Nanalysis Scientific - Management Reports 2026

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Management’s Discussion & Analysis For the year ended December 31, 2025 Nanalysis Scientific Corp.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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Forward Looking Statements ....................................................................................................................................... 3 Overview ....................................................................................................................................................................... 5 Critical Accounting Policies and Estimates ................................................................................................................... 7 SCIENTIFIC EQUIPMENT SEGMENT ..................................................................................................................................... 9 Product Overview ......................................................................................................................................................... 9 Technology Portfolio ................................................................................................................................................... 10 Software Portfolio ...................................................................................................................................................... 12 Technology Under Development ................................................................................................................................ 12 Third Party Equipment Sales ....................................................................................................................................... 13 SECURITY SERVICES SEGMENT .......................................................................................................................................... 14 FINANCE AND OPERATIONS .............................................................................................................................................. 15 Overall Performance and Discussion of Operations ................................................................................................... 16 Investment in Capital Development Costs and Research and Development Expenditures ....................................... 24 Summary of Quarterly Results .................................................................................................................................... 24 Selected Annual Financial Information ........................................................................................................................ 25 LIQUIDITY & CAPITAL RESOURCES .................................................................................................................................... 26 Working Capital .................................................................................................................................................................. 25 Loans and Borrowings ................................................................................................................................................. 27 Lease Liabilities ........................................................................................................................................................... 29 Financial Management ................................................................................................................................................ 29 SHARE CAPITAL ................................................................................................................................................................... 31 REVENUE AND SEGMENT INFORMATION ........................................................................................................................ 35 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT ..................................................................................................... 36 RECENT ACCOUNTING PRONOUNCEMENTS ................................................................................................................... 40 OFF BALANCE SHEET ARRANGEMENTS ........................................................................................................................... 40 RELATED PARTY DISCLOSURE ............................................................................................................................................ 41

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025 AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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READER AND FORWARD-LOOKING STATEMENT ADVISORY

The Management’s Discussion and Analysis (“MD&A”) for the three and twelve-month periods ended December 31, 2025, of the financial condition and results of operations of Nanalysis Scientific Corp. (the “Company” or “Nanalysis”), is prepared as at April 7, 2026. This discussion should be read in conjunction with the Company’s audited consolidated financial statements (hereafter referred to as the “financial statements” or “consolidated financial statements”) for the year ended December 31, 2025, and notes thereto. Other information on Nanalysis, including the Company’s Annual Information Form, is available on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.nanalysis.com.

This MD&A and the consolidated financial statements were reviewed by the Audit Committee of the Company’s Board of Directors and approved by Nanalysis’ Board of Directors on April 7, 2026. All dollar figures are in thousands of Canadian dollars, except per share amounts or unless otherwise stated.

This discussion should not be considered all-inclusive as it does not include all changes regarding general economic, political, governmental and environmental events. Certain comparative figures in this MD&A have been reclassified to conform with the presentation adopted in the current period.

Forward Looking Statements

This MD&A contains certain forward-looking statements and forward-looking information (collectively referred to herein as “forwardlooking statements”) within the meaning of applicable Canadian securities laws. All statements included herein that address activities, events, or developments that the Company expects or anticipates will or may occur in the future are forward-looking statements. Forward-looking information is often, but not always, identified by the use of words such as “could”, “should”, “can”, “anticipate”, “expect”, “believe”, “will”, “may”, “projected”, “sustain”, “continues”, “strategy”, “potential”, “projects”, “grow”, “take advantage”, “estimate”, “well positioned” or similar words or phrases suggesting future outcomes. In particular, this MD&A may contain forwardlooking statements relating to: the continued stability in the Scientific Equipment segment through 2026; the replacement of units; the expectations regarding the Security Services segment; revenue increases from the Security Services Maintenance Business; the issuance of new securities by the Company; expectations regarding cost reduction or efficiency improvement plans; future revenue, operations, opportunities, business strategies, development and production plans, and competitive advantages.

The forward-looking statements regarding the Company are based on certain key expectations and assumptions of the Company concerning anticipated financial performance, tariffs and international trade relations, business prospects, strategies, regulatory developments, exchange rates, tax laws, the sufficiency of budgeted capital expenditures in carrying out planned activities, the availability and cost of labour and services and the ability to obtain financing on acceptable terms and future costs and expenses being based on historical costs and expenses, adjusted for inflation, all of which are subject to change based on market conditions and potential timing delays. Although management of the Company considers these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect. Additionally, in the normal course of operations, the Company may become involved in, named as a party to, or be the subject of, various legal proceedings. The outcome of outstanding, pending, or future proceedings cannot be predicted with certainty. For claims in which outcomes are not determinable, no provision for settlement has been made in the consolidated financial statements.

By their very nature, forward-looking statements involve inherent risks, uncertainties (both general and specific) and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. A number of important factors could cause the actual events or results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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expressed in the forward-looking statements, including, among other things: general economic and market factors, including business competition; changes in government regulations or in tax laws; component prices; technology development or operational activities; inability to scale manufacturing; changes in market demand; changes in international trade regulations, affecting the Company; timing and availability of external financing on acceptable terms; the ability of the Company to maintain its debt covenants and servicing requirements, and lack of qualified, skilled labour or loss of key individuals; as well as those factors detailed from time to time in the Company's interim and annual financial statements, the management's discussion and analysis of those statements, and in the Company’s annual information form filed with regulators in Canada at www.sedarplus.ca. Readers are cautioned that the foregoing list is not exhaustive.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those contained in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking statements or information.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forwardlooking statements included in this MD&A are made as of the date of this MD&A, and the Company does not undertake and is not obligated to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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Business overview

Overview

The Company is the ultimate parent in the group. In June 2019, the Company completed a reverse takeover (“RTO”) and obtained a listing on the TSX-V under the symbol “NSCI”. The Company’s executive leadership is responsible for strategic decision making, resource allocation, and assessing financial performance and, as a group, is identified as our chief operating decision maker for the purposes of reporting segment information under International Financial Reporting Standards ("IFRS").

The Company carries out its business within two reportable business segments: Scientific Equipment and Security Services.

Scientific Equipment Segment

Nanalysis is a provider of cutting-edge, patent-protected magnetic resonance (“MR”) technology to facilitate simple and rapid unknown chemical identification, quantification and diagnostics in a number of end markets including pharmaceutical, biotechnology, chemical, security, food, oil & gas and educational industries. Customers include Eli Lilly, Johnson & Johnson, Takeda Pharmaceutical, BASF, Hitachi Chemical, US Department of Agriculture, Lubrizol, Aramco Services, SABIC, Oxford University, Harvard University and many other Fortune 500 organizations.

The scientific equipment segment is primarily engaged in the development and distribution of MR technology into industrial, research and teaching markets through the sale of accessible, affordable, and automatable MR systems. By focusing on innovation in both method development and magnet and electronic design, the Company’s product line addresses unmet needs of customers in a variety of applications, including pharmaceutical, academia, mining, oil and gas, and the cannabis industry, among others. Founded in 2009 with the specific intent of developing the world’s first portable MR spectrometer, Nanalysis aimed to address the three main limitations of this powerful MR technique – affordability, accessibility and automatability. After approximately four years of development, Nanalysis began shipping its first commercial product in 2012. Since then, Nanalysis has expanded the platform's functionality, including launching its 100MHz instrument, which has the highest usable field on a fully featured benchtop NMR on the market, to address industrial market demands for increased performance metrics. In 2024, the Company continued to develop its 60Mhz and 100Mhz platforms to further improve manufacturability and continue to enhance end user experience. In early 2025, this resulted in the launch of its new 60MHz instrument, which is based on the successful 100MHz product line.

In March 2020, the Company acquired all outstanding shares of RS2D S.A.S., a complementary technology company based in Strasbourg, France, that specializes in the development of cutting-edge MR electronics. Based on a single electronic board, RS2D has

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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developed MR product lines in high field (“HF”), Nuclear Magnetic Resonance (“NMR”), and Magnetic Resonance Imaging (“MRI”) that can further advance Nanalysis’ existing product lines in the Scientific Equipment segment, while rounding out the Company’s MR technology portfolio.

In July 2021, the Company acquired One Moon Scientific (“OMS”), a software company based in New York, USA, specializing in a suite of software tools to streamline and automate MR data analysis and management.

In January 2022, the Company acquired K’(Prime) Technologies Inc. (“K’Prime”). Founded in 1997, K’Prime is a North American sales and service company, with a particular focus on scientific instrumentation for pharma, food, chemical and oil & gas customers, as well as imaging systems for security applications. Within the Scientific Equipment segment, the Company has provided manufacturer representative services as an outsourced sales force for original equipment manufacturers of chemical analysis laboratory instrumentation and provides ad hoc maintenance and other services on the same equipment. The Company has phased out this service line as of December 31, 2025.

Nanalysis continued to expand its presence in the NMR market with its 39% (December 31, 2024 - 43%) strategic investment in QUAD Systems AG (“Quad”) in 2022, a company based in Zurich, Switzerland that offers traditional MR technology with innovative solutions to address long standing limitations of MR technology, including accelerated data acquisition and improved sensitivity in biological samples. In April 2023, Quad launched its full high-field NMR system with a minimum resolution of 400MHz. Nanalysis supports Quad with the development and manufacturing of an NMR console capable of resolutions from 300MHz to 800MHz.

In the year ended December 31, 2024, the Company identified impairment indicators related to its investment in Quad, and a loan advanced to Quad in 2023. As at December 31, 2024, the Company completed an impairment analysis on Quad using the discounted cash flow method and expected credit losses method for the investment and loan, resulting in full impairment of both balances. No further impairment or recovery was recorded in 2025.

The Company maintains a focused, direct sales force in the United States, Germany, France, and Canada, and works through distributors and dealers in other geographic areas to ensure market penetration.

Security Services Segment

The Company’s Security Services segment provides preventative and on-call maintenance services for technological detection equipment in a variety of security verticals, as well as general sales and maintenance of commercial security equipment. Since the Company’s acquisition of K’Prime in January 2022, the Company has been providing services for original equipment manufacturers and individual customers in service lines such as airport security equipment maintenance, secure facility detection equipment maintenance, and installation of such equipment. In May 2022, the Company was awarded a six-year, $160 million contract to provide airport security equipment maintenance services across Canada. This contract allowed the Company to materially expand its security services business by providing preventative maintenance, on-call maintenance, and ad-hoc services in Canadian airports through the second quarter of 2028, with two five-year renewal periods at the customer’s option. Upon adding the new service (the “Airport Security Maintenance Business”), the Company rapidly expanded this segment. The Company began ramping up the Airport Security Maintenance Business in 2022 and completed its rollout of all essential services in all required locations in January 2024.

Currently, the Company has over 130 employees in the Security Services segment and operates in all provinces and territories in Canada. The Company provides preventative maintenance, corrective maintenance, and additional project work related to the Airport Security Maintenance Business in up to 89 active airports and training locations in Canada. This entails having technicians stationed in 24 primary

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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locations while travelling for maintenance work in satellite locations tied to the primary location. Under the existing airport security maintenance contract in Canada, the Company must maintain strict response times in the event of equipment breakdown or malfunction and provide on-call services in its primary locations. Response times required vary from airport to airport. In addition, the Company provides inventory services to the customer by maintaining certain spare parts stock at various locations within Canada. This involves the Company monitoring inventory levels, ordering, and distributing inventory within Canada on behalf of the customer. With the project roll-out complete, the Company continues to enhance efficiency in this business and complete additional project work for the customer. Currently, this constitutes the majority of the Company’s Security Services segment.

In addition, the Company provides installation and maintenance for a wide spectrum of security equipment, including security cameras, access controls, and screening systems, including millimeter wave and X-Ray technology, to a variety of customers. The Company is continuing to pursue growth initiatives in its services business.

The Company expects to expand the Security Services segment by adding new customers and entering into new service agreements in the future.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements and this MD&A requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The impacts of such estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Notes 2 and 3 of the Company’s audited consolidated financial statements as at and for the year ended December 31, 2025, contain a description of the accounting policies, judgements, estimates and assumptions that are considered significant.

Non-IFRS and Supplementary Financial Measures

The Company prepares and reports its financial statements in accordance with IFRS as issued by the International Accounting Standards Board, as adopted by the Canadian Accounting Standards Board. However, this MD&A may make references to certain non-IFRS measures, including key performance indicators used by management. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS.

The Company uses non-IFRS measures, including, Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (“Adjusted EBITDA”) and Loans and leases, which may be calculated differently by other companies. These non-IFRS measures and metrics are used to provide investors with supplemental measures of the Company’s operating performance and liquidity and thus highlight trends in the Company’s business that may not otherwise be apparent when relying solely on IFRS measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of companies in similar industries. Management also uses non-IFRS measures and metrics to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of executive compensation.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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Adjusted EBITDA

Adjusted EBITDA
	T hree mo nths ended D ecember 31
($000's)	2025 2024 ($ ) C hange
N et lo ss	(729) (7,452) 6,723
Depreciation and amortization expense	569 1,086 (517)
Finance expense Stock-based compensation Other (income) expenses Amortization of deferred wages Loss from associate Impairment of assets	433 293 140 90 199 (109) 624 124 500 216 215 1 - 345 (345) - 7,052 (7,052)
Current income tax expense (recovery) Deferred income tax (recovery) expense	(12) 33 (45) (4) (60) 56
A djusted EB IT D A	1,187 1,835 (648)
	T welve mo nths ended D ecember 31
($000's)	2025 2024 ($ ) C hange
N et lo ss	(5,658) (13,613) 7,955
Depreciation and amortization expense	3,427 4,356 (929)
Finance expense Stock-based compensation Other (income) expenses	1,367 1,345 22 403 1,028 (625) 506 434 72
Amortization of deferred wages	839 895 (56)
Loss from associate	- 1,085 (1,085)
Impairment of assets Current income tax expense Deferred income tax recovery	- 7,326 (7,326) 54 45 9 (35) (67) 32
A djusted EB IT D A	903 2,834 (1,931)

Loans and Leases

000's)	D ecember 31, 2025	D ecember 31, 2024
Total loans and borrowings net of finance fees	15,990	16,157
Lease liabilities	1,588	2,204
Lo ans and Leases	17,578	18,361

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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Supplementary Financial Measures

The Company may also use supplementary financial measures, which are intended to be disclosed on a periodic basis to depict the historical or expected future financial performance, cash position, or cash flow of the Company, and are not a non-IFRS measures not presented in the financial statements. The measures discussed in the MD&A include:

Working capital , which is defined as current assets less current liabilities;
Gross margin , which is defined as either Product sales less Cost of product sold, or, Security Services revenue less Security Services cost; and,
Gross margin percentage , which is defined as either (Product sales less Cost of product sold) divided by Product sales or (Security Services revenue less Security Services costs) divided by Security Services revenue.

SCIENTIFIC EQUIPMENT SEGMENT

Product Overview

Magnetic Resonance Test, Measurement and Diagnostic Systems

The Company’s line of MR imaging and spectroscopy systems are designed to offer accessible and affordable options to proliferate the use of this powerful technique in underserved markets (e.g., academia, small and medium sized enterprise based chemical production, etc.), industrial quality assurance and control assays (e.g., pharma/biotechnology, materials/polymers, cannabis, food, etc.), process control (e.g., crude refining, chemical production), and, in the long-term vision of the Company, point-of-need diagnostics (e.g., doctor’s offices etc.).

By powering most MR products on one electronic platform, the Cameleon 4 or Cam4[TM] , and building tailored software layers from the ground up, Nanalysis can optimize data acquisition, processing, analysis, and integrity. Additionally, it provides flexibility to add automated software layers to ensure that these products can be operated by non-experts without compromising repeatability or reliability of the results.

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Bridging the Gap in MR Accessibility

MRI and NMR spectroscopy have long been workhorses of medical diagnostics and chemical analysis. Given the capital and operating expenditures of these instruments, however, they are often limited by accessibility and other, often lesser techniques, are used to supplement these applications. To address this issue, in 2009, the Company’s first focus was on developing powerful, extremely uniform, permanent magnet-based systems that were more affordable and required little to no maintenance.

Launching its first platform, the 60 MHz, in 2012, the flagship 100MHz in 2019, and its advanced 60MHz platform in 2025, Nanalysis continues to expand its MR portfolio to offer high-field NMR electronics and accessories, as well as MRI for pre-clinical applications.

NANALYSIS SCIENTIFIC CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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Technology Portfolio

		Underserved Traditional MR Markets	Underserved Traditional MR Markets
		Teaching	Research	Industrial QA/QC	Process	Diagnostics
	60 MHz	✔		✔	✔
Benchtop NMR	100 MHz	✔	✔
	Accessories – Flow		✔		✔
	Accessories - AUTOSampler		✔
				✔

HF-NMR	QUAD NMR Console	✔	✔	✔
MRI	Cam 4 Console	✔	✔			✔
	NMRGUi	✔	✔	✔
Software	SPINit	✔	✔			✔
	NMRFx	✔	✔	✔	✔	✔

Nanalysis 60-TEACH

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Nanalysis 60-NMR

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The first commercial product of Nanalysis, the original 60 MHz is the most compact model in its class. Shipping commercially since 2012, there are almost 1,000 instruments in the field in a variety of applications within industries and market segments including academia, industrial QA/QC assay and process chemistry innovators and early adopters.

Most popular in the academic teaching space, the latest subproduct of this original line, the 60TEACH, will give educators and researchers a high-quality product, unmatched in ease of use, at a competitive price point.

Launched in March 2025, the latest product from Nanalysis is the 60-NMR. Based on the successful 100-NMR platform, this next generation of the 60 MHz product offering provides superior NMR data in a standard 60 MHz field strength instrument. With a variety of optional software add-ons, this product advances Nanalysis’ offering by bringing many of the same advances found in the 100NMR Platform to a more compact, 60 MHz design.

To grow the market of the 60 MHz product line, Nanalysis is actively working with collaborators in method development to provide the necessary software layers to simplify and automate data analysis and maintain data integrity in several fields (e.g., cannabinoid detection, lithium quantification in brine).

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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Nanalysis 100-NMR

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The flagship Nanalysis 100 MHz platform provides the highest usable field strength in a fully featured Benchtop NMR unit available today. Developed to meet the requirements of customers needing higher sensitivity and resolution than the original 60 MHz platform could provide, it’s easyto-use ergonomic touchscreen and unparalleled data has been well received in the market since it began shipping in late 2020.

With the launch of the new 60-NMR Platform in Q1 2025, the 100-NMR and 60-NMR offer two highly capable options to Nanalysis customers on a unified software platform.

High-field NMR

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QUAD NMR Console

Aimed as an OEM console to support Quad’s High Field NMR systems, this compact high-field electronics platform can be incorporated on existing super conducting systems ranging from 300800 MHz.

The Company currently manufactures these High Field NMR consoles for QUAD, in which the Company holds a 39% direct investment.

MRI

Cameleon 4 Console

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The Cam 4[TM] console provides a compact and affordable MRI console alternative to facilitate the adoption of MRI in teaching and to springboard MRI innovations to provide safer, high-resolution instruments and develop necessary software for earlier identification with key OEM partners.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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Software Portfolio

NMRGui

The onboard Nanalysis user interface enables one-click data acquisition and processing for the Benchtop NMR product line. The interface was designed to simplify usage for non-experts while still providing more advanced users with the flexibility to modify acquisition parameters, or experiment sequences as required. This python-based software operates on a Linux operating system to allow users to write their own applications while also ensuring data integrity and automation.

SPINit

SPINit is an all-in-one MR software platform to facilitate data acquisition, processing and high-level pulse programming for the Company’s High-field NMR and MRI product lines. While competitive software packages require coding knowledge and expertise to develop experiments, the SPINit design philosophy is focused on transparency and usability to generate experiments directly from a graphical interface without requiring coding. There are several optional plug-ins to SPINit which allow for tailored workflow and automation to the user. These include SPINplanner (to control an autosampler) and Driver (to launch acquisition from any software).

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NMRFx

The newest component to Nanalysis’ MR offerings, the NMRFx Platform offers a suite of premium software tools to streamline and automate MR data analysis and management. Originally developed in a leading pharmaceutical company, this advanced software platform was designed to be a powerful platform to provide routine, high-performance data processing and fill niches in MR data analysis including machine learning and database construction and search algorithms.

By combining these premium data analysis tools with the NMRGui software interface, Nanalysis offers analysis and application software tools alongside its NMR equipment offerings.

Technology Under Development

MRI Technology Platform

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Nanalysis has worked on research projects with a variety of third parties to further develop its existing Cam4[TM] console for MRI applications. Projects included improving the safety, innovation, portability, and economics for neonatal, intraoperative, and mobile MRI. Nanalysis has also worked on projects that apply MRI to non-human applications, such as the study of plants and other living things. These projects entailed combining Nanalysis’ innovative core competencies associated with MRI electronics and software with that of our research partner’s expertise to develop next generation MRI technology. It is the Company’s current vision to one day develop an FDA approved, application

specific, prevention centric MRI machine for human use, in partnership with companies experienced in the FDA approval process and system wide product knowledge. While this vision is many years away from becoming a reality, the Company’s current commercial

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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technology in the area of NMR spectroscopy, combined with MRI research activity and commercial console technology, is taking us towards our vision, while continuing to establish a solid business foundation.

Robust Industrial Detector

The unique magnet designs at Nanalysis enable the development of an industrial-hardened spectrometer, capable of being incorporated directly into chemical production and refinery-type applications. With high-pressure and high-temperature sampling as well as explosion proof requirements, Nanalysis is working to use its existing Benchtop NMR platforms to develop an online sensor that can improve safety, limit by-product formation, and improve yields in a completely automated manner.

Automated Industrial Analyzer

Benchtop NMR also lends itself to use in streamlining industrial quality control and quality assurance assays to get accurate, reliable, and quantitative information quickly without substantial expense or requiring a high level of technical expertise. Leveraging these inherent advantages, Nanalysis is developing an illicit drug analyzer to facilitate the rapid and accurate identification of known clandestine drugs and provide law enforcement officers a tool to aid rapid identification of new psychoactive substances.

Full High-Field NMR Systems

To offer traditional NMR users improved performance and innovative MR components, as well as improved product scalability, Nanalysis acquired a 39% equity stake in Quad and their team of experienced MR specialists, who have made significant contributions to the manufacture, integration, and development of NMR methods and components. In addition to using Nanalysis Cam4[TM] based consoles, Quad provides the High-Field NMR market with full MR system upgrades and new Quad High Field NMR installations in the academic, pharmaceutical, and chemical industry market. In 2025 Quad completed development on two new types of probe technology and is experiencing solid demand in the market.

Third Party Equipment Sales

The Company previously operated a direct sales force in Canada that provided manufacturer representative sales services to a major chemistry equipment manufacturer in select sales territories across North America. As at December 31, 2025, the Company ceased providing manufacturer representative services. The Company will, however, continue to partner with third-party imaging equipment manufacturers as part of its Security Services business.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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SECURITY SERVICES SEGMENT

The Company offers a variety of security service solutions, with a particular specialization in the maintenance of large-scale and highly complex security systems, such as those used in airport security. In May 2022, the Company was awarded a six-year, $160 million contract to service and maintain airport security equipment at Canadian airports. This significantly expanded its presence in the airport security market. The Company started rolling out the contract in the second quarter of 2022 and began providing services under it in the fourth quarter of that year. Throughout 2023, the Company continued to hire and train more than 130 employees, expanding its services. By January 2024, the Company had completed its initial rollout of the project and was delivering all essential

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services under the contract at each required airport across Canada. During 2025, the Company completed several continuous improvement projects to benefit its security equipment maintenance operations. Contracts like this are often renewed for at least one additional five-year term, creating the potential for a long-term recurring business opportunity in the Airport Security Maintenance Business.

The Security Services group offers a range of services across thirteen technical platforms, including scheduled preventive maintenance, corrective maintenance, installation and upgrade projects related to detection and security equipment, and other technical maintenance services as requested by clients for various air passenger screening devices.

In July 2025, the Company partnered with Liberty Defense Holdings Ltd. to sell its HEXWAVE[TM] walkthrough screening equipment to both the Canadian aviation and urban security markets. The HEXWAVE TM screens for concealed metallic and non-metallic weapons and other threats using millimeter wave, advanced 3D imaging, and artificial intelligence for enhanced security. The system is considered an excellent complement to the Company’s existing imaging services programs, incorporating cutting-edge screening technology for use in laboratories, airports, sporting venues, casinos, ports, schools and municipal buildings. It is also the Canadian distributor for LINEV Systems with a proven line of X-ray imaging, body scanners, and security technologies. In February 2026, the Company secured a new distributor agreement with CEIA USA to sell its complete line of world-leading security products and walk-through metal detectors, including its groundbreaking OPENGATE® product.

Building these new partnerships, coupled with our unique strategic advantage of a national network of well-trained technicians, enables us to drive sales of top-of-the-line security screening equipment while expanding the asset base we service.

Through recent organizational changes, the Security Services Segment has seen a strong turnaround in performance, along with new opportunities emerging. The Security Services Segment is poised for growth and is well-positioned to expand its customer base to include additional government (municipal, provincial, state, and federal) and non-government customers through the sale and maintenance of top-tier security screening systems.

Through its security services business, the Company also provides installation and maintenance services for commercial security equipment, including scanning devices, metal detectors, detection equipment, and other general security equipment, in Canada. Customers include companies across a variety of industries, including retail, property management, and agriculture.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

FINANCE AND OPERATIONS

FINANCE AND OPERATIONS
	T hree mo nths ended D ecember 31 T welve mo nths ended D ecember 31
($000's)	2025 2024 C hange 2025 2024 C hange
Product sales Service revenue	4,133 5,536 (1,403) 13,441 19,396 (5,955) 6,543 6,753 (210) 26,690 26,099 591
Total sales and revenue Cost of product sold Cost of services	10,676 12,289 (1,613) 40,131 45,495 (5,364) 1,832 2,222 (390) 5,743 9,188 (3,445) 5,950 5,882 68 24,424 23,561 863
Total cost of sales	7,782 8,104 (322) 30,167 32,749 (2,582)
Gross profit Expenses Sales and marketing General and administration Research and development	2,894 4,185 (1,291) 9,964 12,746 (2,782) 950 1,279 (329) 4,046 4,747 (701) 968 1,182 (214) 5,663 5,519 144 62 104 (42) 430 544 (114)
(Loss) Income before other items Other Items Depreciation and amortization expense Finance expense Stock-based compensation Other expenses (income) Loss from associate Impairment of assets	914 1,620 (706) (175) 1,936 (2,111) 512 1,086 (574) 3,188 4,353 (1,165) 433 293 140 1,367 1,345 22 90 199 (109) 403 1,028 (625) 624 124 500 506 434 72 - 345 (345) - 1,085 (1,085) - 7,052(7,052) - 7,326(7,326)
Loss before tax	(745) (7,479) 6,734 (5,639) (13,635) 7,996
Current income tax expense (income) Deferred income tax (recovery) expense	(12) 33 (45) 54 45 9 (4) (60) 56 (35) (67) 32
N et lo ss	(729) (7,452) 6,723 (5,658) (13,613) 7,955
Other comprehensive income (loss)	143 212 (69) 80 192 (112)
T o tal co mprehensive lo ss	(586) (7,240) 6,654 (5,578) (13,421) 7,843
Share Information Loss per share (basic and diluted)	(0.01) (0.06) 0.05 (0.05) (0.12) 0.07
Share price (December 31, 2025)	0.17 0.32 (0.15) 0.17 0.32 (0.15)
Other Information
Capitalized property plant and equipment	105 - 105 672 144 528
Capitalized intangible assets	400 349 51 1,602 1,802 (200)
($ 000's)	D ecember 31, 2025 D ecember 31, 2024
Financial Position
Total assets Total loans, repayable contributions and leases Total liabilities Shareholders' equity	38,413 42,371 17,578 18,361 24,994 26,825 13,419 15,546

See Footnote 1

1 Total loans, repayable contributions and leases include current and long-term portions of lease liabilities, long-term debt and repayable contributions.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025 AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

Overall Performance and Discussion of Operations

Scientific Equipment Outlook and Gross Margin

Revenue and Outlook – Scientific Equipment

Scientific Equipment segment revenue is generated from sales of Benchtop NMR equipment, MRI equipment and contracted MRI installation services, licenses and software sales, consulting services related to NMR, High Field NMR consoles, and commission revenue from third-party equipment sales.

	T hree mo nths ended D ecember 31
($000's)	2025 2024 ($ ) C hange C hange
Product sales Cost of products sold	4,133 5,536 (1,403) -25% 1,832 2,222 (390) -18%
Gro ss margin	2,301 3,314 (1,013) -31%
Gro ss margin percentage	56% 60%
	T welve mo nths ended D ecember 31
($000's)	2025 2024 ($ ) C hange C hange
Product sales Cost of products sold	13,441 19,396 (5,955) -31% 5,743 9,188 (3,445) -37%
Gro ss margin	7,698 10,208 (2,510) -25%
Gro ss margin percentage	57% 53%

Product sales

For the three and twelve-month periods ended December 31, 2025, the Company reported consolidated product sales of $4,133 and $13,441, respectively. This is a 25% and 31% decrease over the prior year. During the 2025 year, economic uncertainty and tariff risks negatively impacted scientific equipment sales, as customers restricted capital budgets amid their own tariff risks. This has had a global impact on the business, reducing expected growth, particularly in the European market, and overall gross sales. As a result, Benchtop NMR revenue decreased by $635 and $1400 over the three and twelve-month periods ended December 31, 2024. MRI and medical imaging product sales for the three and twelve-month periods ended December 31, 2025, decreased by $296 and $3,390 respectively due to the loss of the Company’s third-party service and sale contracts in France. The Company has established a new contract with a US based MRI company under which it expects to generate revenue throughout 2026, though this will not be as large as previous MRI service and sales contracts. Third-party equipment sales revenue decreased by $472 and $1165 respectively compared to the three and twelve-month periods ended December 31, 2024, primarily due to no longer providing service contract sales in Canada as well as ending operations in its US territory, as the Company’s sole customer moves towards in-house sales operations. The Company wound down third-party equipment sales operations by the end of 2025.

During 2025, while the Company has continued to develop its sales funnel, the number of sales closed has decreased relative to its pipeline size. As a result, product sales revenue for the twelve months ended December 31, 2025, was lower compared to the prior year, despite relatively strong levels of identified sales opportunities. Management continues to monitor market conditions and slower closing of capital equipment sales closely. The Company is working to navigate market uncertainties and implement risk mitigation strategies, including improving distributor relationships in markets outside the United States, though slower activity remains a risk factor due to continued macroeconomic uncertainty.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

Cost of product sold

Cost of products sold for the Company includes the costs of manufacturing its products and costs of providing warranties and service for those products. Cost of sales for products is comprised of raw materials, direct costs, direct labour, an allocation of overhead, freight charges, warranty, depreciation, and, in certain cases, finished goods costs for third-party equipment sales. The Company completes all its manufacturing at its facility in Calgary, Alberta.

Cost of products sold for the three and twelve-month periods ended December 31, 2025, was $1,832 and $5,743, or 44% and 43% of revenue, compared to $2,222 and $9,188, or 40% and 47% of revenue, for the corresponding periods in the prior year.

During the third quarter of 2025 there was a significant reduction in sales and production levels, resulting in high levels of unutilized manufacturing labour, which drove down the gross margin percentage. Production delays were the result of supply chain difficulties acquiring magnets, a key component of the benchtop product. In the fourth quarter of 2025 this issue was resolved and the supply chain for this element was strengthened. Fourth quarter costs remained high as more expensive product development resources were needed to help clear the sales backlog. Looking forward, the Company will continue to actively manage its supply chain to ensure sufficient supply of long lead and key components is on hand.

Gross margin

For the three and twelve-month periods ended December 31, 2025, scientific equipment sales margins were $2,301 and $7,698 compared to $3,314 and $10,208 for the same prior year periods. Gross margin for the three months ended December 31, 2025 decreased to 56% compared to 60% in the same period of the prior year. Despite the lower quarterly margin percentage, gross margin percentage for the twelve months ended December 31, 2025 remained higher than the prior year. The year-over-year improvement was primarily driven by ongoing continuous improvement initiatives, which reduced the bill of materials on the Company’s Benchtop NMR products and contributed to overall margin expansion.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025 AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

Security Services Outlook and Gross Margin

Revenue and Outlook – Security Services

Upon completing the roll-out of its Airport Security Maintenance Business in early 2024, the Company became a leading provider of airport security equipment maintenance services in Canada through its Security Services segment. In addition to generating revenue from airport security and imaging equipment maintenance services, the Company also generates revenue from the purchase and resale of parts for its airport security customers in Canada, and from installing and servicing commercial and complex security equipment for a variety of industries. The Company is the Canadian distributor for both aviation and urban markets for Liberty Defense Holdings Ltd. and its AI-based HEXWAVE[TM] automated threat detection system. It is also the Canadian distributor for LINEV Systems with a proven line of x-ray imaging and security technologies.

	T hree mo nths ended D ecember 31
($000's)	2025 2024 ($ ) C hange C hange
Services revenue Services costs	5,563 5,602 (39) -1% 4,970 4,731 239 5%
Gro ss margin Gro ss margin percentage	593 871 (278) N/A 11% 16%
	T hree mo nths ended D ecember 31
($000's)	2025 2024 ($ ) C hange C hange
Flow-through inventory revenue Flow-through inventory costs	980 1,151 (171) -15% 980 1,151 (171) -15%
Gro ss margin	- - -
	T welve mo nths ended D ecember 31
($000's)	2025 2024 ($ ) C hange C hange
Services revenue Services costs	22,146 21,010 1,136 5% 19,880 18,472 1,408 8%
Gro ss margin Gro ss margin percentage	2,266 2,538 (272) N/A 10% 12%
	T welve mo nths ended D ecember 31
($000's)	2025 2024 ($ ) C hange C hange
Flow-through inventory revenue Flow-through inventory costs	4,544 5,089 (545) -11% 4,544 5,089 (545) -11%
Gro ss margin	- - -

Services Revenue

Services revenue includes amounts earned on an hourly basis for work performed to service, install and maintain security equipment, as well as costs reimbursed for travel and some training. It also includes amounts earned for spare parts inventory management and the achievement of key performance indicators.

During the three and twelve-month periods ended December 31, 2025 the Company earned $5,563 and $22,146 in services revenue, compared to $5,602 and $21,010 for the corresponding periods ended December 31, 2024. Revenue fluctuates based on labour hours required to service equipment, as well as the achievement of key performance indicators. Additional revenue can also be earned for special project work performed.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

Services Costs

Cost of services include materials, direct labour, travel, training and direct overhead related to airport services, excluding flow-through parts costs.

During the three and twelve-month periods ended December 31, 2025, the Company incurred $4,970 and $19,880 in cost of security services, compared to $4,731 and $18,472 for the corresponding periods ended December 31, 2024. The increase in cost for the three and twelve-month periods ended December 31, 2025, was primarily due to increases in wages related to the services provided and training costs associated with providing services under the airport security maintenance business.

During 2022 and 2023, the Company deferred direct labour costs on the airport security maintenance business while employees were trained to take over a particular customer service location. Upon all airports receiving essential services in early 2024, deferred costs began to be amortized into income over the first five-year term of the airport security maintenance contract. For the three and twelvemonth periods ended December 31, 2025, the Company amortized $216 and $839 of deferred wages into cost of services (three and twelve-month periods ended December 31, 2024 - $215 and $895). These represent non-cash charges to expenses, as the wages being amortized into income were paid in prior years.

Flow-through inventory revenue and costs

The Company provides inventory management services for its Airport Security Maintenance Business customer, buying and reselling spare parts and other inventory to the customer. No margin is generated on these sales; however, the Company charges a fixed service fee, which is included in security services revenue.

Gross margin

Gross margins for the three and twelve months ended December 31, 2025 decreased to $593 or 11% and $2,266 or 10% compared to $871 or16% and $2,538 or 12% in the same period of the prior year due mainly to higher labour and training costs. The Company is taking steps to both decrease costs and increase revenue going forward

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025 AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

Sales and Marketing, General and Administration, Research and Development, and Other Items

Sales and marketing

Sales and marketing expenses include salaries, benefits, commissions, advertising, marketing expenses, and all related selling costs. Sales and marketing for the three- and twelve-month periods ended December 31, 2025, were $950 and $4,046 as compared to $1,279 and $4747 for the same periods in prior year. The decrease in sales and marketing expenses is primarily due to reductions in sales staff as the Company reduced the size of its third-party equipment sales business, and lower sales commissions due to lower sales levels overall, partially offset by higher travel and marketing expenses related to the launch of the new 60MHz platform.

General and administration expenses (“G&A”)

G&A includes the cost of maintaining a corporate office, all expenses related to being a publicly traded company, and shared administration costs incurred with respect to the day-to-day operations of each segment of the Company. For the three and twelvemonth periods ended December 31, 2025, G&A expenses were $968 and $5,663 compared to $1,182 and $5,519 for the same period of the prior year.

Research and development expenses (“R&D”)

Research and development expenses are costs that do not meet IFRS criteria to be capitalized to intangible assets and, therefore, are expensed in the period in which they are incurred. These costs stem from research activities in the Scientific Equipment segment. These activities are essential to the product development strategy for the Company. For the three and twelve-month periods ended December 31, 2025, R&D expenses were $62 and $430 compared to $104 and $544 for the three and twelve-month periods ended December 31, 2024. The decrease for the twelve months ended December 31, 2025, was primarily due to both headcount and overall R&D expenditure reductions in 2025 versus 2024.

Depreciation and amortization expense

For the three and twelve-month periods ended December 31, 2025, depreciation and amortization expense was $512 and $3,188 respectively, compared to $1,086 and $4,353 for the three and twelve-month periods ended December 31, 2024. Depreciation and amortization expenses were lower compared to the prior year due to impairment of certain acquired intangible assets in Q4 2024, which are no longer being depreciated in 2025.

Finance expense

For the three and twelve-month periods ended December 31, 2025, finance expenses were $433 and $1,367, respectively, compared to $293 and $1,345 for the same period in 2024. Net cash interest paid decreased by $154 in from prior year due to a lower term loan balance, partially offset by higher line of credit interest expense. Non-cash interest expense increased by $185 from prior year due to interest accruals on the promissory notes, offset by accounting revaluations of interest free government debt.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

Other expenses (income)

Other expenses include gains and losses related to contingent consideration, foreign exchange, asset disposals, and restructuring costs.

	2025 2024 2025 2024 9 (96) (122) 25 524 - 524 - 113 126 (35) 30 - - 175 285 (22) 94 (36) 94 624124506 434 Three months ended December 31 Twelve months ended December 31
($000's)
Contingent consideration loss (gain) Professional fees associated w ith prior acquisition
Foreign exchange loss (gain)	113 126 (35) 30
Restructuring costs (Gain) loss on disposal of assets

Contingent consideration (gain) loss

This account reflects the changes in valuation related to share-based contingent consideration from past acquisitions.

Foreign exchange gain

Foreign exchange gains or losses typically occur when the exchange rate changes between the time revenue or expenses are recognized and when the resulting receivable is collected or the invoice is paid. Nanalysis conducts significant portions of its business in US dollars and Euros, resulting in exposure to foreign exchange gains and losses.

The Company had a foreign exchange gain of $113 and a $35 loss for the three and the twelve-months ended December 31, 2025, compared to gains of $126 and $30 for the three- and twelve-month periods ended December 31, 2024.

Restructuring costs

During the twelve months ended December 31, 2025, the Company continued its cost reduction and headcount restructuring initiatives, which began in 2024, resulting in restructuring costs of $Nil and $175 for the three and twelve-month periods ended December 31, 2025, compared to $Nil and $285 of restructuring costs incurred in the same periods in the prior year.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

Adjusted EBITDA and Net Loss

	T hree mo nths ended D ecember 31	T hree mo nths ended D ecember 31
($000's)	2025	2024	($ ) C hange
N et lo ss	(729)	(7,452)	6,723
Depreciation and amortization expense	569	1,086	(517)
Finance expense	433	293	140
Stock-based compensation	90	199	(109)
Other (income) expenses	624	124	500
Amortization of deferred wages	216	215	1
Loss from associate	-	345	(345)
Impairment of assets	-	7,052	(7,052)
Current income tax expense (recovery)	(12)	33	(45)
Deferred income tax (recovery) expense	(4)	(60)	56
A djusted EB IT D A	1,187	1,835	(648)

A djusted EB IT D A	1,187	1,835	(648)
	T welve	mo nths ended D ecember 31
($000's)	2025	2024	($ ) C hange
N et lo ss	(5,658)	(13,613)	7,955
Depreciation and amortization expense	3,427	4,356	(929)
Finance expense	1,367	1,345	22
Stock-based compensation	403	1,028	(625)
Other (income) expenses	506	434	72
Amortization of deferred wages	839	895	(56)
Loss from associate	-	1,085	(1,085)
Impairment of assets	-	7,326	(7,326)
Current income tax expense	54	45	9
Deferred income tax recovery	(35)	(67)	32
A djusted EB IT D A	903	2,834	(1,931)

	T hree mo nths ended D ecember 31	T hree mo nths ended D ecember 31	T hree mo nths ended D ecember 31
($000's)	2025	2024	($ ) C hange
Net loss	(729)	(7,452)	6,723
Impairment of assets	-	7,052	(7,052)
N o rmalized net lo ss	(729)	(400)	(329)

	T welve mo nths ended D	T welve mo nths ended D	ecember 31
($000's)	2025	2024	($ ) C hange
Net loss	(5,658)	(13,613)	7,955
Impairment of assets	-	7,326	(7,326)
N o rmalized net lo ss	(5,658)	(6,287)	629

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

Adjusted EBITDA

The Company recorded Adjusted EBITDA of $1,187 and $903 for the three and twelve-month periods ended December 31, 2025, which is a decrease of $648 and $1,931 over the same periods in 2024. This was primarily the result of a decrease in scientific equipment sales, resulting in a decrease in scientific equipment gross margin of $1,013 and $2,510 for the three and twelve month periods ended December 31, 2025, compared to the same periods in the prior year.

Net loss

The Company incurred a net loss of $729 and $5,658 for the three and twelve-month periods ended December 31, 2025, which is an improvement of $6,723 and $7,955 over the same periods in 2024. The decrease in net loss for the twelve months ended December 31, 2025, was primarily due the prior year write off of customer relationships acquired as part of the KPrime acquisition, and the fact that losses from associate are no longer recorded in the consolidated statement of loss and comprehensive loss due to the impairment of the Quad investment in 2024. Lower stock-based compensation was also a factor.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

Investment in Capital Development Costs and Research and Development Expenditures

The Company is engaged in R&D activities and has internally generated intangible assets. Total development costs that meet the criteria for capitalization are reduced by government grants, with the net difference being capitalized. Government grants consist of Canadian federal grants received under various programs, Canadian provincial grants, and foreign grants related to work performed by RS2D S.A.S.

S.A.S.
	Three months ended December 31 Twelve months ended December 31
($000'S)	2025 2024 2025 2024
Gross research and development costs	889 489 2,768 2,961
Less: research expenses	(62) (104) (430) (544)
Development costs	827 385 2,338 2,417
Less:governmentgrants and assistance	(98) (199) (736) (1,114)
Net development costs capitalized to intangible assets	729 186 1,602 1,303

Capitalized development costs are development costs that meet the criteria listed under IFRS for capitalization and represent capital expenditures that the Company believes hold future benefits. Capitalized development costs for the three and twelve-month periods ended December 31, 2025, were $729 and $1,602, compared to $186 and $1,303 for the three and twelve-month periods ended December 31, 2024.

Summary of Quarterly Results

The following table highlights revenue, cash (used in) generated from operating activities, net loss, and loss per share for the eight most recently completed quarters ended December 31, 2025.

recently completed quarters ended December 31, 2025.
2025	2024
($000's) (exceptper share information) Q4 Q3 Q2 Q1	Q4 Q3 Q2 Q1
Revenue 10,676 9,285 9,576 10,594 Cash generated (used in) from operating activities 2,650 (309) (1,568) 2,679 Net loss for the period (729) (1,500) (2,122) (1,307) Lossper share, basic and diluted (0.01) (0.01) (0.02) (0.01)	12,289 10,570 11,474 11,162 1,067 (323) 1,055 1,464 (7,452) (1,644) (1,995) (2,522) (0.06) (0.02) (0.02) (0.02)

In Q4 2025, revenue increased by $1,391 from Q3 2025, primarily due to an increase in sales in the Scientific Equipment business consistent with the segment’s seasonality pattern. Cash generated from operating activities was $2,650, which is an improvement of $2,959 compared to Q3 2025, as both Scientific Equipment and Security Services margins continued to recover. Net loss decreased from ($1,500) in Q3 2025 to ($729) in Q4 2025, primarily due to higher Scientific Equipment margins resulting from operational improvements.
In Q3 2025, revenue decreased by $291 from Q2 2025, primarily due to normal seasonality in the Scientific Equipment business. Cash used in operating activities remained negative for the quarter but did improve over Q2 2025 as Security Services margins continued their recovery, offset by reduced gross margins in the Scientific Equipment business. Net loss decreased from ($2,122) in Q2 2025 to ($1,500) in Q3 2025, driven by higher Security Services margins resulting from operational improvements.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

In Q2 2025 sales were down by $1,018 from Q1 2025 mainly due to full quarter impacts of economic uncertainty and tariff risks. This has cooled markets for capital equipment globally and eliminated expected 2025 growth and, in fact, resulted in a decline in overall sales globally. Cash used in operating activities turned negative in the quarter, driven by the significant decline in revenues. Net loss increased over Q1 2025 due to the same decline in scientific equipment sales.
In Q1 2025 sales decreased by $1,695 from Q4 2024. This was due to Q1 being seasonally slower than Q4 in product sales generally, the negative effect of economic and tariff uncertainty on the Company’s sales prospects in Q1, and slower activity in security services. Cash generated from operations, however, was up significantly over Q4 2024. The $1,612 increase was primarily due to strong working capital management, particularly the accelerated collection of receivables, in Q1 2025. Net losses were down from ($7,452) in Q4 2024 to ($1,307) in Q1 2025. This was primarily due to impairments of intangible assets, a loan to associate, and investment in associate in Q4 2024, as well as stronger margins and the results of the Company’s cost cutting measures taken in 2024.
In Q4 2024, revenue was $1,719 higher compared to Q3 2024 due to higher sales in the Scientific Equipment segment and higher revenue from securities services. Cash generated from operations was up by $1,390 over Q3 2024, primarily due to higher product sales and security services in the fourth quarter. Net loss increased by $5,808 in Q4 2024 compared to Q3 2024 due to the impairment of an intangible asset and the impairment of assets, loan and investment in its associate.
In Q3 2024, revenue was down $904 over Q2 2024 due mostly to seasonality in the Scientific Equipment segment, as sales are typically slow during the summer months. Cash generated from operations was down by $1,378 over Q2 2024, primarily due to reduced sales in the third quarter as well as increased use of cash for working capital. Net loss decreased by $351 in Q3 2024 compared to Q2 2024, due to improved margins in both the Security Services and Scientific Equipment segments.
In Q2 2024, total revenues were up $312 compared to Q1 2024 despite flow-through inventory revenue being down $1,416. This was due to strong product sales driven by a sale and installation of a third-party medical imaging system that occurred in Q2 2024 and Security services revenue increasing $542 over the first six months of 2024. Combined, this led to revenue (excluding flow-through inventory revenue) increasing from $8,939 in Q1 2024 to $10,667 in Q2 2024, an increase of $1,728. The Company generated $1,055 of operating cash flow due to continued strong sales and improving margins in the Security Services segment, offset in part by increased use of cash in working capital compared to the first quarter of 2024. Net loss decreased from ($2,522) to ($1,995) on the back of increased revenues in the second quarter of 2024.
In Q1 2024, the Company completed the full transition of 100% of airports in the Airport Security Maintenance Business. This resulted in an increase in security services revenue, offset partially by lower product sales because of seasonality versus Q4 2023. As a result, cash generated from operations was $1,464, a significant improvement over the prior quarters. Despite positive results in revenue, net losses for Q1 were slightly higher than in Q4 2023 due to a one-off non-cash gain in the revaluation of contingent consideration in relation to business acquisitions in Q4 2023, partially offset by deferred tax expense in Q4 2023, and higher interest expense and foreign exchange loss in Q1 2024.

Selected Annual Financial Information

The following table illustrates selected annual information for the years ending December 31.

($000's) (except per share information)	31-Dec-25	31-Dec-24	31-Dec-23	31-Dec-22
Revenue	40,131	45,495	28,466	24,821
Net Loss	(5,658)	(13,613)	(16,784)	(9,915)
Loss per share, basic and diluted	(0.05)	(0.12)	(0.16)	(0.10)
Total assets	38,413	42,371	53,824	69,902
Total long-term liabilities	7,795	12,448	15,747	8,824

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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LIQUIDITY & CAPITAL RESOURCES

The Company’s objectives when managing capital are to safeguard the Company's ability to continue as a going concern and manage capital so that it can continue to provide returns for shareholders and benefits for other stakeholders through the development, maintenance, and expansion of its operating segments. When managing the Company’s capital and ability to continue as a going concern, the Company considers available information about the future, including the availability of financing, future cash flow projections including growth rates and forecasted margins, as well as the current working capital balance and future commitments of the Company.

The Company defines its capital as share capital, debt and contributed surplus. The Company manages the capital structure and adjusts it in light of changes in economic conditions and the risk characteristics of the underlying assets. The Company’s liquidity needs in the short and long term can be addressed in multiple ways, including funds from operations, available cash and working capital balances, available undrawn amounts on its operating line of credit, new debt instruments, equity issuances, and government funding. The Company monitors its financing requirements through regular forecasting of its cash position. Financing decisions are based on the timing and extent of expected operating and capital outlays. The Company has financed its capital requirements primarily through loans and share issuances since inception. The Company may issue new securities. The Company is not subject to any externally imposed capital requirements.

Working Capital

($000's)	December 31, 2025	December 31, 2024	$ Change
Cash and restricted cash	3,158	1,376	1,782
Loans and leases	17,578	18,361	(783)
Working capital	(464)	3,881	(4,345)

As at December 31, 2025, the Company had ($464) of working capital (December 31, 2024 – $3,881) as a result of the reclassification of $3,633 long-term debt held with the Company’s lender to a current liability. Further, the decrease in working capital is due to cash and cash generated from the collection of receivables being used to fund repayment of long-term debt of $2,158 during the year. Working capital includes $3,158 of cash (December 31, 2024 - $1,376) and also reflects the current portion of amounts also included within Loans and leases. Loans and leases include both the current and long-term portions of included liabilities.

The consolidated financial statements have been prepared in accordance with IFRS policies applicable to a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at December 31, 2025, the Company's borrowings, which are subject to financial covenants, were $5,867 from its term loan and $2,799 borrowed on its line of credit (December 31, 2024 - $7,500 from its term loan and $2,797on the line of credit). As at December 31, 2025, the Company is subject to a funded debt to Bank EBITDA covenant of no greater than 4.00:1, a fixed charge coverage ratio of no less than 1.00:1 and a current ratio covenant of 1.10:1.00.

As at December 31, 2025, the Company was compliant with its current ratio covenant but is not in compliance with either its funded debt to Bank EBITDA covenant or fixed charge coverage ratio covenant. As such, this has created an unconditional right for ATB Financial to demand repayment of the term loan and the Company has therefore classified the full balance of the term loan as a current liability as at December 31, 2025. At the reporting date, the Company’s lender has not issued a demand for repayment on this amount.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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The Company’s liquidity is dependent on its ability to generate positive cash flows from operations, to raise capital by selling additional equity, or by obtaining new or amended credit facilities. There can be no assurance that the Company will maintain sufficient cash flows to fund its ongoing operations. In addition, the Company may not be able to secure adequate debt or equity financing on desirable terms, or at all. Due to the above factors, there is material uncertainty that may cast doubt on the Company’s ability to continue as a going concern.

For further details, please see the Loans and Borrowings section of this MD&A.

Loans and Borrowings

($000's)	Note	December 31, 2025	December 31, 2024
Western Economic Diversification Canada interest-free loans	A	1,147	1,462
Prêt garanti par l’état Euro denominated loan	B	16	45
Regional Recovery Relief Fund interest-free loan	A	472	528
Business Scale-up interest-free loan	A	4,158	3,979
Line of credit	C	2,799	2,797
Term Bank loan	D	5,867	7,500
Unsecured Promissory Notes	E	1,796	-
Other		20	30
Total loans and borrowings		16,275	16,341
Less: Deferred finance fees		(285)	(184)
Total loans and borrowings net of finance fees		15,990	16,157
Less: Current portion		9,788	6,015
Non-current portion of loans and borrowings		6,202	10,142

Credit Facilities

Note A – Nanalysis

The Company has the following unsecured interest-free loans:

WINN #2: $2,773 initially repayable in monthly installments of $46 commencing February 1, 2022, and maturing on January 31, 2027. The obligation was recorded at its fair value at inception, estimated using a 6.0% discount rate. Any amounts in default will incur interest at the Bank of Canada minimum lending interest rate plus 3% compounded monthly. This loan is unsecured.
Regional Recovery Relief Fund (“RRRF”): $1,000 initially repayable in 35 monthly installments of $28 commencing January 1, 2023. The obligation was recorded at its fair value at inception, estimated using a 6.0% discount rate. Any amounts in default will incur interest at the Bank of Canada minimum lending interest rate plus 3% compounded monthly. This loan is unsecured.
Business Scale-up: In 2022, the Company received a funding contribution commitment of $5.0 million from Prairies Economic Development Canada’s Business Scale-up and Productivity program. The Company began drawing on the loan in 2022 and will continue to draw on the loan until the earlier of drawing the full available amount of the facility or the beginning of repayments on September 1, 2025. As at December 31, 2025, the Company had withdrawn 100% of the available funding (December 31, 2024 –

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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99.7%). The obligation was recorded at its fair value at inception estimated using a 6%-12% discount rate depending on the timing of each drawdown on the facility. Any amounts in default will incur interest at the Bank of Canada minimum lending interest rate plus 3% compounded monthly. This loan is unsecured and repayable over 60 months beginning September 1, 2025.

On March 13, 2024, the Company renegotiated its payments related to WINN #2 and RRRF as follows:

WINN #2 became repayable in monthly installments of one thousand dollars per month, effective April 1, 2024, and increasing to $71 effective April 1, 2025, until maturity on January 31, 2027. All other terms and conditions of the loan remain unchanged.
RRRF became repayable in monthly installments of one hundred dollars per month, effective April 1, 2024, and increasing to $18, effective April 1, 2025, with a revised maturity date of December 31, 2027. This reflects an extension to maturity of two years.

Effective August 25, 2025, the Company obtained a payment holiday on the WINN #2, RRRF and Business Scale-up loans for six months, as well as a six-month extension in the amortization period of each. Scheduled repayments resume in February 2026 for the RRRF loan and March 2026 for the Business Scale-up and WINN #2 loans.

Note B – RS2D

RS2D has one Euro denominated loan - Prêt garanti par l’état – (“PGE”). This is an unsecured Euro denominated loan granted by the French state to RS2D. The loan bears interest at 0.7% and is repayable in monthly installments of $3, commencing on July 20, 2021, and maturing on June 20, 2026. The obligation was recorded as its fair value at inception estimated using a 2.5% discount rate.

Note C – Line of Credit

The Company has an operating line of credit with ATB Financial, under which the Company may borrow up to $5,000 at an interest rate of prime plus 1.0%. This facility also bears a standby fee of 0.4% per annum on the unused portion of the facility. On March 28, 2024, the Company negotiated a covenant holiday with its lender which resulted in an increase to the interest rate to prime plus 2.5%. During any period of default, the Company’s fees and interest rates will increase by 2.00%. See Note F – Debt Covenants.

The borrowing base of the facility is based on the value of the Company’s accounts receivable and inventory, less any amounts outstanding on its $300 credit card facility, also advanced by ATB Financial. The available borrowing base for the Company was reduced as a result of the covenant breach, from $5,000 to $4,300 during the quarter ended December 31, 2025.

Note D – Term Bank Loan

The Company has a term loan of $10,000 from ATB Financial which was advanced in one tranche on June 29, 2023, and bears interest at a rate of prime plus 2.50%. During any period of default, the Company’s fees and interest rates will increase by 2.00%. The loan was originally amortized over 48 months, with repayments having begun in January 2024. During the period ending December 31, 2025, the Company signed an amending agreement with its lender, obtaining a reduction in its loan principal payment from May 31, 2025, to April 30, 2026, as well as an extension of its loan amortization to May 31, 2028. Included in this amending agreement was a financing fee payable to the Company’s lender of $200. See Note F – Debt Covenants.

Note E – Unsecured promissory notes

On June 12, 2025, the Company issued unsecured promissory notes for aggregate gross proceeds of $2,000 (Note 12[b] of the Company’s audited consolidated financial statements). The unsecured promissory notes mature on June 13, 2027, and bear simple interest at a rate of 12% per annum, payable annually within 30 days of the first and second anniversary date of the unsecured promissory notes. At the Company's option, and subject to TSX Venture Exchange approval, interest may be paid in cash or common shares of the Company. The Company intends to use the net proceeds from the Offering for general working capital purposes and to support ongoing business operations.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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Note F – Debt Covenants

Both the operating line of credit (Note C) and term loan facility (Note D) are secured by a general security agreement over the property of Nanalysis Scientific Corp. and its significant subsidiaries. As a condition of both the operating and term facilities, the Company must maintain a current ratio greater than or equal to 1.10:1.00, funded debt to Bank EBITDA must not exceed 3.50:1, and the Company must maintain a fixed charge coverage ratio of greater than or equal to 1.20:1. At December 31, 2025 the Company was not in compliance with its funded debt to Bank EBITDA and fixed charge coverage ratio covenants.

On May 27, 2025, the Company renewed its term and operating facilities with ATB Financial and renegotiated its covenant terms. Pursuant to the amending agreement, the Company will be subject to a funded debt to Bank EBITDA covenant of no greater than 4.00:1, tested for the quarters ending June 30, 2025, December 31, 2025, and December 31, 2025. Effective March 31, 2026, the Company will be required to maintain a funded debt to Bank EBITDA covenant of 3.50:1. Additionally, the Company will be subject to a fixed charge coverage ratio covenant of no less than 1.00:1 for the quarters ending September 30, 2025, and December 31, 2025. Effective March 31, 2026, the Company will be required to maintain a fixed charge coverage ratio covenant of 1.20:1.

At December 31, 2025, the Company’s applicable current ratio for its bank covenant was 1.75:1.00, but the Company was not in compliance with its funded debt to Bank EBITDA covenant and the fixed charge coverage ratio covenant. As such, this has created an unconditional right for ATB Financial to demand repayment of the term loan and the Company has therefore classified the full balance of the term loan as a current liability at December 31, 2025.

Lease Liabilities

	Twelve	months
	ended December 31
($000's)	2025	2024
Balance beginning of period	2,204	2,921
Additions	395	78
Lease payments	(816)	(801)
Disposals	(175)	(45)
Foreign exchange	(20)	51
Balance, end of the period	1,588	2,204
Current portion	779	826
Long-term portion	809	1,378
	Twelve	months
	ended December 31
($000's)	2025	2024
Interest expense related to leases	151	198

The Company and its subsidiaries have commitments under leases for buildings, office space, and vehicles, with varying terms that expire between 2025 and 2030. The Company has sub-leased one of its building facilities starting December 2024.

The Company also has contractual commitments for leases that are short-term or low-value and accounts for them as operating leases. These operating leases relate to airport spaces, and the leases are due as follows:

($000's)	December 31, 2025
Within one year	114
1-3 years	52
4-5years	1
Total operating lease commitments	167

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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Financial Management

Financial Management
	Twelve months ended December 31
($000's)	2025	2024	$ Change
Cash generated from (used in):
Operating activities	3,452	3,263	189
Investing activities	(1,779)	(1,690)	(89)
Financing activities	109	(956)	1,065
Increase in cash	1,782	617	1,165

Cash flows generated from operations was $3,452 for the twelve-month period ended December 31, 2025, an increase of $189 from the corresponding period in 2024.

Cash flows used in investing activities for the twelve-month period ending December 31, 2025, were $1,779, compared to $1,690 in the corresponding period in 2024, an increase of $89.

Cash flows generated from financing activities for the twelve-month period ended December 31, 2025, were $109, an increase of $1,065 compared to the twelve-month period ended December 31, 2024. The increase in cash generated from financing activities was due to lower debt repayments and the impact of debt and equity financing completed in 2025.

On June 12, 2025, the Company issued unsecured promissory notes for aggregate gross proceeds of $2,000. These promissory notes were issued in the second quarter of 2025 for net proceeds of $1,966.
On December 23, 2025, the Company announced and closed a non-brokered private placement offering of units with each unit comprised of one common share and one half warrant exercisable at $0.20 and expiring on December 23, 2027. A total of 16,526,283 units were issued at a price of $0.15 per unit for gross proceeds of $2,479 and net proceeds of $2,456.

The table below summarizes the use of proceeds incurred up to December 31, 2025. Actual use of proceeds were consistent with the expected use of proceeds from the applicable financing disclosure:

F inancing	P rincipal Use	A mo unt($ )
June 12, 2025 Promissory Notes	General corporate purposes and to support ongoing business operations	1,966
December 23, 2025 - Units	Debt reduction	2,456

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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SHARE CAPITAL

[a] Authorized

Unlimited number of common shares, without nominal or par value Unlimited number of Class A voting preferred shares without par value Unlimited number of Class B non-voting preferred shares without par value

[b] Issued Common Shares

Common Shares Issued	Number
Balance, December 31, 2023	101,915,910
Issuance of common shares	11,193,582
Exercise of stock options and RSUs	115,000
Balance, December 31, 2024	113,224,492
Issuance of common shares	19,085,656
Exercise of stock options and RSUs	-
Balance, December 31, 2025	132,310,148

On March 20, 2024, the Company announced and closed a public prospectus exempt offering of units and concurrent brokered private offering of units with each unit comprised of one common share and one half warrant exercisable at $0.65 and expiring on March 20, 2026. A total of 11,111,110 units were issued at a price of $0.45 per unit for gross proceeds of $5,000 and net proceeds of $4,337. The units were valued utilizing the residual method. The warrants were valued using the Black‑Scholes option‑pricing model, with a fair value of $94 at the date of issuance incorporating assumptions relevant on the date of issuance. The residual value under gross proceeds was allocated to common shares at $4,337.

On June 12, 2025, in connection with the unsecured promissory notes, the Company issued 1,600,000 common shares of the Company to the lenders. These shares represent a value equal to 20% of the principal amount of the unsecured promissory notes, calculated based on a market price of $0.25 per share, which was the closing price of the Company's common shares on June 5, 2025, prior to the announcement of the promissory note offering. These shares are subject to a four-month hold period, which expired October 13, 2025.

On October 1, 2025, the Company settled a contingent liability in the amount of $182 for a total of 959,373 shares.

On December 23, 2025, the Company announced and closed a non-brokered private placement offering of units with each unit comprised of one common share and one half warrant exercisable at $0.20 and expiring on December 23, 2027. A total of 16,526,283 units were issued at a price of $0.15 per unit for gross proceeds of $2,479. The units were valued utilizing the residual method. The warrants were valued using the Black‑Scholes option‑pricing model, with a fair value of $413 at the date of issuance incorporating assumptions relevant on the date of issuance. The residual value under gross proceeds was allocated to common shares at $2,066.

Subsequent to year end, on January 26, 2026, the Company announced and closed the second and final tranche of its $3.4MM nonbrokered private placement offering of units with each unit comprised of one common share and one half warrant exercisable at $0.20 and expiring on January 26, 2028. A total of 6,145,300 units were issued at a price of $0.15 per unit for gross proceeds of $921 and net proceeds of $771.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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[c] Loss per share

All potentially dilutive instruments were excluded from the diluted weighted-average share calculation as they were anti-dilutive to the loss for the period.

	Twelve months ended December 31
($000's) except for number of shares	2025 2024
Numerator Loss attributable to common shares ($) Denominator Weighted average number of shares for basic earning per share calculation (000's) Weighted average number of shares for diluted earning per share calculation (000's)	(5,658) (13,613) 114,707 110,639 114,707 110,639
Basic loss per common share ($/share)	(0.05) (0.12)
Diluted loss per common share ($/share)	(0.05) (0.12)

[d] Stock options

The Company has a stock option plan that provides for the issuance of options to eligible persons. The option price under each option granted must be no less than the discount market price defined by the TSX-V. The term of the options must be no longer than five years, and the directors of the Company determine the vesting period, which is typically three years. The maximum number of outstanding options must be no more than 10% of the issued and outstanding common shares at any point in time, with the 10% including both stock options and restricted share units. The maximum number of outstanding options issued for investor relations must be no more than 2% of the issued and outstanding shares, and options issued for investor relations must vest in stages over a 12-month period with no more than one quarter of the options vesting in any three-month period. Stock options and RSUs are settled in shares of the Company.

Stock Options Outstanding	Number	Weighted Average Exercise Price ($)
Balance, December 31, 2023	7,678,867	0.99
Granted	2,297,000	0.50
Expired	(1,147,500)	0.90
Forfeitures	(1,130,977)	0.63
Balance, December 31, 2024	7,697,390	0.91
Granted	1,162,000	0.43
Expired	(824,167)	0.60
Forfeitures	(1,828,342)	0.97
Balance, December 31, 2025	6,206,881	0.81

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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The fair values of stock options granted were estimated using the Black-Scholes option pricing model with the following weightedaverage assumptions.

	2025	2024
Risk-free interest rate	2.63% - 2.96%	2.71% - 3.42%
Estimated annualized volatility based on historical performance	72% - 74%	74% - 76%
Expected life	5.0 years	5.0 years
Expected dividend yield	0%	0%
Exercise price	$0.35 - $0.50	$0.50

As at December 31, 2025, the Company had the following stock options outstanding and exercisable:

Exercise	Number of Options	Weighted	Number of Options
Price	Outstanding	Average Life	Exercisable
$0.35	575,000	4.76	200,000
$0.50	2,497,000	3.86	1,271,510
$0.60	572,500	0.41	572,500
$1.10	1,056,881	2.35	816,921
$1.20	25,000	1.72	25,000
$1.24	50,000	1.04	50,000
$1.30	100,000	0.76	100,000
$1.32	1,030,500	1.42	1,030,500
$1.50	200,000	1.21	200,000
$1.70	100,000	1.13	100,000
	6,206,881		4,366,431

[e] Restricted Share Units (“RSUs”)

The Company maintains an RSU plan as compensation for certain directors and employees of the Company. These RSUs vest over three years from the grant date and expire at the end of the third full calendar year subsequent to the grant date.

During the period ended December 31, 2024, 445,000 RSUs were granted, out of which 100,000 vested immediately and the remaining 345,000 vest over three years. As at December 31, 2024, all 1,000,000 RSUs available under the plan at that time had been granted.

During the year ended December 31, 2025, the shareholders approved an amendment to the RSU plan to add 2,000,000 RSUs to the existing plan. As at December 31, 2025, 1,000,000 RSUs available under the plan had been granted (December 31, 2024 – 1,000,000).

RSUs Outstanding

RSUs Outstanding
Balance, December 31, 2023	295,000
Granted	445,000
Exercised	(115,000)
Balance, December 31, 2024	625,000
Granted	-
Exercised	-
Balance, December 31, 2025	625,000

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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[f] Stock-based compensation expense

[f] Stock-based compensation expense
	Twelve months ended
($000's)	2025 2024
Stock-based compensation expenses related to stock options Stock-based compensation expenses related to RSUs	348 854 55 174
Total	403 1,028

[g] Warrants

Warrants Outstanding	Number	Weighted Average Exercise Price ($)
Balance, December 31, 2023	8,166,042	0.89
Issued	6,407,724	0.65
Expired	(7,666,042)	0.89
Balance, December 31, 2024	6,907,724	0.66
Issued	8,263,142	0.20
Expired	(500,000)	0.80
Balance, December 31, 2025	14,670,866	0.39

			Number of Warrants	Vested and
Type of Warrant	Expiry Date	Exercise Price ($)	Outstanding	Exercisable
Warrant	March 20, 2026	0.65	5,555,555	5,555,555
Broker w arrant	March 20, 2026	0.65	852,169	852,169
Warrant	December 23, 2027	0.20	8,263,142	8,263,142
			14,670,866	14,670,866

On March 20, 2024, the Company completed a public prospectus exempt offering of units and concurrent brokered private offering of units discussed in Note 13[b] of the Company’s audited consolidated financial statements. The combined offering resulted in the Company issuing 5,555,555 warrants that expire on March 20, 2026. In addition, 852,169 broker warrants were issued in relation to the same combined offering, with an expiry date of March 20, 2026. The fair values of broker and lender warrants were estimated using the Black-Scholes option pricing model.

During the period ended December 31, 2025, 500,000 warrants expired resulting in an increase in contributed surplus of $60. During the period ending December 31, 2024, 7,666,042 warrants expired, resulting in an increase in contributed surplus of $298.

On December 23, 2025, the Company completed a non-brokered private placement offering of units discussed in Note 13[b]. The combined offering resulted in the Company issuing 8,263,142 warrants that expire on December 23, 2027.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025 AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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REVENUE AND SEGMENT INFORMATION

[a] Segment information

The Company’s activities are carried out through three operating segments, within which are two reportable segments: Scientific Equipment and Security Services. The Company’s executive leadership is responsible for strategic decision making, resource allocation, and assessing financial performance, and, as a group, is identified as our chief operating decision maker for the purpose of reporting segment information.

The Company’s Scientific Equipment segment is comprised of its proprietary product sales as well as sales of third-party products and investment in associate. The Security Services segment is comprised of the Company’s commercial and airport security equipment maintenance and installation services. Its Corporate operating segment includes the Company’s costs related to general corporate overhead.

Inter-segment transactions are recorded at values that approximate third-party selling prices and are eliminated for segmented reporting.

($000's)

($000's)
Twelve months ended December 31, 2025	Scientific Equipment	Security Services	Corporate Total
Revenue	13,441	26,690	-40,131
Income (loss) before other items	854	1,264	(2,293) (175)
Impairment of assets	-	-	--
Net (loss) income	(2,180)	590	(4,068) (5,658)
Depreciation and amortization expense	2,633	555	-3,188
Capital expenditures	1,403	481	-1,884
Total assets as at December 31, 2025	20,134	14,583	3,69638,413

($000's)

($000's)
Twelve months ended December 31, 2024	Scientific Equipment	Security Services	Corporate	Total
Revenue	19,396	26,099	-	45,495
Income (loss) before other items	2,722	1,697	(2,483)	1,936
Impairment of assets	7,326	-	-	7,326
Net (loss) income	(8,651)	748	(5,710)	(13,613)
Depreciation and amortization expense	3,627	726	-	4,353
Capital expenditures	1,455	403	-	1,858
Total assets as at December 31, 2024	23,864	17,467	1,040	42,371

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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[b] Geographic segments

The Company’s revenues are allocated to geographic segments as follows:

The Company’s revenues are allocated to geographic segments as follows:
	Twelve months ended
($000's)	2025 2024
Canada United States of America Europe Asia Other	28,685 28,909 8,399 8,001 1,995 6,470 678 1,237 376 878
	40,131 45,495

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

[a] Fair value of financial instruments

The carrying values of cash, accounts receivable, other receivables, accounts payable and accrued liabilities, and the line of credit approximate fair value due to the short-term nature of these instruments. The loan to associate is measured at amortized cost and its fair value approximates its carrying value. The Company’s bank loan, WINN loan, RRRF loan, Prêt garanti par l’état, and business scaleup loans are measured at amortized cost and its fair value approximates its carrying value.

[b] Fair value of contingent consideration

K’Prime Acquisition

Contingent consideration related to the K’Prime acquisition is based on the K’Prime subsidiary reaching certain performance goals related to entity performance, to be settled in cash, as well as contingent consideration related to the performance on a specific contract to be settled in shares of the Company.

Contingent consideration related to the K’Prime acquisition was settled by the issuance of 959,373 common shares of the Company in October 2025.

One Moon Scientific Acquisition

Contingent consideration payable related to the acquisition of One Moon Scientific ("OMS") is based on performance goals related to specific targets that OMS must meet through the end of 2026. The Company has used internal forecasts to estimate the amount of each component of contingent consideration and valued it using an income approach, discounted using a risk-adjusted discount rate.

The Company reassesses the forecast and estimated amount of contingent consideration and revises the risk-free discount rate based on available market data at each reporting period.

The Company has entered into an amendment to the purchase agreement, extending the period in which contingent consideration may be paid out on the acquisition to the end of 2026. For the twelve months ended December 31, 2025, the Company recognized an

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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unrealized (loss) gain of $5 related to revaluation of contingent consideration related to the OMS acquisition within business acquisition costs (twelve months ended December 31, 2024 – unrealized loss of $25).

Significant assumptions used in valuation of contingent consideration include forecasted revenue and applicable discount rates.

[c] Fair value hierarchy

The three-level hierarchy reflects the significance of inputs used when determining fair value:

Level 1: Fair value is determined using readily observable inputs from public or active markets.
Level 2: Fair value is determined using inputs other than those quoted in public or active markets and may be both directly and indirectly observable.
Level 3: Fair value is derived using unobservable inputs for which there is little to no available market data, and therefore the Company must develop its own assumptions for valuation.

Contingent consideration was valued using a level 3 estimate for both 2025 ($153) and 2024 ($457).

[d] Risk management

The following presents information about the Company’s exposure to each of the above risks and the Company’s objectives, policies, and processes for measuring and managing risk.

[i] Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

[ii] Credit risk

Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk in the event of non-performance by counterparties in connection with its cash, accounts receivable, other receivables and loan to associate. The Company’s maximum exposure to credit risk at December 31, 2025, is the carrying amount of cash, accounts receivable, other receivables, and loan to associate on the consolidated statement of financial position. The Company mitigates this risk by holding its cash in major Canadian financial institutions and performing credit inquiries on its customers.

Management regularly assesses the Company’s exposure to credit risk and provides allowances for potentially uncollectible accounts receivable as they become known. Although collection of these receivables could be influenced by economic factors, management considers the risk of significant loss to be mitigated by the number, reputation, and nature of the companies with which the Company does business.

Management assesses the expected risk of credit loss at each reporting period based on consideration of factors such as the history, creditworthiness and financial condition of each individual customer, economic factors, the age of the financial instrument, in particular instruments over 180 days past due, the willingness of the counterparty to engage in a payment plan, and any other criteria deemed material to the analysis. Trade accounts receivable are written off when there is no reasonable expectation of recovery. During the year ended December 31, 2025, bad debts of $Nil were recognized as an expense (2024 - $Nil).

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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[iii] Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they come due. As of December 31, 2025, the Company had working capital of ($464) (December 31, 2024 - $3,881). The Company’s exposure to liquidity risk is dependent on its ability to capitalize on its research and development, ability to manufacture and deploy new products, sale of inventory, collection of accounts receivable and other receivables, and the raising of funds to meet commitments, sustain operations, continue research and development, and service contracts. The Company manages liquidity risk through the management of working capital, cash flows, availability of borrowing facilities and share issuances. The Company has liabilities with varying maturities as disclosed in the interim condensed consolidated statement of financial position and Notes 10, 11, and 12.

[iv] Market risk

Market risk is the risk of loss that results from changes in market prices. Market risk is comprised of foreign currency risk and interest rate risk. The level of market risk to which the Company is exposed to depends on market conditions, expectations of future price or market rate movements, and the composition of the Company’s financial assets and liabilities. The Company regularly monitors market risk exposure, tolerance, and control processes in order to manage the exposure related to changes in market risk and to stay within acceptable market risk limits.

[v] Currency risk

The Company is exposed to the financial risk related to the fluctuation of foreign exchanges rates. The majority of the Company’s sales are in Canadian dollars and U.S. dollars. The Company has not entered into foreign exchange derivative contracts.

The Company had the following assets and liabilities denominated in U.S. dollars at the end of period:

	December 31,	2025	December 31,	2024
(000's)	US$		US$
Cash		358		430
Accounts receivable	1,047		1,616
Prepayments and other receivables		85		80
Lease receivables		238		369
Inventory		10		78
Accounts payable & accrued liabilities		(535)		(528)
Unearned revenue		(521)		(779)
Debt and lease liabilities		(220)		(350)
Total		462		916

The above assets and liabilities were translated using an exchange rate of 1.37 at December 31, 2025 (December 31, 2024 – 1.44). Based on the above net exposure, as at December 31, 2025, assuming all other variables remain constant, a 10% appreciation or deterioration of the Canadian dollar against the U.S. dollar would result in a change of approximately $63 in the Company’s other comprehensive income (December 31, 2024 - $132). Total sales in U.S. dollars for the twelve months ended December 31, 2025, were $6,793 (twelve months ended December 31, 2024 - $8,099). A 10% appreciation or deterioration of the Canadian dollar against the U.S. dollar would result in a change of approximately $949 in revenue (twelve months ended December 31, 2024 - $1,112).

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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The Company had the following assets and liabilities denominated in Euros at the end of the period:

	December 31,	2025	December 31,	2024
(000's)	Euro (€)		Euro (€)
Cash		44		503
Accounts receivable		621		562
Prepayments and other receivables		398		416
Inventory		67		47
Accounts payable and accrued liabilities		(289)	(1,104)
Unearned revenue		(524)		(393)
Debt and lease liabilities		(24)		(51)
Total		293		(20)

The above assets and liabilities were translated at 1.61 at December 31, 2025 (December 31, 2024 – 1.49). Based on the above net exposure as at December 31, 2025, assuming that all other variables remain constant, a 10% appreciation or deterioration of the Canadian dollar against the Euro would result in a change of approximately $47 in the Company’s other comprehensive income (December 31, 2024 - $3). Total sales in Euros for the twelve months ended December 31, 2025, were €920 (twelve months ended December 31, 2024 - €4,031). A 10% appreciation or deterioration of the Canadian dollar against the Euro would result in a change of approximately $145 in revenue (twelve months ended December 31, 2024 - $597).

[vi] Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in the market interest rates. During the twelve months ended December 31, 2025, fluctuations in the bank prime interest rate had an insignificant impact on the Company's interest expense. At December 31, 2025, the Company had $5,867 of outstanding debt on its interest-bearing term loan. If the prime borrowing rate changed by 4%, it would have an impact of $234 on interest expense on an annualized basis (December 31, 2024 - $300).

[vii] Economic dependence

A portion of the Company’s operations consists of providing airport security equipment maintenance services to a Crown Corporation of the Government of Canada. During the twelve months ended December 31, 2025, the Company was dependent on this service contract for 67% of its revenue (twelve months ended December 31, 2024 – 56%). The contract is due for renewal in May 2028. There were no other customers who accounted for more than 10% of the Company's revenue during the period.

Additional Risk Factors

In addition to the Risk Factors discussed in the Company’s Annual Information Form dated December 31, 2023, and filed on www.sedarplus.ca, the Company has identified the following additional risk factors:

Trade Dispute and Tariff Risk

The Company conducts significant portions of its business selling into foreign markets, largely from a Canadian manufacturing base. Changes to tariffs rates, or the imposition of tariffs or retaliatory tariffs by any nation the Company is selling into, or purchasing from, may have a significant, or material, adverse effect on the Company’s gross margins.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

==> picture [117 x 48] intentionally omitted <==

In addition, competitors of the Company are, or may be, located in jurisdictions with no, or lower, tariffs than the Company. This may make it difficult or impossible for the Company to pass tariff costs through to its customers.

Finally, the economic uncertainty created by tariffs and the changing tariff environment may have a negative impact on the confidence of the Company’s customers, reducing customer demand for the Company’s products.

The timing, rate, or applicability of any tariffs is difficult to predict.

The Company also maintains supply chains which involved jurisdictions that may be involved in trade disputes with Canada or other jurisdictions in which the Company operates. As a result, the Company may be unable to source key raw materials to produce its goods in sufficient quantities, or at all. This may result in the Company being unable to fulfill some or all of its product sales orders.

RECENT ACCOUNTING PRONOUNCEMENTS

On April 9, 2024, the IASB issued a new standard IFRS 18 Presentation and Disclosure in Financial Statements (“IFRS 18”) which will replace IAS 1. While many of the existing principles of IAS 1 are retained with limited changes, IFRS 18 introduces changes to the presentation of the Statement of Net Income and Comprehensive Income and disclosures of information, including managementdefined performance measures. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027. The Company has completed its initial assessment of the presentation impacts of IFRS 18, which will be adopted on its effective date. While IFRS 18 will impact the presentation and disclosure of certain financial information, the adoption of this standard is not expected to have an impact on the Company’s financial reporting systems or underlying processes. The Company will continue to monitor the interpretation and application of IFRS 18 ahead of its effective date.

Additionally, in May 2024 the IASB issued amendments to IFRS 7 Financial Instruments: Disclosures and IFRS 9 Financial Instruments relating to settling financial liabilities using an electronic payment system and assessing contractual cash flow characteristics of financial assets. The amendments will be effective on January 1, 2026. The adoption of this amendment is not expected to have a material impact on the Company’s financial statements.

OFF-BALANCE SHEET ARRANGEMENTS

Except for any commitments and contingencies disclosed herein, the Company does not believe it has any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future impact of the Company’s financial condition, results of operations, liquidity or capital expenditures.

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2025

AMOUNTS ARE STATED IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS AND CERTAIN OTHER EXCEPTIONS AS NOTED

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RELATED PARTY DISCLOSURE

RELATED PARTY DISCLOSURE
	Twelve months ended December 31
($000's)	2025 2024
Officers and directors salaries, w ages, fees & benefits Lease expenses paid to a related party Employee compensation paid to related parties	1,134 1,283 - 37 - 87
	1,134 1,407

Key management personnel compensation

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the business activities of the Company, including all of its directors, along with certain executives. Directors are remunerated through a cash director’s fee and participation in the stock option and RSU plans. Executive compensation is comprised of base salary, benefits and participation in the stock option and RSU plans. The Company does not have a defined benefit or actuarial pension plan. Key management personnel participate in the stock option plan.

Related party transactions

Related party transactions are assessed for significance within the Company’s normal process for transaction approval. Transactions determined to be significant by Management are approved by the Audit Committee of the Board of Directors.

During the twelve months ended December 31, 2025, the Company does not have any significant related party transactions. During the twelve months ended December 31, 2024, the Company has approved several transactions with directors of the Company or parties related to directors.

The Company leased its head office from a then director of the Company from January 1, 2024, until April 2024 when the director ceased to be a related party to the Company. During the period from January 1, 2024, to April 2024, when the then director was a related party, the Company incurred $37 for lease expenses. These amounts have been recorded at the amounts that have been agreed upon by the two parties.
In addition, amounts were paid to relatives of the same former director of the Company as employment compensation. During the period from January 1, 2024, to April 2024, expenses paid on wages were $87.

Related party transactions with associate

For the twelve months ended December 31, 2025, the Company provided $156 of consultancy services and $124 of product sales to Quad (twelve months ended December 31, 2024 - $321 of product sales and $104 of cost of product sold). These amounts are gross and subject to elimination of 43.48% related to the Company’s share in associate until June 20, 2025. On June 20, 2025, there was an increase in share capital in Quad System AG issued to other shareholders, resulting in a relative decrease of the Company’s ownership for Quad from 43.48% to 39.12%.

At December 31, 2025, the Company had gross outstanding balances of $263 (December 31, 2024 - $762) in accounts receivable and $94 in accounts payable and accrued liabilities (December 31, 2024 - $218), due from and to its associate, respectively. During the twelve months ended December 31, 2024, the Company has recognized an impairment provision of $496 against certain outstanding balances due from its associate. No further impairment provision has been recognized for the twelve months ended December 31, 2025.

AI assistant

Nanalysis Scientific — Management Reports 2026

47423_rns_2026-04-08_dcbb55d7-42e6-4048-a328-0f61e658c50f.pdf

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Contents

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

READER AND FORWARD-LOOKING STATEMENT ADVISORY

Forward Looking Statements

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Business overview

Overview

Scientific Equipment Segment

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Security Services Segment

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Critical Accounting Policies and Estimates

Non-IFRS and Supplementary Financial Measures

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Adjusted EBITDA

Loans and Leases

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Supplementary Financial Measures

SCIENTIFIC EQUIPMENT SEGMENT

Product Overview

Magnetic Resonance Test, Measurement and Diagnostic Systems

Bridging the Gap in MR Accessibility

NANALYSIS SCIENTIFIC CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

Technology Portfolio

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Nanalysis 100-NMR

High-field NMR

QUAD NMR Console

MRI

Cameleon 4 Console

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Software Portfolio

NMRGui

SPINit

NMRFx

Technology Under Development

MRI Technology Platform

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Robust Industrial Detector

Automated Industrial Analyzer

Full High-Field NMR Systems

Third Party Equipment Sales

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

SECURITY SERVICES SEGMENT

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

FINANCE AND OPERATIONS

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Overall Performance and Discussion of Operations

Scientific Equipment Outlook and Gross Margin

Revenue and Outlook – Scientific Equipment

Product sales

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Cost of product sold

Gross margin

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Security Services Outlook and Gross Margin

Revenue and Outlook – Security Services

Services Revenue

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Services Costs

Flow-through inventory revenue and costs

Gross margin

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Sales and Marketing, General and Administration, Research and Development, and Other Items

Sales and marketing

General and administration expenses (“G&A”)

Research and development expenses (“R&D”)

Depreciation and amortization expense

Finance expense

NANALYSIS SCIENTIFIC CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS

Other expenses (income)

Contingent consideration (gain) loss

Foreign exchange gain

Restructuring costs

Nanalysis Scientific Management Reports 2026