expenditures

On December 2, 2024, the Company issued 1 share for total proceeds of $0.01.

On December 19, 2024, the Company purchased the above-referenced 1 share for $0.01 and issued 3,700,000 shares for total net proceeds of $185,000.

On January 31, 2025, the Company issued 2,300,000 shares for total net proceeds of $115,000.

On October 3, 2025, the Company completed its initial public offering of 6,000,000 shares at $0.10 per share for gross proceeds of $600,000. The Company paid an aggregate of $110,900 in cash commission, corporate administration fee, legal and other expenses incurred by the Agent. In addition, the Company granted 600,000 non-transferable warrants to the Agent entitling the Agent to purchase common shares at a price of $0.10 per share. The Agent options expire on October 3, 2030. The agent warrants were fair valued at $45,240 using the Black-Scholes option pricing model under the following assumptions: risk free rate – 2.74%; expected dividend – nil; expected life – 5 years; expected volatility – 100%.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements as at December 31, 2025.

Transactions with Related Parties

Key management personnel consist of officers and directors of the Company. No compensation was paid to key management personnel during the current period.

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Chrysalis 12 Inc.

Notes to the unaudited interim consolidated financial statements

For the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to

December 31, 2024

(in Canadian Dollars)

Transactions with related parties are incurred in the normal course of business and initially measured at fair value.

There was $111,840 of share-based compensation recorded for related parties.

During the period ended December 31, 2025, the Company incurred legal services in the amount of $65,294 (2024 - $4,780), (including taxes and disbursements) from a law firm in which a director is a partner. As at December 31, 2025, $582 (2024 - $4,980), (including taxes and disbursements) is included in accounts payable and accruals related to these services.

Critical Accounting Estimates and Policies

The Company's significant accounting policies and the adoption of new accounting policies are disclosed in the audited Financial Statements for the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to December 31, 2024.

Financial Instruments and Other Instruments

The Company measures its financial assets and financial liabilities at fair value on initial recognition, which is typically the transaction price unless a financial instrument contains a significant financing component. Subsequent measurement is dependent on the financial instrument's classification which in the case of financial assets, is determined by the context of the Company's business model and the contractual cash flow characteristics of the financial asset. Financial assets are classified into the following categories: (1) measured at amortized cost and (2) fair value through profit and loss ("FVTPL") and (3) fair value through other comprehensive income ("FVTOCI"). Financial liabilities are subsequently measured at amortized cost, other than financial liabilities that are measured at FVTPL or designated as FVTPL where any change in fair value resulting from an entity's own credit risk is recorded as other comprehensive income ("OCI"). The Company does not employ hedge accounting for its risk management contracts currently in place.

The Company classifies its cash, short-term investment, accounts payable and accrued liabilities as measured at amortized cost. The contractual cash flows received from the financial assets are solely payments of principal and interest and are held within a business model whose objective is to collect the contractual cash flows

Disclosure of Outstanding Share Data

As at the date of this MD&A, the following is a description of the outstanding equity securities and convertible securities previously issued by the Company:

	Authorized	Outstanding
Voting or equity securities issued and outstanding	Unlimited Common Shares	12,000,000 Common Shares
Securities convertible or exercisable into voting or equity securities – stock options	Directors' and officers' stock options to acquire up to 10% of the outstanding Common Shares	Directors' and officers' stock options to acquire up to 1,200,000 Common Shares at $0.05 per share

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Chrysalis 12 Inc.
Notes to the unaudited interim consolidated financial statements
For the year ended December 31, 2025 and the period from December 2, 2024 (date of Incorporation) to December 31, 2024 (in Canadian Dollars)

	Agent's options to acquire up to 10% of the Common Shares sold in connection with the initial public offering	Agent's options to acquire up to 600,000 Common Shares at $0.10 per share

Risks and Uncertainties

The Company has a limited history of existence. There can be no assurance that a Qualifying Transaction will be completed. Equity or debt financing may be required to complete a Qualifying Transaction. There can be no assurance that the Company will be able to obtain adequate financing to continue. The securities of the Company should be considered a highly speculative investment. The following risk factors should be given special consideration when evaluating an investment in any of the Company's securities:

(a) until completion of a Qualifying Transaction, the Company is not permitted to carry on any business other than the identification and evaluation of potential Qualifying Transactions;

(b) the Company has only limited funds with which to identify and evaluate potential Qualifying Transactions;

(c) there can be no assurance that the Company will be able to successfully complete a proposed Qualifying Transaction;

(d) there can be no assurance that an active and liquid market for the common shares will develop and an investor may find it difficult to resell its common shares;

(e) trading in the common shares may be halted at any time and may remain halted for an indefinite period of time in connection with a proposed Qualifying Transaction; and

(f) trading in the common shares may be halted at other times for other reasons, including for failure by the Company to submit documents to the Exchange in the time periods required.

Disclosure Controls and Procedures

Management has designed disclosure controls and procedures to provide reasonable assurance that material information relating to the Company is made known to the Chief Executive Officer and the Chief Financial Officer by others within the Company, in an accurate and timely manner in order for the Company to comply with its continuous disclosure and financial reporting obligations and in order to safeguard assets.

Other Information

Additional information about the Company is available on SEDAR+ at www.sedarplus.ca