dynaCERT Inc. — Interim / Quarterly Report 2026

May 13, 2026

DYNACERT INC.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2026
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED)

Notice To Reader

The accompanying unaudited condensed consolidated interim financial statements of DynaCERT INC. (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed consolidated interim financial statements have not been reviewed by the Company's auditors.

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DynaCERT INC.
Condensed Consolidated Interim Statements of Financial Position
(Expressed in Canadian Dollars)
Unaudited

As at,	March 31, 2026	December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$ 510,229	$ 1,964,788
Accounts and other receivable (note 3)	12,948	25,757
Sales tax receivable	96,450	191,813
Inventory (note 4)	2,179,397	1,952,929
Prepaid expenses	60,240	78,587
Deposits	126,160	142,076
Total current assets	2,985,424	4,355,950
Non-current assets
Investment in associate (note 10)	20,000	20,000
Property & equipment (note 5)	698,875	739,519
Intangible assets (note 6)	188,431	216,890
Right-of-use asset (note 7)	2,433,494	2,588,275
Total assets	$ 6,326,224	$ 7,920,634

DEFICIENCY AND LIABILITIES

Current liabilities
Accounts payable and accrued liabilities (note 17)	$ 1,307,502	$ 1,654,155
Customer deposits (note 20)	507,691	507,051
Lease obligation (note 8)	461,599	-
Warranty provision (note 19)	915,859	914,151
Loans payable (note 11)	1,679,249	1,153,418
Convertible note (note 12)	1,046,357	2,221,506
Total current liabilities	5,918,257	6,450,281
Non-current liabilities
Lease obligation (note 8)	1,991,656	2,607,171
Convertible note (note 12)	1,335,370	-
Total liabilities	9,245,283	9,057,452
Shareholders' deficiency
---	---	---
Share capital (note 13)	110,262,994	110,262,994
Equity portion of convertible notes	884,001	884,001
Warrant reserve	725,121	788,004
Share-based payments reserve	5,759,343	6,065,069
Deficit	(120,550,518)	(119,136,886)
Total shareholders' deficiency	(2,919,059)	(1,136,818)
Total liabilities and shareholders' deficiency	$ 6,326,224	$ 7,920,634

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

Nature of operations and going concern (note 1)
Commitments and contingencies (note 20)
Subsequent event (note 21)

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DynaCERT INC.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
Unaudited

| | Three months ended
March 31, | |
| --- | --- | --- |
| | 2026 | 2025 |
| Revenue | $ 37,981 | $ 299,580 |
| Operating expenses | | |
| Cost of goods sold (note 4) | 177,313 | 535,920 |
| Inventory impairment write down | (2,481) | (319) |
| Provision for warranties (note 19) | 17,064 | 22,066 |
| Accretion (note 12) | 118,549 | 71,380 |
| Business development and marketing | 126,689 | 299,418 |
| General and administrative | 504,605 | 680,666 |
| Interest expense | 69,622 | 45,406 |
| Legal and audit | 72,725 | 178,096 |
| Product and software development | 164,349 | 55,262 |
| Share-based compensation (note 11 and 14) | 45,569 | 65,615 |
| Wages, benefits, and third-party consultants (note 17) | 551,913 | 557,469 |
| Total operating expenses | 1,845,917 | 2,510,979 |
| Other items | | |
| Foreign exchange loss | 19,874 | 4,748 |
| Loss on modification of debt (note 12) | - | 279,477 |
| Total loss and comprehensive loss | $ (1,827,810) | $ (2,495,624) |
| Basic and diluted net loss per share (note 16) | $ (0.004) | $ (0.005) |
| Weighted average number of common shares
outstanding - basic and diluted (note 16) | 508,286,682 | 455,981,960 |

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

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DynaCERT INC.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in Canadian Dollars)
Unaudited

	Three months ended March 31,
	2026	2025
Operating activities
Net loss for the period	$ (1,827,810)	$ (2,495,624)
Adjustments for:
Accretion on loans payable	118,549	71,380
Accrued interest	67,506	43,287
Amortization of intangible assets	30,397	31,889
Amortization of right-of-use asset	120,141	104,441
Depreciation of property and equipment	44,476	58,379
Interest paid	24,611	7,673
Share-based compensation	45,569	65,615
Inventory impairment recovery	(2,481)	(319)
Provision for warranties	17,064	22,066
Loss on modification of warrants	-	279,477
Changes in non-cash working capital items:
Sales tax receivable, and accounts and other receivables	108,172	(193,931)
Inventory	(223,987)	162,665
Prepaid expenses	18,347	(39,896)
Accounts payable and accrued liabilities	(346,653)	(478,510)
Customer deposits	640	640
Deposits	15,916	(128,917)
Warranty provision	(15,356)	(7,529)
Net cash used in operating activities	(1,804,899)	(2,497,214)
Investing activities
Acquisition of property and equipment	(3,832)	-
Acquisition of intangible assets	(1,938)	(2,363)
Net cash used in investing activities	(5,770)	(2,363)
Financing activities
Proceeds from issuance of private placement (net of costs)	-	5,000,000
Proceeds from issuance of loans	500,000	750,000
Lease obligation expense	(143,890)	(125,417)
Net cash provided by financing activities	356,110	5,624,583
Increase (decrease) in cash and cash equivalents	(1,454,559)	3,125,006
Cash and cash equivalents, beginning of period	1,964,788	86,300
Cash and cash equivalents, end of period	$ 510,229	$ 3,211,306

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

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DynaCERT INC.
Condensed Consolidated Interim Statements of Changes in Deficiency
(Expressed in Canadian Dollars)
Unaudited

	Share Capital	Warrants reserve	Share-based reserve	Equity component of convertible note	Deficit	Total
Balance, December 31, 2024	$ 100,314,944	$ 519,072	$ 8,198,411	$ 98,683	$(111,374,806)	$ (2,243,696)
Units issued in private placement	5,000,000	-	-	-	-	5,000,000
Share-based compensation	-	-	65,615	-	-	65,615
Net loss for the period	-	-	-	-	(2,495,624)	(2,495,624)
Balance, March 31, 2025	$ 105,314,944	$ 519,072	$ 8,264,026	$ 98,683	$(113,870,430)	$ 326,295
Balance, December 31, 2025	$ 110,262,994	$ 788,004	$ 6,065,069	$ 884,001	$(119,136,886)	$ (1,136,818)
Expiry of options (note 14)	-	-	(351,295)	-	351,295	-
Expiry of warrants (note 15)	-	(62,883)	-	-	62,883	-
Share-based compensation (note 14)	-	-	45,569	-	-	45,569
Net loss for the period	-	-	-	-	(1,827,810)	(1,827,810)
Balance, March 31, 2026	$ 110,262,994	$ 725,121	$ 5,759,343	$ 884,001	$(120,550,518)	$ (2,919,059)

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

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

1. Nature of operations and going concern

Nature of business

DynaCERT Inc. ("dynaCERT" or the "Company") was incorporated under the laws of the Province of Ontario. The address of the Company's head office is 501 Alliance Avenue – Suite 101, Toronto, Ontario. The Company's shares were listed on the TSX-V under the trading symbol DYA until July 7, 2020, at which point the common shares of the Company commenced trading on the Toronto Stock Exchange ("TSX") under the same trading symbol and were concurrently delisted from the TSX-V. On June 9, 2020, the common shares of the Company were listed on the USA OTCQX under the symbol "DYFSF" and delisted from the OTCQB. These unaudited condensed consolidated interim financial statements include the results of DynaCERT and its wholly owned subsidiaries, DynaCERT GmbH Inc., its wholly owned German subsidiary, and DynaCERT International Strategic Holdings Inc. ("DISH").

The Company is engaged in the design, engineering, testing, manufacturing and distribution of a patent pending transportable hydrogen generator aftermarket product. The system is a patent pending aftermarket retrofit product that provides performance enhancements by injecting hydrogen and oxygen into the air intake manifold, resulting in improved fuel efficiency and reduced carbon emissions.

Going concern uncertainty

At each reporting period, management assesses the basis of preparation of the unaudited condensed consolidated interim financial statements. These unaudited condensed consolidated interim financial statements have been prepared on a going concern basis in accordance with IFRS. The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. These unaudited condensed consolidated interim financial statements do not include any adjustments to amounts and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

For the three months ended March 31, 2026, the Company incurred a net loss of $1,827,810 (March 31, 2025 - $2,495,624) and had negative operating cash flows of $1,804,899 (March 31, 2025 - $2,497,214). Although the Company has generated revenue from customer sales, the sales volumes achieved to date have not been sufficient to generate the margins required to cover the Company's operating costs and product and software development costs. The Company has an accumulated deficit of $120,550,518 since inception (December 31, 2025 - $119,136,886).

The Company's ability to continue its operations and to realize assets at their carrying values is dependent upon its ability to generate cash flows from operations and to complete negotiations to obtain and successfully close additional funding from debt financing, equity financing or through other arrangements. Management has determined that there is a material uncertainty related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern and, therefore, that it may be unable to realize its assets and discharge its liabilities in the normal course of business. While the Company has been successful in arranging financing in the past, there can be no assurance that any debt financing or any equity offerings will be sufficient to create cash flow runway in light of the impact of the current state of the capital markets.

Effective April 2, 2025, with certain additional tariffs subsequently imposed at a later date, the United States imposed various tariffs on goods imported from Canada, the most significant of which were a 35% tariff on all imports that don't comply with the Canada-United States-Mexico Agreement (CUSMA), a 25% tariff on all cars and trucks not built in the U.S., a 10% tariff on non-CUSMA compliant potash and energy products, a 50% tariff on aluminum and steel imports (became effective June 4), a 50% tariff on copper (became effective August 1), a 35% tariff on softwood lumber (became effective October 14) and a 25% tariff on upholstered wooden products and kitchen/bathroom cabinets and vanities (became effective October 14). On October 25th, President Trump further announced that he would increase tariffs on Canadian products by an additional 10%, but nothing has yet been officially established. Initially, in April, 2025, the Canadian Government subsequently imposed retaliatory tariffs at a rate of 25% on certain Canadian imports from the United States.

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

1. Nature of operations and going concern (continued)

Effective September 1, 2025, Canada removed the retaliatory tariffs. The tariffs imposed by the United States, and any further potential tariff response strategy by either country could adversely affect, among others, the demand and market prices for Canadian energy exports, inflation rates and the global supply chain which may be further impacted by restrictions on cross-border supply chains, potential increases in tariffs or additional regulatory barriers to trade. The impact, or potential impact, of these tariffs on the Company's financial results cannot be quantified at this time.

1. Basis of preparation

Statement of compliance

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IFRS").

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by IASB and interpretations issued by IFRIC.

The policies applied in these unaudited condensed consolidated interim financial statements are based on IFRS, which have been applied consistently to all periods presented. These unaudited condensed consolidated interim financial statements were issued and effective as of May 13, 2026, the date the Board of Directors approved the statements.

The preparation of financial statements in accordance with International Accounting Standards (IAS) 34 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity or areas where assumptions and estimates are significant to these unaudited condensed consolidated interim financial statements were the same as those that applied to the Company's annual consolidated financial statements as at and for the year ended December 31, 2025.

Basis of measurement

These unaudited condensed consolidated interim financial statements have been prepared under the historical cost basis, except for the revaluation of certain financial assets and financial liabilities to fair value.

Functional and presentation currency

These unaudited condensed consolidated interim financial statements are presented in Canadian dollars, which is the Company's presentation currency. The functional currency of each individual entity is measured using the currency of the primary economic environment in which the entity operates.

Basis of consolidation

These unaudited condensed consolidated interim financial statements include the results of DynaCERT and its wholly-owned subsidiaries, which include DynaCERT GmbH, its wholly-owned German subsidiary, and DISH.

These unaudited condensed consolidated interim financial statements incorporate the assets, liabilities and results of operations of all entities controlled by the Company. The effects of all transactions between entities in the consolidated group have been eliminated.

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

2. Basis of preparation (continued)

New accounting standards adopted

In May 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments – Disclosures. The amendments clarify the derecognition of financial liabilities and introduces an accounting policy option to derecognize financial liabilities that are settled through an electronic payment system. The amendments also clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features and the treatment of non-recourse assets and contractually linked instruments (CLIs). Further, the amendments mandate additional disclosures in IFRS 7 for financial instruments with contingent features and equity instruments classified at FVOCI. The Company adopted this amendment on January 1, 2026, and there was no material impact on the condensed consolidated interim financial statements.

New standards not yet adopted

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for annual periods beginning on or after January 1, 2027 or later periods. The Company is currently evaluating the impact of the adoption of these new standards on its financial statements and will adopt these pronouncements as of their effective date.

In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve reporting of financial performance. The new standard replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new categories and required subtotals in the statement of profit and loss and also requires disclosure of management-defined performance measures. It also includes new requirements for the location, aggregation and disaggregation of financial information. The standard is effective for annual reporting periods beginning on or after January 1, 2027, including interim financial statements. Retrospective application is required and early adoption is permitted.

3. Accounts and other receivables

	As at March 31, 2026	As at December 31, 2025
Accounts receivables	$ 854,275	$ 867,084
Allowance for expected credit losses (1)(2)	(841,327)	(841,327)
	$ 12,948	$ 25,757

(1) The expected credit loss provision arose due to the nature of applying the ECL model on the trade receivables.
(2) During the year ended December 31, 2025, and 2024, the Company recorded a specific provision for credit losses.

The following table reflects the loss allowance by class of financial instrument:

	For the three months ended March 31, 2026	For the year ended December 31, 2024
Opening balance	$ 841,327	$ 530,364
12 month expected credit losses	-	-
Lifetime ECL for increase credit risk	-	-
Lifetime ECL for trade receivables, contract assets or lease receivables	-	310,963
Total	$ 841,327	$ 841,327

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

1. Inventory

	As at March 31, 2026	As at December 31, 2025
Raw materials	$ 335,567	$ 435,830
Work in process	402,567	473,907
Finished goods	1,441,261	1,043,192
	$ 2,179,395	$ 1,952,929

During the three months ended March 31, 2026, $177,313 of inventory has been included in cost of goods sold (March 31, 2025 - $535,920). At March 31, 2026, an inventory provision of $2,847,041 (December 31, 2025 - $2,847,041) has been recognized to record inventory at the lower of cost and net realizable value. During the three months ended March 31, 2026, an inventory impairment recovery of $2,481 (March 31, 2025 – $319) has been recognized to reflect the impairment of inventories from its carrying amount to its net realizable value. It includes amounts with respect to excess, slow moving and obsolete inventory of raw materials, work in process and finished goods.

The amounts presented are net of inventory write-down provision.

1. Property and equipment

	March 31, 2026			December 31, 2025
	Accumulated Cost	Net Amortization	Book Value	Accumulated Cost	Net Amortization	Book Value
Plant equipment	$ 1,713,873	$ 1,525,490	$ 188,383	$ 1,713,873	$ 1,514,558	$ 199,315
Tooling equipment	390,274	390,274	-	390,274	390,274	-
Office equipment	243,760	241,360	2,400	243,760	241,233	2,527
Furniture and fixtures	618,588	574,612	43,976	614,756	572,505	42,251
Leasehold improvements	1,557,624	1,108,895	448,729	1,557,624	1,085,277	472,347
Vehicles	61,983	46,596	15,387	61,983	38,904	23,079
	$ 4,586,102	$ 3,887,227	$ 698,875	$ 4,582,270	$ 3,842,751	$ 739,519

1. Intangible assets

	March 31, 2026				December 31, 2025
	Cost	Accumulated Amortization	Impairment	Net Book Value	Cost	Accumulated Amortization	Impairment	Net Book Value
Patents	$ 1,057,803	$ 674,760	$ 303,422	$ 79,621	$ 1,055,866	$ 653,030	$ 303,422	$ 99,414
Trademarks	170,282	89,715	25,000	55,567	170,282	85,700	25,000	59,582
Software	599,404	546,161	-	53,243	599,403	541,509	-	57,894
Total	$ 1,827,489	$ 1,310,636	$ 328,422	$ 188,431	$ 1,825,551	$ 1,280,239	$ 328,422	$ 216,890

The Company has recorded an impairment of intangible assets related to patents in the amount of $303,422 due to the abandonment of some jurisdictions where the Company has not and does not plan to be selling its technology products going forward.

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

1. Intangible assets (continued)

The Company has recorded an impairment of intangible assets related to its trademarks of $25,000 due to an administrative abandonment of certain trademark applications and the resulting cancellation of certain related international registrations. This has resulted in a temporary loss of some of the company's exclusive rights to protect certain of its trademarks, should the Company be forced to defend those trademarks in those jurisdictions. As of March 31, 2026 and December 31, 2025, the Company has not been forced to defend its trademarks and expects to renew the applications going forward.

1. Right-of-use assets

Balance, January 1, 2025	$ 456,555
Additions	2,549,480
Amortization	(417,760)
Balance, December 31, 2025	2,588,275
Amortization	(120,141)
Lease termination	(34,640)
Balance, March 31, 2026	$ 2,433,494

Right-of-use assets consist of office equipment amortized over 48 months, and office lease is amortized over 60 months.

Maturity analysis - contractual undiscounted cash flows

As at March 31, 2026
Less than one year	$ 598,723
Greater than one year	2,434,257
Total undiscounted lease obligation	$ 3,032,980

1. Lease obligations

At the commencement date of the leases, the lease liability was measured at the present value of the lease payments that were not paid at that date. The lease payments are discounted using an interest rate of 6.5% (2025 - 6.5%) which was the incremental borrowing rate when the lease liability was incurred. The lease liabilities are operating-type leases for office equipment and its premises. The continuity of the lease liabilities is presented in the table below:

Balance, January 1, 2025	$ 539,694
Additions	2,549,480
Interest expense	19,865
Lease payments	(501,868)
Balance, December 31, 2025	2,607,171
Lease termination	(34,640)
Interest expense	24,336
Lease payments	(143,612)
Balance, March 31, 2026	$ 2,453,255
As at March 31, 2026
Less than one year	$ 461,599
Greater than one year	1,991,656
Total lease obligation	$ 2,453,255

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

9. Investment in associate

Galaxy Power

In July 2021, the Company acquired 20% of the shares of Galaxy Power Inc. ("Galaxy Power"), a private Canadian corporation for $250,000, as the investment represents a 20% holding in issued and outstanding common shares of Galaxy. Two directors of the Company are also directors in Galaxy Power, however the Company has accounted for the investment in accordance with IFRS 9 as the Company does not have significant influence over the investment. During the year ended December 31, 2021, a full loss was recognized on the investment. There was no impact to the unaudited condensed consolidated interim statements of loss and comprehensive loss during the three months ended March 31, 2026 and 2025.

KarbonKleen Inc

During the year ended December 31, 2020, the Company purchased 2,000 shares in KarbonKleen Inc ("KK"), a private Delaware corporation, for $516,479 (US$367,000) in cash payments, and advanced $1,020,293 (US$725,000) to KK as a note receivable bearing interest at 10% per annum due on December 31, 2021. The investment represents a 20% holding in the issued and outstanding common shares of KK, and, as a result, the Company has accounted for the investment under the equity method. During the year ended December 31, 2021, a full loss was recognized on the investment and loan. There was no impact to the unaudited condensed consolidated interim statements of loss and comprehensive loss during the three months ended March 31, 2026 and 2025.

10. Cipher Neutron

Joint Operation as defined by IFRS 11

In February 2023, the Company entered into a Collaboration Agreement with Cipher Neutron Inc. ("CN"), a privately held Ontario based company, to further jointly develop, produce and market state-of-the-art Hydrogen technology, including AEM Electrolyser technology, that is designed to produce Green Hydrogen for world-wide large infrastructure projects. The Collaboration Agreement takes the form of a joint operation as defined by IFRS 11, and each Company is responsible for its own liabilities incurred to develop the technologies outlined above.

Previously under the Collaboration Agreement, the Company had been provided with options to acquire common shares of CN (the "CN options") at various expiry dates up to July 31, 2025, which, if fully exercised, could have resulted in the Company obtaining up to a 50% ownership of CN (as at the date of the Collaboration Agreement). The total exercise price of such CN options was $17,500,000. The Company did not exercise any of the CN options and they have since expired at July 31, 2025.

Investment in associate

On June 6, 2024, the Collaboration Agreement was terminated, and the Company received 7,178,000 Units of Cipher Neutron. Each Unit consisted of 1 Common Class A share and one-half Class A Share purchase warrant exercisable at $1.50 per full warrant until 3 years after the closing. The transaction resulted in the Company acquiring 15% of the outstanding Common Class A shares on an undiluted basis, and 20% of the outstanding Common Class A shares on a diluted basis as at June 6, 2024. As a result of the above, the Company has accounted for the investment under the equity method, recognizing a $20,000 value to the shares upon acquisition. As at March 31, 2026 and December 31, 2025, financial information was not available.

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

11. Loans

Loan from a shareholder

On March 22, 2023, the Company received short-term loan of $150,000 from a shareholder of the Company. The loan bears interest at 1% per month and was due on April 30, 2023. As part of the loan agreement, the Company agreed to issue 1,500,000 stock options with an exercise price of $0.175 and a fair value of $64,435. As at March 31, 2026, the balance outstanding including interest was $195,801 (December 31, 2025 - $191,363).

Loan from a related party

As at December 31, 2023, the Chairman and director of the Company provided cash advances to the Company. The cash advances bears interest at 12% per annum, and are payable upon demand. During the three months ended March 31, 2026, the Company recorded accrued interest expense of $1,913 (March 31, 2025 - $3,203) on the loan. During the year ended December 31, 2025, the Company repaid $100,000 of the loan. As at March 31, 2026, the balance outstanding including interest was $141,639 (December 31, 2025 - $139,726).

Loans from an investor

On January 13, 2025, the Company entered into an arm's length loan to borrow $750,000 for a term of one year at an interest rate of 10% per annum due at maturity. On February 14, 2025, the maturity date of this loan was extended to March 1, 2026. On February 5, 2026, the maturity date of a $750,000 loan from an Investor was extended to March 1, 2027. All other terms of the loan remain unchanged.

In March 2026, the Company entered into a loan agreement with an Investor. Under the terms of the loan agreement the Company can borrow up to $2,000,000. During the three months ended March 31, 2026, the Company borrowed $500,000. The loan bears interest at 6% per annum and is due at the earlier of (i) the Company receiving proceeds of at least $5,000,000 in equity funding from any source including the exercise of any options or warrants and (ii) February 26, 2027.

During the three months ended March 31, 2026, the Company recorded accrued interest expense of $19,479 on the loan. As at March 31, 2026, the balance outstanding including interest was $1,341,808.

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

12. Convertible notes

On October 9, 2024, the Company issued a $1,000,000 convertible note to a third party arm's length company, and 4,166,667 common share purchase warrants. The note bears interest at 8% per annum with a maturity date October 9, 2025. The principal amount is convertible, at the option of the holder, in whole or in part, at any time following the issue date but on or before maturity, into common shares of the Company at $0.24 per common share. Each share purchase warrant entitles the holder to purchase one additional common share at a price of $0.28 per share until October 9, 2026. The fair value of the equity portion of the convertible note was determined to be $98,683 using a relative net present value calculation assuming a discount rate of 20.05% per annum.

The fair value of the warrants issued with the convertible note was determined to be $452,729 using the relative fair value Black-Scholes option pricing model with the following assumptions: risk free interest rate – 3.27%; expected life in years – 2; expected volatility 84.08%; and expected forfeiture rate – 0%.

On February 14, 2025, the maturity date of the $1,000,000 convertible note issued on October 9, 2024, was extended to March 1, 2026. Upon modification the Company recorded a loss on modification of debt of $279,477.

On October 16, 2025, the Company's amended to its $1,000,000 convertible note whereby the conversion price was changed from $0.24 to $0.15 per common share and the maturity date was extended from March 1, 2026 to October 9, 2026. All other terms of the convertible note remained the same. Upon modification the Company recorded a loss on extinguishment of debt of $47,421. The fair value of the equity portion of the convertible note was determined to be $170,993 using a relative net present value calculation assuming a discount rate of 20.05% per annum.

During the three months ended March 31, 2026, the Company accrued interest of $19,726, and recorded accretion of $41,068 on this convertible note.

On December 9, 2025, the Company issued a $2,000,000 convertible note to a third party arm's length company, and 6,666,667 common share purchase warrants. The note bears interest at 5% per annum with a maturity date of December 9, 2027. The principal amount is convertible at the option of the holder, in whole or in part, at any time following the issue date but on or before maturity, into common shares of the Company at $0.15 per common share. Each share purchase warrant entitles the holder to purchase one additional common share at a price of $0.20 per share until December 9, 2027. The fair value of the equity portion of the convertible note was determined to be $614,325 using a relative net present value calculation assuming a discount rate of 18.90% per annum.

The fair value of the warrants issued with the convertible note was determined to be $127,785 using the fair value Black-Scholes option pricing model with the following assumptions: risk free interest rate - 2.64%; expected life in years - 2; expected volatility - 76.92%; and expected forfeiture rate - 0%.

During the three months ended March 31, 2026, the Company accrued interest of $21,945, and recorded accretion of $77,481 on this convertible note.

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

13. Share capital

a) Authorized share capital

The authorized share capital consisted of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.

b) Common shares issued

(i) During the three months ended March 31, 2025, the Company issued 33,333,333 units at a price of $0.15 per unit, with each unit consisting of one common share and one common share purchase warrant for gross proceeds of $5,000,000. Each whole warrant entitles the holder thereof to purchase one share at an exercise price of $0.20 per share on or before February 21, 2028.

	Number of common shares	Amount
Balance, December 31, 2024	441,537,516	$100,314,944
Units issued on private placement	33,333,333	5,000,000
Balance, March 31, 2025	474,870,849	$ 105,314,944
Balance, December 31, 2025 and March 31, 2026	508,286,682	$ 110,262,994

14. Stock options

(i) During the three months ended March 31, 2025, the Company granted 500,000 stock options to an employee. The stock options have an exercise price of $0.25, vest immediately, and expire on January 15, 2030. The stock options were valued using a relative fair value basis, where the relative fair value of the loan payable and stock options were estimated by using the share price at the time of financing and the Black-Scholes option pricing model with the following assumptions: risk free interest rate – 3.14%; expected life in years – 5; expected volatility 98.50%; and expected forfeiture rate – 0%.

(ii) During the three months ended March 31, 2026, the Company granted 750,000 stock options to consultants. The stock options have an exercise price of $0.15, vest immediately, and expire on March 5, 2031. The stock options were valued using a relative fair value basis, where the relative fair value of the loan payable and stock options were estimated by using the share price at the time of financing and the Black-Scholes option pricing model with the following assumptions: risk free interest rate – 2.89%; expected life in years – 5; expected volatility 84.27%; and expected forfeiture rate – 0%.

(iii) During the three months ended March 31, 2026, 850,000 stock options with a Black-Scholes value of $351,295 expired with exercise price of $0.55.

	Number of stock options	Weighted average exercise price
Balance, December 31, 2024	36,700,250	$ 0.34
Issued (i)	500,000	0.25
Balance, March 31, 2025	37,200,250	$ 0.34

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

1. Stock options (continued)

	Number of stock options	Weighted average exercise price
Balance, December 31, 2025	40,312,750	$ 0.27
Issued (ii)	750,000	0.15
Expired (iii)	(850,000)	(0.55)
Balance, March 31, 2026	40,212,750	$ 0.26

The following table reflects the stock options issued and outstanding as of March 31, 2026:

Expiry Date	Exercise Price ($)	Weighted Average Remaining Contractual Life (years)	Number of Options Outstanding
May 30, 2026	0.50	0.16	5,940,000
August 25, 2027	0.30	1.40	6,070,000
October 23, 2027	0.30	1.56	100,000
February 7, 2028	0.175	1.86	6,000,000
March 28, 2028	0.175	1.99	1,500,000
July 12, 2029	0.20	3.28	9,130,250
November 1, 2029	0.25	3.59	1,500,000
November 20, 2029	0.25	3.64	250,000
December 10, 2029	0.25	3.70	250,000
January 15, 2030	0.25	3.80	500,000
November 18, 2030	0.20	4.64	8,222,500
March 5, 2031	0.15	4.93	750,000
Total	0.26	1.42	40,212,750

1. Warrants

	Number of warrants	Weighted average exercise price
Balance, December 31, 2024	27,878,134	$ 0.21
Issued (note 13)	33,333,333	0.15
Balance, March 31, 2025	61,211,467	$ 0.18
Balance, December 31, 2025	101,105,817	$ 0.21
Expired	(691,650)	0.30
Balance, March 31, 2026	100,414,167	$ 0.20

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

15. Warrants (continued)

The following table reflects the share purchase warrants issued and outstanding as of March 31, 2026:

Expiry date	Remaining contractual life (years)	Number of warrants outstanding	Exercise price ($)
June 27, 2026	0.24	21,667	0.18
December 4, 2026 (1)	0.68	4,669,277	0.20
December 20, 2026 (1)	0.72	3,156,499	0.20
February 22, 2027 (1)	0.90	5,149,223	0.20
October 9, 2027 (2)	1.53	4,166,667	0.20
June 27, 2027 (1)	1.24	6,301,167	0.20
July 3, 2027 (1)	1.26	3,616,334	0.20
December 9, 2027	1.69	6,666,667	0.20
February 21, 2028	1.90	33,333,333	0.20
July 2, 2028	2.26	33,333,333	0.20
		100,414,167

(1) If at any time after the date that is four months and one day after the date hereof, the closing trading price of the Common Shares on the TSX is greater than $0.35 per Common Share for a period of ten consecutive Business Days, then the Company may, at its discretion give notice of the acceleration of some or all of the Warrants to the Holder and, in such case, the Expiry Time shall be 5:00 p.m. (Toronto time) on the 30th day after the date on which such notice is deemed to have been given by the Company to the Holder.

(2) These warrants were amended from whereby the exercise price of $0.28 and an expiry date of October 9, 2026 were modified to $0.20 and an expiry date of October 9, 2027, the expense related to modification of the warrant is $143,135.

16. Loss per share

For the period ended March 31, 2026, basic and diluted loss per share has been calculated based on the loss attributable to common shareholders of $1,827,810 (March 31, 2025 - $2,495,624) and the weighted average number of common shares outstanding of 508,286,682 (March 31, 2025 - 455,981,960). Diluted loss per share did not include the effect of stock options and warrants as they are anti-dilutive.

17. Related party transactions

Key management includes directors and other key employees, who have authority and responsibility for planning, directing, and controlling the activities of the Company.

The Company paid or accrued the following amounts to directors, companies controlled by directors, or companies having common directors during the three months ended March 31, 2026 and March 31, 2025:

	Three Months Ended March 31,
	2026	2025
Consulting fees paid to directors	$ 207,403	$ 241,125
Short-term benefits	66,000	66,000
	$ 273,403	$ 307,125

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

17. Related party transactions (continued)

Included in consulting fees to directors above for the three months ended March 31, 2026, are $nil (March 31, 2025 - $36,697) for business development services, $66,000 (March 31, 2025 - $60,775) for advisory services. As at March 31, 2026, officers and directors were owed $467,250 (December 31, 2025 - $420,600) with respect to services provided. Included in accounts payable and accrued liabilities as at March 31, 2026, is $182,325 (December 31, 2025 - $278,100) owing to a former officer.

See notes 10, 11, and 13(b).

18. Segmented information

The Company currently has one business segment, being the development, production and sale of hydrogen generating systems. As at, and for the three months ended, March 31, 2026, the Company's German subsidiary held cash of $109,349 (December 31, 2025 - $nil), and incurred expenses of $216,113 (March 31, 2025 - $138,634) in Germany. The Company's subsidiary, DISH, holds the shares in the Company's investment in KK (note 9).

Revenue by geographical location:

	Three Months Ended March 31, 2026	Three Months Ended March 31, 2025
Europe	$ 37,981	$ 4,714
Canada and other	-	294,866
	$ 37,981	$ 299,580

19. Warranty Provision

The Company provides a limited conditional warranty of its new HydraGEN™ products pursuant to sales by an authorized dealer to the first end user. Generally, such warranty disclaims any liability for direct and indirect losses including but not limited to loss of revenue or profit, loss of use, lost goodwill, damage and increased expenses or costs that may result from defects in material or faulty workmanship or otherwise. In certain limited circumstances, where certain claims from third parties would not be covered under the warranty, the Company may, in such certain limited conditions, seek to maintain goodwill by replacing or repairing its HydraGEN™ products at its own costs. The Company is currently investigating certain third party claims but has not determined whether such claims are based on results of the Company's products and the timing and amounts of such claims cannot be currently determined.

As at March 31, 2026, included within current liabilities on the Company's consolidated statement of financial position is a warranty provision of $915,859 (December 31, 2025 - $914,151), which represents an estimate of expected warranty claims in the future.

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

20. Commitments and Contingencies

The Company received a purchase order of 3,000 HydraGEN™ Units (“Units”) brokered through a director of the Company where he acted as a conduit for the purchase of the Units on behalf of dynaCERT for the purchaser. The recipient of these Units was a company located in Guyana (the “Recipient”). The Company previously delayed deliveries of Units under this order pending further notice by either the Recipient or its representatives, that certain outstanding issues were resolved to everyone’s satisfaction. Most notably, the Company was obliged to delay the delivery of all but two such Units and the Company was awaiting from the Recipient, through representatives, certain usual information regarding the specifications of these Units, and other data pertaining to the vehicles and equipment on which the Units are to be installed.

Despite continued ongoing dialogue with representatives of the Recipient of these Units over past months, none of the aforementioned issues have been resolved to date. Further, the Company has been made aware of litigation among various parties, including the Company and a director of the Company, claiming damages in the amount of $3,815,297 that appears to involve the purchase order in question. The Company has also received a third-party claim in connection with litigation requesting the return of the initial deposit of $350,000 that the Company received in May 2023 and included in customer deposits. Management has evaluated both of these claims as without merit against the Company. Neither the possible outcome nor the amount of possible settlement can be foreseen. Therefore, no provision has been recognized in the consolidated financial statements.

The Company has also received a statement of claim from a former consultant of the Company and an associated corporate entity alleging wrongful (constructive) dismissal and breach of contract in addition to damages and other incidental relief including benefits, unpaid vacation pay and rights to his unexercised options. The Company settled the claim for the alleging wrongful dismissal and breach of contract in the amount of $239,500 from a former consultant of the Company and an associated corporate entity during the year ended December 31, 2025.

A professional corporation issued a statement of claim on March 14, 2025, claiming damages of $84,750 for breach of contract plus interest and costs. The claimant alleges that it is owed $84,750 for fees and expenses invoiced on September 17, 2024, in relation to advisory services. The Company has settled this claim during the year ended December 31, 2025, without admission of liability.

Two claims for sums owed were filed by third parties for a combined $103,106. The Company has settled both claims during the year ended December 31, 2025 for a combined $79,000, without admission of liability on both claims.

In 2024, a dynaCERT equipment dealer (“Dealer”), purchased dynaCERT technology products for resale and then resold the products to a separate company controlled by certain senior officers of the Dealer (“Dealer Affiliate”). The Dealer Affiliate in turn leased the products to a third-party customer (“Customer”). The Dealer Affiliate was responsible for installing the products on vehicles designated by the Customer. The Customer has alleged that the installed products caused damage to two vehicles and because of this, discontinued using the products on the other designated vehicles. The Customer has alleged that the Dealer Affiliate and the manufacturer are liable for the issues arising from the failures of the products and claims indemnity against the Dealer Affiliate and the Company for all its losses, damages, costs, expenses and lost profits pursuant to the Lease Agreement between the Customer and the Dealer Affiliate (to which the Company is not a Party). As of December 2025, the Customer has alleged that its total losses, damages, costs, expenses and lost profits amounted to USD$1,075,629 (the “Claim”). However, the Customer did not apportion the Claim as between dynaCERT and the Dealer Affiliate. Management denies that any damage was caused by any design or manufacturing defect of the Company’s products.

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DynaCERT INC.
Notes to Condensed Consolidated Interim Financial Statements
Three Months Ended March 31, 2026
(Expressed in Canadian Dollars)
Unaudited

20. Commitments and Contingencies (continued)

As a result of the Customer's allegations, the Dealer has demanded that dynaCERT return the Dealer's deposit payment of USD$42,886 and reimburse the Dealer's shipping and installation costs of USD$176,043 within 30 days of the equipment being made available for return, failing which, it would commence proceedings to recover USD$218,929. To date, the products have not been made available for return in any event. In addition, the Dealer has failed to pay for the purchased products and still owes dynaCERT payment of approximately USD$367,445 against its purchase.

Management has evaluated the claims by the Customer and the Dealer as without merit against the Company. Neither the possible outcome nor the amount of possible settlement can be foreseen. Therefore, no provision has been recognized in the consolidated financial statements.

dynaCERT has also discovered that the two senior officers of the Dealer, that controlled the Dealer Affiliate had taken steps to set up a business competitive with dynaCERT and the Dealer. dynaCERT delivered a Notice of Dispute to the Dealer and its Dealer Affiliate pursuant to the Dealership Agreement seeking Arbitration to require the Dealer to enforce its confidentiality obligations against the senior officers and other relief. dynaCERT also commenced an action in Ontario Superior Court against the two senior officers of the Dealer and their company (Dealer Affiliate) for injunctive and other equitable relief for breach of confidence and unfair competition. Both the Arbitration and the Court Action have not proceeded beyond the pleading stage.

On January 16, 2026, a Customer, through Ontario counsel, wrote directly to dynaCERT's insurance broker, alleging that the Customer is an 'additional insured' and entitled to coverage in connection with the Claim as described above in Commitments and Contingencies, directly from dynaCERT's insurer. Management made inquiries of its insurance broker and concluded that Customer is not named as an additional insured under the policy and as such the Customer does not have the ability to make a direct claim against dynaCERT's insurer for indemnity.

21. Subsequent events

On April 1, 2026, the Company announced an award of 500,000 Restricted Share Units ("RSU's") under the Company's RSU Plan to Kevin Unrath, Chief Executive Officer ("CEO"). Coincident with the appointment of Kevin Unrath to CEO, the Company has approved an award of RSU's, with a vesting period of three years.

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