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OCUMETICS TECHNOLOGY CORP. Management Reports 2026
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Management Reports
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ocumetics
TECHNOLOGY CORP
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(Expressed in Canadian Dollars)
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
This management's discussion and analysis of financial position and results of operations ("MD&A") is prepared as at April 20 and should be read in conjunction with the audited financial statements and related notes thereto of Ocumetics Technology Corp. (the "Company", "Ocumetics" or "OTC") for the years ended December 31, 2025 and 2024, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). All dollar amounts included therein and in the following MD&A are expressed in Canadian dollars except where noted.
The Company's financial statements have been prepared on the going concern basis, 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 has not generated any revenues from operations and for the year ended December 31, 2025 has incurred a net loss of $5,373,327 and negative cash flows from operations of $3,365,648, and has an accumulated deficit of $17,573,126. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors indicate the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern, such adjustment could be material.
In this discussion, unless the context requires otherwise, references to "we" or "our" are references to Ocumetics.
Ocumetics was incorporated on February 5, 2018 under the Business Corporations Act of Alberta. The Company's current focus is to develop an accommodating intraocular lens to eliminate the need for corrective lenses, especially for people over 45 years of age. The Company's registered office is located at 1250, 639-5th Avenue SW, Calgary, Alberta T2P 0M9. The Company changed its name from Quantum Blockchain Technologies Ltd. ("Quantum") to Ocumetics Technology Corp. on August 27, 2021 and is listed on the TSX Venture Exchange (the "Exchange") under the symbol "OTC", on the OTC QB Market under the symbol "OTCFF" and on the Frankfurt Stock Exchange under the symbol "2QBO".
Quantum completed an amalgamation transaction (the "Transaction") with Ocumetics pursuant to an amended and restated amalgamation agreement dated July 23, 2021 (the "Amalgamation Agreement"). The Transaction was completed on August 27, 2021 and constituted a reverse take-over acquisition ("RTO"). After the RTO, the Company changed its fiscal year end from July 31 to December 31.
Forward Looking Statements
This MD&A contains certain statements, other than statements of historical fact that are forward-looking statements, which reflect the current view of the Company with respect to future events including corporate developments, financial performance and general economic conditions which may affect the Company. All statements other than statements of historical fact contained in this listing statement, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results,
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
performance or achievements expressed or implied by the forward-looking statements.
The words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward- looking statements include, among other things, statements about:
- The Company's ability to obtain additional financing;
- The accuracy of estimates regarding expenses, future revenues and capital requirements;
- The success and timing of planned preclinical studies and clinical trials;
- The ability of the Company to obtain and maintain regulatory approval of OTC products and any product candidates that may be developed, and the labeling under any approval obtained;
- Regulatory developments in Canada, USA and other countries;
- The performance of third-party manufacturers;
- Plans to develop and commercialize the Company's product candidates;
- The Company's ability to obtain and maintain intellectual property protection for product candidates;
- The successful development of sales and marketing capabilities;
- The potential markets for the Company's product candidates and the Company's ability to serve those markets;
- The rate and degree of market acceptance of any future products; and
- The loss of key scientific or management personnel.
Ocumetics relies on certain key expectations and assumptions in making the forecasts, projections, predictions or estimations set out in forward-looking information. These factors and assumptions are based on information available at the time that the forward-looking information is provided. These include, but are not limited to, expectations and assumptions concerning:
- The availability of capital to fund planned expenditures;
- The availability of critical materials and supplies;
- Prevailing regulatory, tax and environmental laws and regulations; and
- The ability to secure necessary personnel, equipment and services.
Undue reliance should not be placed on forward-looking information because a number of risks and factors may cause actual results to differ materially from those set out in such forward-looking information. These include:
- Incorrect assessments of the value of acquisitions, licenses and development programs;
- Technical, manufacturing and processing problems;
- Actions by governmental authorities, including increases in taxes;
- The availability of capital on acceptable terms;
- Fluctuations in foreign exchange, currency, or interest rates and stock market volatility;
- Failure to realize the anticipated benefits from licenses or acquisitions;
- The other factors specifically identified as risk factors in this MD&A and
- Potential labour unrest.
Readers are cautioned that the foregoing list of factors should not be construed as exhaustive. Further information relating to risks is included in this MD&A under Risks Related to the Business. Except as may be required by applicable law or stock exchange regulation, Ocumetics undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
should not place undue reliance on forward-looking statements. If Ocumetics does update one or more forward-looking statements, no inference should be drawn that additional updates will be made with respect to those or other forward-looking statements.
Management and Board of Director Responsibilities
Management (specifically the Company’s CEO and CFO) is responsible for the reliability and timeliness of information disclosed in this MD&A. In this regard, Management has implemented systems, controls and processes (“Systems”) to ensure that all information required for this MD&A is collected and communicated on an accurate and timely basis. As a small company, the current Systems consist of first-hand involvement of the CEO and CFO in all material transactions of the Company. In Management’s view, the Company’s Systems are sufficient for the Company to report reliable and timely information.
The Company’s Audit Committee is responsible for reviewing the Company’s interim and annual MD&A prior to release. The Company’s Board of Directors is responsible for approving the Company’s annual and interim MD&A prior to release.
Business Overview
Ocumetics is a Canadian research and product development company that specializes in adaptive lens designs. Ocumetics is in the preclinical study stage of development of an accommodating intraocular lens. The Ocumetics lens is an expandable intraocular lens that fits within the natural lens compartment of the eye with the objective to eliminate the need for corrective lenses, especially for people over 45 years old of age. It is intended that it will re-establish the natural kinetics of the eye muscles to facilitate the eye’s ability to shift focus effortlessly from distance to near and very near range.
The Company was incorporated on April 12, 2012 under the British Columbia Business Corporations Act and was continued to Alberta on August 3, 2021.
Products, Trademarks and Patents
Products
The Ocumetics accommodating intraocular lens (the “Ocumetics Lens”) is under development. When fully developed, it is intended to self-regulate to restore a natural geometric configuration to the lens capsule so that radial tension exerted by zonular ligaments can actuate curvature change. The Ocumetics Lens consists of proprietary self-adapting suspension systems that modulate curvature change.
Optical elements incorporated within the Ocumetics Lens typically possess negative or nominal partial pressure. At least one wall of these optical elements comprises a flexible optical interface that is fashioned to alter shape in a cohesive manner, generating high-resolution optical images throughout its entire range of motion. Similar to the diaphragm of a stethoscope, the optical interface is intended to respond immediately to minuscule changes of external force.
The Ocumetics Lens’ suspension systems are comprised of cushions that are designed to conform to unique parameters of each recipient’s eye. When ciliary muscles relax, during sleep or when the eye focuses upon distant objects, the optical interface is compressed into its high energy state by expansion of the suspension system. When zonular tension relaxes, the optical interface immediately converts to a lower energy state,
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
focusing the eye upon near objects. Kinetic energy transfer occurs almost exclusively within the optical interface as the Ocumetics Lens' suspension systems characteristically respond slowly to changes of external force. The result is expected to be an immediate response to accommodation without lag.
The proprietary suspension systems are designed such that they can be configured to induce variable prismatic effect in conjunction with curvature change. As the Ocumetics Lens shifts focus from distance to near, base-in prism is expected to increase progressively. The intended resultant effect of this unique capability is unparalleled ease for near-point focus.
Normal cycles of ciliary muscle contraction and relaxation are expected to tone these interactions so that comfortable binocular vision may engage immediately with minimal effort in unison with the contralateral eye. Aggregation of fibrotic matter within the suspension system are expected to actually improve the kinesis. Thus, the Ocumetics Lens is designed to initially self-customize to fit within each lens capsule and then proceed to auto-adapt for improved performance over time.
Components of the Ocumetics Lens are comprised of durable, pre-approved materials that demonstrate stability. Supple membranes are polymerized together to produce a composite Ocumetics Lens that compresses through a 3.0 mm incision, thereby minimizing surgically induced astigmatism. Prototypes have been dimensioned for a 12-diopter accommodation range in conjunction with 6-prism diopters of base-in prism. A replaceable anterior optical element is expected to provide easy access for lens updates.
Patents and Trademarks
As at July 31, 2020, the patents for the Ocumetics Lens technology were held by Ventura Holdings Ltd. ("Ventura"), which is wholly owned by Dr. Garth Webb. Ventura had, in turn, licensed the Ocumetics Lens technology to Ocumetics on an exclusive basis pursuant to the Amended and Restated License Agreement dated April 12, 2021 (the "License Agreement"). Ventura also held the registered wordmarks, "Bionic Lens" and "Ocumetics", which were licensed to Ocumetics under the License Agreement.
On January 28, 2021, the Company purchased all of the patents and related intellectual property, including the trademarks, from Ventura and terminated the License Agreement.
The World International Patent Office (WIPO) application for the Inflatable Ocumetics Lens/lens retainer was registered on August 13, 2007 with two supplemental submissions registered: one on November 5, 2007 and the final one on May 7, 2008. The patent was examined for Novelty, Inventive Step and Industrial Applicability. Patent claims 1-56 were accepted as valid in all categories.
The Inventive Step cited revolves around the process of inflating a lens retainer to apply pressure upon the posterior lens capsule of the eye to focus upon distant objects. This process is essential for bio-mimetic intraocular lens function and is the missing element of all contemporary accommodating lens designs. New patent applications disclosing improvements to this original concept have been registered internationally.
Historical Accomplishments
Since completing a Reverse Takeover transaction and going public in 2021, Ocumetics has assembled a world-class research and product development team (the "R&D Team"). The R&D Team consists of the following:
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
Dr. Garth Webb
Dr. Doyle Stulting
Biona SAPI de CV
Clinical Research Consultants, Inc.
Ami Plant
Founder and Chief Scientific Officer
Chief Medical Officer
Medical device prototype development partner
Regulatory and clinical consulting partner
Medical device manufacturing partner
On January 9, 2026, the Company announced that that it intended to form a Scientific Advisory Committee (SAC) to fill the role now being performed by a single Chief Medical Officer. In the result, the consulting agreement with the Company's current Chief Medical Officer, Dr. Doyle Stulting, will terminate effective April 6, 2026. On February 26, 2026, the Company announced the appointment of Dr. Ron Krueger, MD, MSE, to the SAC. Dr. Krueger is a globally recognized ophthalmologist, surgeon, and innovator in refractive and cataract surgery.
The R&D Team is supported by Dean Burns, President and CEO. Mr. Burns worked with Alcon Vision for 27 years, brings a wealth of intraocular lens development and commercialization experience to Ocumetics, and now leads the clinical trial and commercialization process for the Company.
In October 2021 the Company commenced the first phase of its preclinical trials related to the Ocumetics Lens technology. Since then, the R&D Team has completed all required studies, including cadaver studies, biocompatibility and animal studies and bench testing of the optical technologies, required to proceed with first-in human ("FIH") surgeries. On August 18, 2025, the Company reported the successful implantation of its groundbreaking Ocumetics Lens in human subjects. On October 8, 2025 and November 5, 2025, the Company reported encouraging results from the first Group of patients.
On February 3, 2026, the Company announced positive three-month postoperative results from Group 1 patients in its FIH clinical study of the Ocumetics Lens. The results validate the Company's core technology and represent a key clinical de-risking milestone as Ocumetics advances toward subsequent study phases.
The Group 1 data met or exceeded all predefined internal benchmarks for safety, lens delivery, and foundational distance visual performance - successfully achieving the primary objectives required to progress the clinical program.
In 2024 the Company closed two tranches of secured convertible debentures with a total face value principal amount of $4,000,000. The debentures were subject to an original issue discount of 6%, resulting in net proceeds to the Corporation of $3,760,000, less expenses incurred by the lenders in respect of the offering.
This financing provided the Company with sufficient cash to continue to prepare for and commence the FIH studies. Since completion of the financing, the Company completed the development of a novel lens injector system, announced a lens design freeze, manufactured Ocumetics Lenses for sterility testing and FIH surgeries, completed a number of critical regulatory steps and completed FIH surgeries for its first Group of patients.
A detailed list of significant milestones related to development of the Ocumetics Lens follows:
| Achievement | Press release date |
|---|---|
| Commenced pre-clinical studies | Oct 26, 2021 |
| Partnered with Bioana, a medical device development company | Jan 17, 2022 |
| Partnered with Clinical Research Consultants, regulatory experts | Feb 3, 2022 |
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
| Successfully completed cadaver donor eye surgeries | May 18, 2022 |
|---|---|
| Achieved 12 diopters of accommodation in bench tests | May 24, 2022 |
| Achieved 14 diopters of accommodation in bench tests | Aug 29, 2022 |
| Successfully completed animal studies and lens injector tests | Feb 13, 2023 |
| Commenced biocompatibility and animal studies | June 20, 2023 |
| Successfully completed biocompatibility animal studies | Dec 7, 2023 |
| Completed development of novel lens injector system | Aug 8, 2024 |
| Commenced Ocumetics Lens design enhancements | Nov 22, 2024 |
| Successfully achieved accommodative power target in lab testing | May 8, 2025 |
| Announced Ocumetics Lens design freeze | May 12, 2025 |
| Completed manufacturing of Ocumetics Lenses for use in its FIH study | May 14, 2025 |
| Submitted FIH clinical study protocol for approval | May 22, 2024 |
| Confirmed Mexico City as site for FIH study | June 2, 2024 |
| Completed virtual site initiation for FIH study | June 26, 2025 |
| Completed surgeon and staff training for FIH surgeries | July 9, 2025 |
| Received ethics committee approval to proceed with FIH surgeries | July 30, 2025 |
| Commenced patient recruitment for FIH clinical study | Aug 5, 2025 |
| Successful implantation of Ocumetics Lens in human subjects | Aug 18, 2025 |
| Reported one-month patient results | Oct 8 and Nov 5, 2025 |
| Optimized lens delivery system | Dec 9, 2025 |
| Reported positive 3-month patient results | February 3, 2026 |
Future Plans and Outlook
Current estimates are for the FIH study to involve approximately 30 patients, segmented into three patient groups. The Company completed its Group 1 FIH surgeries during Q3 2025. Group 2 and 3 surgeries are expected to be completed in 2026.
The study is expected to take approximately nine months to complete. Preliminary results of each patient group are expected to be available within 30-45 days of each surgical date.
Ocumetics will conduct extensive post-operative analysis for each patient group as part of the regulatory process:
- Twelve-month follow-up: The Ocumetics medical team will monitor each group of patients over a 12-month period to evaluate safety, efficacy and optical performance.
- Clinical trial reporting: Interim and final results will be compiled into comprehensive reports and submitted to regulatory bodies for review.
The Company will continue to provide shareholder updates by news releases as each step is accomplished.
Subsequent to submission of FIH study results, the Company expects to receive regulatory approval to proceed with clinical trials. Phase 1 of the Company's clinical trials is currently projected to commence in 2026. The Phase 1 through 3 clinical trials are planned to occur in approximately 16 different locations, including Canada, the United States, Europe and South America. Approximately 300 patients will have the Ocumetics Lens implanted. Clinical studies are expected to take approximately 36 months to complete.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
Selected Annual Financial Information
The financial information reported herein has been prepared in accordance with IFRS. The Company uses the Canadian dollar as its presentation currency. The following table represents selected financial information for the Company's year ended December 31, 2025 and 2024.
| Year ended | December 31, 2025 | December 31, 2024 |
|---|---|---|
| $ | $ | |
| Total revenue | - | - |
| Net loss for the period | (5,373,327) | (3,022,158) |
| Net loss per share, basic and diluted | (0.04) | (0.03) |
| Total assets | 1,904,670 | 2,323,180 |
| Current liabilities | 5,459,189 | 306,200 |
| Total long-term liabilities | 389,440 | 3,953,211 |
| Cash paid dividends per share | - | - |
Results of Operations
Year ended December 31, 2025 and 2024
| Year ended | December 31, 2025 | December 31, 2024 |
|---|---|---|
| $ | $ | |
| Expenses | ||
| Consulting fees | 939,452 | 1,003,261 |
| Research and development | 1,415,474 | 852,392 |
| Share-based compensation | 983,771 | 171,304 |
| Professional fees | 133,336 | 86,438 |
| Office and general | 84,887 | 53,566 |
| Depreciation and amortization | 149,373 | 134,304 |
| Marketing | 173,778 | (3,689) |
| Listing costs | 50,462 | 59,941 |
| Patent fees | 65,866 | 68,032 |
| Interest and accretion | 1,346,310 | 639,055 |
| Foreign exchange loss | 21,587 | 38,179 |
| Total expenses | 5,364,296 | 3,102,783 |
| Operating loss | (5,364,296) | (3,102,783) |
| Interest income | (9,031) | 43,625 |
| Loss before taxes | (5,373,327) | (3,059,158) |
| Deferred tax recovery | - | 37,000 |
| Net loss and comprehensive loss for the period | (5,373,327) | (3,022,158) |
An explanation of significant variances follows:
Consulting fees for the year ended December 31, 2025 were $939,452, compared to $1,003,261 for the year ended December 31, 2024. The decrease is due to the termination of a consulting contract during the year ended December 31, 2024.
Research and development costs for the year ended December 31, 2025 were $1,415,474, compared to
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
$852,392 for the year ended December 31, 2024. The increase is due to increased materials, supplies and clinical costs related to clinical trial preparations leading to first-in-human surgeries during the year ended December 31, 2025.
Share-based compensation costs for the year ended December 31, 2025 were $983,771, compared to $171,304 for the year ended December 31, 2024. The increase is due to option grants in the current period that vested immediately as well as the current period cost of 5,000,000 Restricted Share Units that were granted in 2025.
Professional fees for the year ended December 31, 2025 were $133,336, compared to $86,438 for the year ended December 31, 2024. The increase is due to an increase in legal fees incurred in the current period.
Office and general costs for the year ended December 31, 2025 were $84,887, compared to $53,566 for the year ended December 31, 2024. The increase is due to an increase in travel expenses incurred in the current period.
Depreciation and amortization expense for the year ended December 31, 2025 was $149,373, compared to $134,304 for the year ended December 31, 2024. The increase is due to additions to Intangible Assets during the current period.
Marketing costs for the year ended December 31, 2025 were $173,778, compared to negative $3,689 for the year ended December 31, 2024. The increase is due to implementing two new marketing contracts and attendance at several conferences in the current period.
Listing costs for the year ended December 31, 2025 were $50,462, compared to $59,941 for the year ended December 31, 2024. The decrease is due to a decrease in Transfer agent fees during the current period.
Patent fees for the year ended December 31, 2025 were $65,866, compared to $68,032 for the year ended December 31, 2024. This expense is consistent with the prior period.
Interest and accretion expense for the year ended December 31, 2025 was $1,346,310, compared to $639,055 for the year ended December 31, 2024. The increase is due to accrued interest and accretion recorded on $4 million of convertible debentures in the current period that were outstanding for only a portion of 2024.
Interest income for the year ended December 31, 2025 was negative $9,031, compared to $43,625 for the year ended December 31, 2024. The decrease is due to the reversal of an accrual recorded in Q1 2025.
The deferred tax recovery during the year ended December 31, 2024 relates to the issuance of convertible debentures.
Three months ended December 31, 2025 and 2024
| Three months ended | December 31, 2025 | December 31, 2024 |
|---|---|---|
| $ | $ | |
| Expenses | ||
| Consulting fees | 231,881 | 243,617 |
| Research and development | 259,116 | 230,689 |
| Share-based compensation | 922,807 | 32,120 |
| Professional fees | 40,577 | 6,213 |
| Office and general | 30,430 | 18,755 |
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
| Depreciation and amortization | 49,576 | 36,669 |
|---|---|---|
| Marketing | 58,975 | 2,240 |
| Listing costs | 15,059 | 25,767 |
| Patent fees | (252) | 577 |
| Interest and accretion | 378,759 | 306,669 |
| Foreign exchange loss | 3,157 | 8,336 |
| Total expenses | 1,990,085 | 911,652 |
| Operating loss | (1,990,085) | (911,652) |
| Interest income | - | 14,826 |
| Loss before taxes | (1,990,085) | (896,826) |
| Deferred tax recovery | - | 37,000 |
| Net loss and comprehensive loss for the period | (1,990,085) | (859,826) |
An explanation of significant variances follows:
Consulting fees for the three months ended December 31, 2025 were $231,881, compared to $243,617 for the three months ended December 31, 2024. The decrease is due to the termination of a consulting contract during the year ended December 31, 2025.
Research and development costs for the three months ended December 31, 2025 were $259,116, compared to $230,689 for the three months ended December 31, 2024. The increase is due to increased materials, supplies and clinical costs related to clinical trial preparations leading to first-in-human surgeries during the year ended December 31, 2025.
Share-based compensation costs for the three months ended December 31, 2025 were $922,807, compared to $32,120 for the three months ended December 31, 2024. The increase is due new options grants in the current period that vested immediately and the vested cost of 5,000,000 RSUs issued during the year.
Professional fees for the three months ended December 31, 2025 were $40,577, compared to $6,213 for the three months ended December 31, 2024. The increase is due to an increase in legal fees incurred in the current period.
Office and general costs for the three months ended December 31, 2025 were $30,430, compared to $18,755 for the three months ended December 31, 2024. The increase is due to an increase in travel expenses incurred in the current period.
Depreciation and amortization expense for the three months ended December 31, 2025 was $49,576, compared to $36,669 for the three months ended December 31, 2024. The increase is due to additions to Intangible Assets during the year ended December 31, 2025.
Marketing costs for the three months ended December 31, 2025 were $58,975, compared to $2,240 for the three months ended December 31, 2024. The increase is due to implementing two new marketing contracts during the year ended December 31, 2025 and attendance at conferences in the current period.
Listing costs for the three months ended December 31, 2025 were $15,059, compared to $25,767 for the three months ended December 31, 2024. The decrease is due to a decrease in Transfer agent fees during the current period.
Patent fees for the three months ended December 31, 2025 were negative $252, compared to $577 for the
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
three months ended December 31, 2024. The decrease is due to the reversal of an accrual recorded in Q3 2025.
Interest and accretion expense for the three months ended December 31, 2025 was $378,759, compared to $306,669 for the three months ended December 31, 2024. The increase is due to an increase in accrued interest and accretion recorded on $4 million of convertible debentures in the current period.
Interest income for the three months ended December 31, 2025 was $Nil, compared to $14,826 for the three months ended December 31, 2024. The decrease is due to the redemption of short-term investments during the year ended December 31, 2025.
The deferred tax recovery during the three months ended December 31, 2024 relates to the issuance of convertible debentures.
Quarterly operating results
| Three months ended | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 |
|---|---|---|---|---|
| Revenue | - | - | - | - |
| Net loss | (1,990,085) | (1,301,823) | (1,200,803) | (880,616) |
| Total assets | 1,904,670 | 1,632,718 | 1,107,751 | 1,783,721 |
| Basic and diluted loss per share | (0.01) | (0.01) | (0.01) | (0.01) |
| Three months ended | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 |
| Revenue | - | - | - | - |
| Net loss | (859,826) | (763,029) | (768,256) | (631,047) |
| Total assets | 2,323,180 | 2,785,374 | 3,389,314 | 947,391 |
| Basic and diluted loss per share | (0.01) | (0.01) | (0.01) | (0.01) |
Liquidity and Capital Resources
| Year ended | December 31, 2025 | December 31, 2024 |
|---|---|---|
| $ | $ | |
| Cash and cash equivalents | 464,044 | 195,186 |
| Other current assets* | 787,933 | 1,452,010 |
| Current liabilities | (5,459,189) | (306,200) |
| Net working capital | (4,207,212) | 1,340,996 |
| Add: Convertible debentures | 4,910,081 | - |
| Adjusted working capital | 702,869 | 1,340,996 |
| Cash used in operating activities | (3,365,648) | (2,430,062) |
| Cash provided by (used in) investing activities | 1,252,677 | (1,463,616) |
| Cash provided by financing activities | 2,381,829 | 3,853,035 |
| Net increase (decrease) in cash | 268,858 | (40,643) |
*Includes short-term investments, subscriptions receivable, goods and services tax receivable and prepaids.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
As at December 31, 2025, the Company had cash and cash equivalents of $464,044 and a working capital deficit of $4,207,212 as compared to a cash balance of $195,186 and a working capital surplus of $1,340,996 as at December 31, 2024.
The Convertible debentures mature on May 22, 2026 and June 19, 2026, resulting in a current liability classification at December 31, 2025. On February 10, 2026, the Company entered into a forbearance agreement with the holders of its secured convertible debentures (the "Debentures"). Pursuant to the forbearance agreement, the debentureholders agreed to forbear from demanding payment of the Debentures and from taking any steps to realize upon any security granted in respect of the Debentures until June 19, 2027 notwithstanding the maturity of the Debentures.
Net current liabilities at December 31, 2025, without including Convertible debentures payable of $4,910,081, was $549,108. Net working capital at December 31, 2025, without including Convertible debentures payable of $4,910,081, was $702,869.
For the year ended December 31, 2025, the Company had an increase in net cash of $268,858 versus a decrease of $40,643 for the year ended December 31, 2024. The difference in cash gained is primarily due to proceeds from convertible debentures, offset by the purchase of short-term investments, in the prior period, compared to the redemption of short-term investments and proceeds from the issuance of shares in the current period.
The Company's primary source of funding is by way of raising capital through the issuance of debt and equity to third party investors. Ongoing financing efforts are required to provide funds to complete preclinical and clinical trial studies as well as to meet existing monthly expenses, current liabilities and the upcoming maturity of convertible debentures in June 2027.
Convertible debenture financing completed in Q2 2024 and private placement funding completed in Q3 2025, provided sufficient funds for the Company to prepare for and complete Group 1 FIH surgeries in Q3 2025. The private placement completed in Q4 2025 provided sufficient funds to cover costs through early 2026. Additional funds are required to cover operating costs through 2026, including costs to complete Group 2 surgeries and to commence Phase 1 clinical trials.
Significant financings are planned over the next 3 years as the Company progresses with its clinical trials in multiple jurisdictions.
Although there is no certainty, management is of the opinion that additional funding for its projects and operations can be raised as needed. The Company is subject to a number of risks associated with the successful development of new products and the marketing and the conduct of its preclinical and clinical studies and their results. The Company will need to finance its research and development activities and its clinical studies. To achieve the objectives in its business plan, the Company plans to raise the necessary capital and to generate revenues. It is anticipated that the products developed by the Company will require approval from the FDA and equivalent organizations in other countries before their sale can be authorized. If the Company is unsuccessful in obtaining adequate financing in the future, research activities will be postponed until market conditions improve.
12 | Page
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
Outstanding Share Capital
(a) Authorized:
At December 31, 2025, the Company had the following authorized capital:
- Unlimited number of voting common shares
(b) Issued:
During the year ended December 31, 2024, the Company issued the following shares:
- On January 15, 2024, the Company completed a private placement of 1,301,875 units (“Units”) at a price of $0.32 per Unit for gross proceeds of $416,600. Each Unit consists of one common share in the share capital of the Company (“Common Share”) and one-half of one common share purchase warrant. Each whole warrant (“Warrant”) entitles the holder to purchase one additional Common Share at an exercise price of $0.64 for a period of two years from the date of issuance of the Warrant. The Company received $160,000 prior to December 31, 2023 for this private placement.
During the year ended December 31, 2025, the Company issued the following shares:
-
4,397,900 stock options were exercised at $0.125 per share for proceeds of $549,738.
-
On July 17, 2025, the Company completed a private placement of 3,212,462 units (“Units”) at a price of $0.35 per unit for aggregate gross proceeds of $1,124,362. Each Unit consists of one common share in the share capital of the Company (“Common Share”) and one-half of one common share purchase warrant. Each whole warrant (“Warrant”) entitles the holder to purchase one additional Common Share at an exercise price of $0.50 for a period of 24 months from the date of issuance of the Warrant.
In connection with their services related to the sale of Units, the Company paid $68,610 to Numus Capital Corp. (“Numus”) and issued warrants to Numus (“Numus Warrants”) entitling Numus to purchase up to an aggregate of 196,029 Common Shares at a price of $0.50 per share for a period of 24 months.
The Warrants and Numus Warrants are subject to an acceleration clause such that if the volume weighted average trading price of the Common Shares on the TSX Venture Exchange is at least $0.60 per Common Share for a period of 30 consecutive trading days, the expiry date of the Warrants may be accelerated by the Corporation to a date that is not less than 30 days after the date that notice of such acceleration is provided to the Warrant holders by way of a press release.
- On December 30, 2025, the Company completed a private placement of 1,706,383 units (“Units”) at a price of $0.60 per Unit (“Issue Price”) for aggregate proceeds of $1,023,830 (“Proceeds”). Each Unit consists of one common share in the share capital of the Company (“Common Share”) and one Common Share purchase warrant (“Warrant”). Each Warrant entitles the holder to purchase one additional Common Share at a price of $0.75 until December 30, 2028. At December 31, 2025, $694,210 of the proceeds were held in a lawyer’s trust account and were received by the Company on January 2, 2026.
13 | Page
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
In connection with the private placement, the Company paid an aggregate of $143,336 in commissions, fees and advisory fees, including cash commissions of $81,906 and $61,430 paid by the issuance of 102,382 Units at $0.60 per Unit ("Agent's Unit Fees"), with each Unit consisting of one Common Share and one Warrant exercisable at $0.75 per Common Share until December 31, 2028. The Company also issued 136,510 Common Share purchase warrants ("Agent's Warrants"), with each warrant entitling the holder thereof to acquire one Unit at $0.60 until December 30, 2028.
Warrants:
A continuity schedule of share purchase warrants outstanding is as follows:
| Number | Weighted Average Exercise Price ($) | |
|---|---|---|
| Balance, December 31, 2023 | 2,413,454 | 0.69 |
| Issued | 650,938 | 0.64 |
| Balance, December 31, 2024 | 3,064,392 | 0.68 |
| Issued | 3,747,535 | 0.63 |
| Expired | (2,413,454) | 0.69 |
| Balance, December 31, 2025 | 4,398,473 | 0.63 |
The fair value of the 650,938 share purchase warrants granted on January 15, 2024 was $63,282. The Company calculated the fair value of the 650,938 share purchase warrants using the Black-Scholes pricing model using the following assumptions:
| Year Ended December 31, 2024 | |
|---|---|
| Share-price | $0.35 |
| Risk-free interest rate | 3.79% |
| Expected volatility | 79% |
| Dividend yield | 0% |
| Expected life of each warrant granted | 2 years |
| Estimated forfeiture rate | 0% |
| Fair value per warrant | $0.10 |
The fair value of the 1,606,231 share purchase warrants granted on July 17, 2025 was $193,292. The Company calculated the fair value of the 1,606,231 share purchase warrants using the Black-Scholes pricing model using the following assumptions:
| Year Ended December 31, 2025 | |
|---|---|
| Share-price | $0.39 |
| Risk-free interest rate | 2.81% |
| Expected volatility | 68% |
| Dividend yield | 0% |
| Expected life of each warrant granted | 2 years |
| Estimated forfeiture rate | 0% |
| Fair value per warrant | $0.12 |
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
The fair value of the 196,029 Numus Warrants granted on July 17, 2025 was $23,590. The Company calculated the fair value of the 196,029 share purchase warrants using the Black-Scholes pricing model using the following assumptions:
| Year Ended December 31, 2025 | |
|---|---|
| Share-price | $0.39 |
| Risk-free interest rate | 2.81% |
| Expected volatility | 68% |
| Dividend yield | 0% |
| Expected life of each warrant granted | 2 years |
| Estimated forfeiture rate | 0% |
| Fair value per warrant | $0.12 |
The fair value of the 1,706,383 share purchase warrants granted on December 30, 2025 was $550,660. The Company calculated the fair value of the 1,706,383 share purchase warrants using the Black-Scholes pricing model using the following assumptions:
| Year Ended December 31, 2025 | |
|---|---|
| Share-price | $0.62 |
| Risk-free interest rate | 2.57% |
| Expected volatility | 86.48% |
| Dividend yield | 0% |
| Expected life of each warrant granted | 3 years |
| Estimated forfeiture rate | 0% |
| Fair value per warrant | $0.32 |
The fair value of the 136,510 Agent's Warrants granted on December 30, 2025 was $48,330. The Company calculated the fair value of the 136,510 Agent's Warrants using the Black-Scholes pricing model using the following assumptions:
| Year Ended December 31, 2025 | |
|---|---|
| Share-price | $0.62 |
| Risk-free interest rate | 2.57% |
| Expected volatility | 86.48% |
| Dividend yield | 0% |
| Expected life of each warrant granted | 3 years |
| Estimated forfeiture rate | 0% |
| Fair value per warrant | $0.35 |
The fair value of the 102,382 warrants associated with the Agent's Unit Fees ("Agent's Fee Warrants") granted on December 30, 2025 was $33,040. The Company calculated the fair value of the 102,382 Agent's Fee Warrants using the Black-Scholes pricing model using the following assumptions:
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
| Year Ended December 31, 2025 | |
|---|---|
| Share-price | $0.62 |
| Risk-free interest rate | 2.57% |
| Expected volatility | 86.48% |
| Dividend yield | 0% |
| Expected life of each warrant granted | 3 years |
| Estimated forfeiture rate | 0% |
| Fair value per warrant | $0.32 |
(c) Options:
The Company has adopted an incentive stock option plan in accordance with the policies of the Exchange (the "Stock Option Plan") which provides that the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Company non-transferable options to purchase common shares, provided that the number of common shares reserved for issuance under the Stock Option Plan shall not exceed ten percent (10%) of the issued and outstanding common shares. The Stock Option Plan provides that options shall be exercisable for the duration set out in the individual option agreements, which in no event shall exceed ten (10) years from the date such options are granted. In addition, the number of common shares reserved for issuance to any one person shall not exceed five percent (5%) of the issued and outstanding common shares and the number of common shares reserved for issuance to any one consultant will not exceed two percent (2%) of the issued and outstanding common shares. The Board of Directors determines the price per common share and the number of common shares which may be allocated to each director, officer, employee and consultant and all other terms and conditions of the option, subject to the rules of the Exchange.
A continuity schedule of share purchase options outstanding is as follows:
| Description | Number of Options | Weighted Average Exercise Price $ |
|---|---|---|
| Balance, December 31, 2023 | 10,157,117 | 0.167 |
| Forfeited | (541,317) | 0.340 |
| Balance, December 31, 2024 | 9,615,800 | 0.157 |
| Granted | 732,000 | 1.160 |
| Exercised | (4,397,900) | 0.125 |
| Balance, December 31, 2025 | 5,949,900 | 0.305 |
| Exercisable, December 31, 2025 | 5,629,900 | 0.304 |
As at December 31, 2025, the Company had the following outstanding share purchase options:
| Number of Options Outstanding | Number of Options Exercisable | Weighted Average Exercise Price ($) | Expiry date |
|---|---|---|---|
| 850,000 | 850,000 | 0.125 | April 12, 2026 |
| 2,767,900 | 2,767,900 | 0.125 | August 27, 2026 |
| 1,600,000 | 1,280,000 | 0.320 | June 12, 2028 |
| 732,000 | 732,000 | 1.160 | October 14, 2030 |
| 5,949,900 | 5,629,900 | 0.305 |
16 | Page
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
On October 15, 2025, the Company issued 732,000 incentive stock options to directors of the Company pursuant to the terms of the stock option plan of the Company. Each option entitles the holder thereof to purchase one common share in the capital of the Company, at an exercise price per common share of $1.16 for a period of five years. The stock options will vest immediately.
The Company estimated the fair value of the 732,000 incentive stock options granted on October 15, 2025 using the Black-Scholes pricing model using the following assumptions:
| Year Ended December 31, 2025 | |
|---|---|
| Share-price | $1.16 |
| Risk-free interest rate | 2.69% |
| Expected volatility | 89% |
| Dividend yield | 0% |
| Expected life of each option granted | 5 years |
| Estimated forfeiture rate | 0% |
| Fair value per option | $0.81 |
The Company recognized $671,262 of stock-based compensation expense related to stock options during the year ended December 31, 2025 (2024 - $171,304).
At December 31, 2025, the weighted average remaining contractual life of the outstanding options is 1.59 years (2024 - 1.76 years).
(d) Restricted Share Units:
The Company has adopted an incentive stock option plan in accordance with the policies of the Exchange (the "RSU Plan") which provides that the Board of Directors of the Company may from time to time, in its discretion, grant non-transferable restricted share units ("RSUs"). Each vested RSU shall entitle the holder to receive one common share in the share capital of the Company (each, a "Share"), provided that the total number of Shares that may be reserved for issuance from treasury in connection with the RSUs granted pursuant to the RSU Plan shall not exceed 11,976,797 Shares.
Unless the Company has obtained disinterested shareholder approval as provided for by the policies of the TSX Venture Exchange (the "Policies"), (a) the maximum number of Shares that are issuable pursuant to all Security Based Compensation (as defined by the Exchange) ("SBC") granted or issued to Insiders (as a group) must not exceed 10% of the issued and outstanding Shares of the Company at any point in time (the "Insider Limit"), (b) the maximum number of Shares that are issuable pursuant to all SBC granted or issued in any 12-month period to Insiders (as a group) must not exceed 10% of the issued and outstanding Shares, calculated as at the date any SBC is granted or issued to any Insider, (c) the maximum number of Shares issuable pursuant to SBC grants to any one person in any 12-month period must not exceed 5% of the issued and outstanding Shares, calculated on the date the SBC is granted or issued to the person; and (d) the maximum number of Shares issuable pursuant to SBC granted to any one consultant in any 12-month period must not exceed 2% of the issued and outstanding Shares, calculated on the date of grant or issuance.
On January 24, 2025, the Company issued 5,000,000 RSUs under the Company's RSU Plan to a company controlled by the President and Chief Executive Officer of the Company (the "Consultant"). The RSUs shall vest upon the achievement of certain performance milestones, up to a maximum of 5,000,000 RSUs, provided that in no event shall any RSU vest until one year after the date of grant. All non-vested RSUs shall expire on January 23, 2030, subject to earlier termination if the Consultant ceases to be an eligible participant under the RSU Plan. Each vested RSU shall entitle the Consultant to receive one Common
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
Share in the share capital of the Company.
The Company recognized $312,509 of stock-based compensation expense related to the RSUs during the year ended December 31, 2025 (2024 - $Nil).
As at December 31, 2025, the Company had 5,000,000 RSUs outstanding (December 31, 2024 - Nil).
(g) Loss per share
The calculation of weighted average shares outstanding for the diluted loss per share calculation excludes the impact of the options and warrants outstanding as at December 31, 2025 and December 31, 2024 as the effect is anti-dilutive.
Convertible Debentures
On May 22, 2024, the Company issued Tranche 1 of a non-brokered private placement of secured convertible debentures, with a face value of $3,000,000, (the "Tranche 1 Debentures") having an aggregate face value of up to $4,000,000 (the "Debentures"). The Tranche 1 Debentures were subject to an original issue discount of 6%, resulting in net proceeds to the Company of $2,820,000, less closing costs of $118,488. The Tranche 1 Debentures mature on May 22, 2026.
On June 19, 2024, the Company issued Tranche 2 of the Debentures (the "Tranche 2 Debentures") with a face value of $1,000,000. The Tranche 2 Debentures were subject to an original issue discount of 6%, resulting in net proceeds to the Company of $940,000, less closing costs of $39,496. The Tranche 2 Debentures mature on June 19, 2026.
On February 10, 2026, the Company entered into a forbearance agreement with the holders of its secured convertible debentures (the "Debentures"). Pursuant to the forbearance agreement, the debentureholders agreed to forbear from demanding payment of the Debentures and from taking any steps to realize upon any security granted in respect of the Debentures until June 19, 2027 notwithstanding the maturity of the Debentures (see Subsequent Event).
The Debentures bear interest at a rate of 18% per annum, compounded annually, and payable on maturity. The Company may prepay the indebtedness under the Debentures at any time upon ninety (90) days prior written notice, without penalty.
The Debentures are convertible, at the option of the Debenture holder, into common shares of the Company at a conversion price of $0.32 per share. Interest is convertible into common shares of the Company pursuant to shares for debt applications, from time to time, at the option of the Debenture holder. The Debentures are secured by a general security agreement on the personal property of the Company. The Debentures and the common shares issuable upon the conversion of the Debentures are subject to a four-month hold period.
The Debentures were determined to meet the definition of a compound financial instrument and the Debenture's embedded conversion feature was determined to meet the definition of an equity component. The debt component is valued at issuance at the present value (taking into account the credit risk of the Company) of the future cash flows of an instrument with the same characteristics (maturity, cash flows, security) but without any option for conversion or redemption in shares. The residual of the net proceeds from the issuance of the instrument are recorded as equity. The fair value of the debt component was recognized at $2,992,516 using a discount rate of 27%. The fair value of the conversion feature, being the residual amount was determined to be $636,233 and was recorded in contributed surplus on the statement of financial position. The total transaction cost was allocated to the debt component and the equity component of the convertible debenture on a pro-rata basis of $131,251 and $26,734 accordingly.
18 | Page
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
The liability portion of the Debentures was recorded at its amortized cost as at December 31, 2025 using an effective interest rate of 32%.
The following table represents a summary of the Company's debt and equity components of the Debentures:
| $ | |
|---|---|
| Gross proceeds | 4,000,000 |
| Less: 6% discount | (240,000) |
| Net proceeds | 3,760,000 |
| Conversion option (equity) | (636,233) |
| Closing costs related to convertible debentures | (131,251) |
| Prepayment option on convertible debentures | - |
| Host convertible debentures on recognition | 2,992,516 |
| Add: Interest accrued during the year | 428,055 |
| Add: Accretion of convertible debentures for the year | 178,674 |
| Convertible debentures at December 31, 2024 | 3,599,245 |
| Add: Interest accrued during the year | 797,050 |
| Add: Accretion of convertible debentures for the year | 513,786 |
| Convertible debentures at December 31, 2025 | 4,910,081 |
Off Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
Related Party Transactions and Balances
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
Key management compensation
The Company has identified its directors and certain senior officers of the Company, who have the authority and responsibility for planning, directing and controlling the activities of the Company, as key management personnel. All related party transactions were incurred in the normal course of operations and initially recorded at fair value.
| Year ended | December 31, 2025 | December 31, 2024 |
|---|---|---|
| $ | $ | |
| Consulting fees, Chief Executive Officer | 276,580 | 270,553 |
| Consulting fees, Chief Scientific Officer | 108,000 | 108,000 |
| Consulting fees, Chief Financial Officer (1) | 151,875 | 160,350 |
| Consulting fees, Chief Medical Officer | 336,072 | 326,458 |
| Consulting fees, Directors | 17,000 | 60,000 |
| Share-based compensation | 983,771 | 171,304 |
| 1,873,298 | 1,096,665 |
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
(1) In addition to the amount above, for the year ended December 31, 2025, accounting services in the amount of $57,800 were paid to a company controlled by a director and officer of the Company (2024 - $59,300).
In addition to the transactions above, the Company incurred legal fees in the amount of $135,610 for the year ended December 31, 2025 (2024 - $98,328) with a legal firm, one of whose partners is the spouse of a director and officer of the Company.
Summary of related party balances:
All amounts due to related parties are unsecured, non-interest bearing and have no fixed terms of repayment.
| Year ended | December 31, 2025 | December 31, 2024 |
|---|---|---|
| $ | $ | |
| Due to Ventura (Note 5) | 466,194 | 440,170 |
| Due to Chief Financial Officer * | 13,219 | 17,325 |
| Due to Director * | - | 5,000 |
| Due to CEO * | 32,537 | 31,614 |
| Due to Chief Medical Officer * | 13,837 | 28,951 |
| 525,787 | 523,060 |
- Included in accounts payable and accrued liabilities.
As at December 31, 2025, apart from the balance stated above, $56,874 (2024 - $8,034) is payable to a legal firm, one of whose partners is the spouse of a director and officer of the Company. These amounts are included in accounts payable and accrued liabilities.
As at December 31, 2025, $389,440 of the amount due to Ventura has been presented as non-current (2024 - $353,966) as management does not expect that Commercialization (Note 5) will take place within 12 months after the reporting period. The amount due represents the $500,000 promissory note, discounted at 9.59%, being a market rate of interest of similar debt on the date of issuance, which resulted in a capital contribution of $256,715 on the date of issuance. The loan is discounted over a period equivalent to the life of the key patent which expires on August 12, 2028. During the year ended December 31, 2025, accretion was recorded on the loan for $35,474 (2024 - $32,326).
Accounting Standards Issued But Not Yet Effective
A number of new standards, and amendments to standards and interpretations, are not yet effective for the period ended December 31, 2025, and have not been early adopted in preparing the Company's financial statements. These new standards, and amendments to standards and interpretations, are either not applicable or are not expected to have a significant impact on the Company's financial statements.
The Company is in the process of determining the impact of the following new and amended standards on its future financial statements:
i) The IASB has issued classification and measurement and disclosure amendments to IFRS 9 and IFRS 7 with an effective date for years beginning on or after January 1, 2026 with earlier application permitted. The amendments clarify the date of recognition and derecognition of some financial assets and liabilities and introduce a new exception for some financial liabilities settled through an electronic payment system. Other changes include a clarification of the requirements when assessing whether a financial asset meets the solely payments of principal and interest criteria and new disclosures for certain instruments with contractual terms that can change cash flows.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
ii) IFRS 18, Presentation and Disclosure in Financial Statements is a new standard that will provide new presentation and disclosure requirements and replace International Accounting Standard 1, Presentation of Financial Statements (IAS 1). IFRS 18 introduces changes to the structure of the income statement; provides required disclosures in financial statements for certain profit or loss performance measures that are reported outside an entity's financial statements; and provides enhanced principles on aggregation and disaggregation in financial statements. Many other existing principles in IAS 1 have been maintained. IFRS 18 is effective for years beginning on or after January 1, 2027, with earlier application permitted.
Material Accounting Policy Information
(a) Significant accounting estimates and judgments
The preparation of these financial statements in conformity with IFRS requires the Company's management to make judgments, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues, and expenses. Actual results may differ from these estimates.
Estimates, judgments, and underlying assumptions are reviewed on an ongoing basis and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.
Estimates
Critical estimates exercised in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are as follows:
Share-based payment transactions
The Company uses the Black-Scholes Option Pricing Model to determine the fair value of stock options and share purchase warrants issued. This model requires the input of subjective assumptions including expected share price volatility, interest rate, and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company's loss and equity reserves.
Taxes
Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made.
Useful lives of intangible assets
Following initial recognition, the Company carries the value of intangible assets at cost less accumulated amortization and any accumulated impairment losses. Amortization is recorded on a straight-line basis based upon management's estimate of the useful life and residual value. The estimates are reviewed at least annually and are updated if expectations change as a result of technical obsolescence or legal and other limits to use.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
Market interest rate
The Company makes estimates relating to the selection of an appropriate market rate of interest to discount non-interest or low-interest rate loans.
Convertible debentures and loans payable
The Company makes estimates relating to the selection of an appropriate market rate of interest to discount contractual interest and principal payments of the compound financial instrument. There are also estimates relating to the fair value of embedded features which requires determining the most appropriate valuation model and the most appropriate inputs to the valuation model.
Judgments
The key areas of judgment that have a significant risk of causing material adjustment to the amounts recognized in the financial statements are:
Going concern
The assessment of the Company's ability to continue as a going concern involves management judgement about the Company's resources and future prospects. In assessing whether this assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to, 12 months from the end of the reporting period. This assessment is based upon planned actions that may or may not occur for a number of reasons including the Company's own resources and external market conditions.
Impairment of intangible assets
The application of the Company's accounting policy for intangible assets requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions may change if new information becomes available. If, after expenditures are capitalized, events or changes in circumstances indicate that the carrying amount may not be recoverable, the amount capitalized is written off in profit or loss in the period the new information becomes available.
Upon retirement or disposal, the cost of the asset disposed of and the related accumulated amortization are removed from the accounts and any gain or loss is reflected in profit or loss.
Taxes
The Company recognizes deferred tax assets to the extent that it is probable that future taxable profits will be available to utilize the Company's deductible temporary differences which are based on management's judgment on the degree of future taxable profits. To the extent that future taxable profits differ significantly from the estimates impacts the amount of the deferred tax assets management judges is probable.
Short-term investments
Short-term investments consist of Canadian Guaranteed Investments which have been designated as fair value through profit and loss. As at each period end, short-term investments are recorded at fair value, with changes recognized in the statement of loss and comprehensive loss.
(b) Cash
Cash and cash equivalents are comprised of cash in banks and all short-term investments that are highly liquid in nature, cashable, and have an original maturity date of three months or less.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
(c) Equipment
Equipment is recorded at cost, net of accumulated depreciation and any accumulated impairment losses. Expenditures that materially increase the life of the assets are capitalized. Ordinary repairs and maintenance are expensed as incurred. Depreciation is calculated on a declining balance basis at 20% per annum which estimates the equipment's life.
The assets' residual values, useful lives and methods of depreciation are reviewed at each financial year-end and adjusted prospectively, if appropriate. An item of equipment is de-recognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying value of the asset) is include in loss and comprehensive loss in the year the asset is derecognized.
(d) Intangible assets
Intangible assets including intellectual property are measured at cost less accumulated amortization and accumulated impairment losses. Initial costs and subsequent costs that increase the expected future economic benefits incurred under the license agreement and intellectual property are capitalized and amortized from the date of capitalization on a straight-line basis over their estimated useful lives determined based on the expiry of the key patents underlying the intellectual property. Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment. If, after expenditures are capitalized, events or changes in circumstances indicate that the carrying amount may not be recoverable, the amount capitalized is written off in profit or loss in the period the new information becomes available.
Patents comprises patents which are in the application process and are pending the grant and registration of the patent. Amortization commences upon successful completion of the patent application, being the patent grant date.
Upon retirement or disposal, the cost of the asset disposed of and the related accumulated amortization are removed from the accounts and any gain or loss is reflected in profit or loss.
(e) Impairment of non-financial assets
The carrying amounts of the Company's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of loss and comprehensive loss.
The recoverable amount of an asset is the greater of an asset's fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount, however, not to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.
23 | Page
Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
(f) Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the respective instrument. At initial recognition, the Company measures a financial asset or a financial liability at its fair value plus or minus, in the case of a financial asset or a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or the financial liability.
Financial assets
The Company will classify financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss, based on its business model for managing the financial asset and the financial asset's contractual cash flow characteristics. The three categories are defined as follows:
Amortized cost - a financial asset is measured at amortized cost if both of the following conditions are met:
- the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company's share subscriptions receivable is measured at amortized cost.
Fair value through other comprehensive income ("FVTOCI") - financial assets are classified and measured at FVTOCI if they are held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. The Company does not have any financial assets classified as FVTOCI.
Fair value through profit or loss ("FVTPL") - any financial assets that are not held in one of the two business models mentioned are measured at FVTPL. The Company's cash and cash equivalents are classified as FVTPL.
When, and only when, the Company changes its business model for managing financial assets it must reclassify all affected financial assets.
Impairment
An 'expected credit loss' impairment model applies which requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset's original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period.
In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.
For the periods presented, the Company did not record any expected credit loss.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
Financial liabilities
The Company’s financial liabilities include accounts payable and accrued liabilities, promissory note, due to related parties and convertible debentures. The Company classifies its financial liabilities into one of two categories, depending on the purpose for which the asset was acquired. The Company’s accounting policy for each category is as follows:
FVTPL – This category comprises derivatives or liabilities acquired or incurred principally for the purpose of selling or repurchasing it in the near term. They are carried in the statements of financial position at fair value with changes in fair value recognized in the statements of loss and comprehensive loss. The Company does not have any financial liabilities measured at FVTPL.
Amortized cost – Financial liabilities that are not contingent consideration of an acquirer in a business combination, held for trading or designated as at FVTPL, are measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis. The Company’s accounts payable and accrued liabilities, promissory note, due to related parties and convertible debentures are classified at amortized cost.
After initial recognition, an entity cannot reclassify any financial liability.
(g) Foreign currency translation
The functional and reporting currency is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange in effect at the statement of financial position date. Non-monetary items are translated using the historical rate on the date of the transaction. Revenue and expenses are translated at average rates for the periods. Foreign exchange gains and losses are included in the statements of loss and comprehensive loss.
(h) Convertible debenture
The convertible debentures are compound financial instruments for accounting purposes and consist of a liability and an equity component. The host contract is a liability accounted for at its amortized cost; the conversion feature is accounted for as an equity component. The Company’s policy for accounting for individual components of convertible notes upon recognition is to discount the debt component using an estimated discount rate for a similar debt instrument without a conversion feature and allocating the residual value to the equity components.
(i) Taxes
Current tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in the statement of loss and comprehensive loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred income tax is provided using the statement of financial position method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
(j) Share-based payments
The grant date fair value of share-based payment awards granted to employees is recognized as stock-based compensation expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
Where equity instruments are granted to parties other than employees, they are recorded by reference to the fair value of the services received. If the fair value of the services received cannot be reliably estimated, the Company measures the services received by reference to the fair value of the equity instruments granted, measured at the date the counterparty renders service.
All equity-settled share-based payments are reflected in contributed surplus, unless exercised. Upon exercise, shares are issued from treasury and the amount reflected in contributed surplus is credited to share capital, adjusted for any consideration paid.
The Company may grant restricted share units ("RSUs") under its RSU plan.
The RSU's granted entitle the holder to the issuance of common shares upon vesting with terms determined by the Company's Board of Directors at the time of the grant. RSUs are accounted for as equity settled share-based payments and are valued using the share price on grant date. Expense is recognized over the vesting period. A forfeiture rate is estimated on the date of grant and is adjusted to reflect the actual number of awards that vest. Upon settlement, the value of RSUs initially recognized in reserves is reclassified to share capital.
(k) Share capital
Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company's common shares are classified as equity instruments. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(l) Loss per share
Basic loss per share is computed using the weighted average number of common shares outstanding during the period. The treasury stock method is used for the calculation of diluted loss per share, whereby all "in the money" stock options and share purchase warrants are assumed to have been exercised at the beginning of the period and the proceeds from their exercise are assumed to have been used to purchase common shares at the average market price during the period. When a loss is
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
incurred during the period, basic and diluted loss per share is the same as the exercise of stock options and share purchase warrants is considered to be anti-dilutive.
(m) Research and development costs
Research costs are expensed as incurred. Development expenditures on an individual project are recognized as an intangible asset when the Company can demonstrate:
- the technical feasibility of completing the intangible asset so that the asset will be available for use or sale
- its intention to complete and its ability and intention to use or sell the asset
- how the asset will generate future economic benefits
- the availability of resources to complete the asset
- the ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete, and the asset is available for use. It is amortized over the period of expected future benefit and is recorded in cost of sales. During the period of development, the asset is tested for impairment annually.
Capital Risk Management
The capital structure of the Company consists of all components of shareholders' equity. The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern, to provide an adequate return to shareholders, to meet external capital requirements on the Company's debt and credit facilities and preserve financial flexibility in order to benefit from potential opportunities that may arise.
The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issuances or by undertaking other activities as deemed appropriate under the specific circumstances.
The Company is not subject to externally imposed capital requirements. There has been no change in the Company's approach to capital management during the year ended December 31, 2025.
Risks Related to the Business
An investment in the Company is speculative and involves a high degree of risk. Accordingly, prospective investors should carefully consider the specific risk factors set out below, in addition to the other information contained in this MD&A, before making any decision to invest in the Company. The Directors consider the following risks and other factors to be the most significant for potential investors in the Company, but the risks listed do not necessarily comprise all those associated with an investment in the Company and are not set out in any particular order of priority. Additional risks and uncertainties not currently known to the Directors may also have an adverse effect on the Company's business. If any of the following risks actually occur, the Company's business, financial condition, capital resources, results or future operations could be materially adversely affected. In such a case, the price of the common shares could decline, and investors may lose all or part of their investment.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
Single Product
While the Company has several products in its development pipeline, including the industrial application of the Ocumetics Lens technology, currently the Company's sole technology that has commenced preclinical trials is the Ocumetics Lens. Therefore, the Company's current commercialization, financial and future stock value are based on the success of this single product. If the Ocumetics Lens is not commercially successful, there is a risk that the Company will be unable to meet its estimates and deliver value to shareholders.
Applicability of Technology
The Company's technology, even if it is successfully commercialized, will not be suitable for treatment of every vision problem. In particular, it cannot resolve, alone, vision problems such as cloudy corneas, eyes that have already had the natural lens removed (such as in cataract surgery), severe macular degeneration, severe genetic retinal diseases, torn or damaged optic nerves, or brain damage affecting any part of the visual system.
Competition
While the Company believes that the Ocumetics Lens offers greater promise than competing technology, the Company is aware that its competitors are constantly striving to improve their products. There is a risk that one or more of the Company's competitors could introduce a product that is more effective than, or comes to market earlier than, the Ocumetics Lens and therefore disrupts the Company's projections as to marketability and product demand. The business of the Company is subject to rapid technological changes. Failure to keep up with such changes may adversely affect the business of the Company. The Company is subject to the risks of companies operating in the medical and healthcare business. The market in which the Company competes is characterized by rapidly changing technology, evolving industry standards, frequent new service and product announcements, introductions and enhancements and changing customer demands.
Intellectual Property Risks
The Company could be adversely affected if it does not adequately protect its intellectual property rights. The Company regards its marks, rights, and trade secrets and other intellectual property rights as critical to its success. To protect its investments and the Company's rights in these various intellectual properties, it may rely on a combination of patents, trademark and copyright law, trade secret protection and confidentiality agreements and other contractual arrangements with its employees, clients, strategic partners, acquisition targets and others to protect proprietary rights. There can be no assurance that the steps taken by the Company to protect proprietary rights will be adequate or that third parties will not infringe or misappropriate the Company's copyrights, trademarks and similar proprietary rights, or that the Company will be able to detect unauthorized use and take appropriate steps to enforce rights. In addition, although the Company believes that its proprietary rights do not infringe on the intellectual property rights of others, there can be no assurance that other parties will not assert infringement claims against the Company. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources.
Commercial success of the Company will depend in part on not infringing upon the patents and proprietary rights of other parties and enforcing its own patents and proprietary rights against others. The research and development programs will be in highly competitive fields in which numerous third parties have issued patents and pending patent applications with claims closely related to the subject matter of the Company's programs. The Company is not currently aware of any litigation or other proceedings or claims by third parties that its technologies or methods infringe on their intellectual property.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
While it is the practice of the Company to undertake pre-filing searches and analyses of developing technologies, it cannot guarantee that it has identified every patent or patent application that may be relevant to the research, development, or commercialization of its products. Moreover, it cannot assure that third parties will not assert valid, erroneous, or frivolous patent infringement claims.
The Company will rely on trade secrets to protect technology where it does not believe patent protection is appropriate or obtainable. Trade secrets are difficult to protect. While commercially reasonable efforts to protect trade secrets will be used, strategic partners, employees, consultants, contractors or scientific and other advisors may unintentionally or willfully disclose information to competitors.
If the Company is not able to defend patents or trade secrets, then it will not be able to exclude competitors from developing or marketing competing products, and the Company may not generate enough revenue from product sales to justify the cost of development of products and to achieve or maintain profitability.
Clinical Trials and Regulatory Approval
The Company's ability to commercialize its technology is dependent upon the completion of successful clinical trials and the subsequent receipt of regulatory approvals in each jurisdiction in which it wishes to sell the technology. Ocumetics has not completed any clinical trials and has not received, any regulatory approvals to date.
Clinical trials for potential candidates will be expensive, difficult to design and implement, time-consuming, and their outcomes are uncertain. The timing and completion of clinical trials may be subject to significant delays relating to various causes, including but not limited to: inability to manufacture or obtain sufficient quantities of materials for use in clinical trials; delays arising from collaborative partnerships; delays in obtaining regulatory approvals to commence a study, or government intervention to suspend or terminate a study; delays, suspensions or termination of clinical trials by the applicable institutional review board or independent ethics board responsible for overseeing the study to protect research subjects; delays in identifying and reaching agreement on acceptable terms with prospective clinical trial sites; slow rates of patient recruitment and enrollment; uncertain dosing issues; inability or unwillingness of medical investigators to follow clinical protocols; variability in the number and types of subjects available for each study and resulting difficulties in identifying and enrolling subjects who meet trial eligibility criteria; scheduling conflicts; difficulty in maintaining contact with subjects after treatment, resulting in incomplete data; unforeseen safety issues or side effects; lack of efficacy during clinical trials; reliance on clinical research organizations to conduct clinical trials, which may not conduct such trials with good laboratory practices; or other regulatory delays.
While the Company believes that its clinical trials will be successful, there is no assurance that that will be the case. There can also be no assurance, regardless of the success of clinical trials, that regulatory approval will be forthcoming in any jurisdiction in which the Company applies for such approval.
Management and Key Personnel
The success of the Company depends on the continued ability to attract, retain, and motivate highly qualified management, clinical, and scientific personnel and to develop and maintain important relationships with leading academic institutions, companies, and thought leaders. Dean Burns, the Company's President and Chief Executive Officer, and Dr. Garth Webb, the Company's Chief Scientific Officer and inventor of the Ocumetics Lens and related technology, exercise significant control over the day-to-day affairs of the Company. The Company depends on Mr. Burns and Dr. Webb to engage with third parties and contractors to operate the business. If either Mr. Burns or Dr. Webb were to leave the Company or were otherwise unable
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
to perform their respective duties, the Company's business could fail, and shareholders could lose their investment. Ocumetics does not hold key man insurance for either Mr. Burns or Dr. Webb and does not intend to obtain such insurance in the near term.
Inability to Maintain Regulatory Standards
The Company has no track record that indicates its ability to meet and maintain stringent regulatory standards if so required. Failure to maintain a high level of regulatory approval could lead to failure of the Company's business.
Difficulty to Forecast
The Company must rely largely on its own market research to forecast sales as detailed forecasts are not generally obtainable from other sources at this early stage of the industry. A failure in the demand for its products to materialize as a result of competition, technological change or other factors could have a material adverse effect on the business, results of operations and financial condition of the Company.
Inability to Meet Demand
If the Ocumetics Lens achieves or exceeds the levels of success the Company has projected, there is a risk that the Company will be unable to meet that demand in a timely fashion. The Company's ability to do so depends upon the development of a strong production platform. If the Company does not do so, it could affect its market reputation and return to investors.
Insurance Risks
The business of the Company may not be insurable or insurance may not be purchased due to high costs. Should uninsured liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the Company.
Availability of Critical Materials, Supplies and other Resources
The current challenging economic climate may lead to challenges in accessing critical materials, supplies and human resources. The inability to access critical materials, supplies and human resources at competitive prices could lead to failure of the Company's business.
Liquidity and Financial Resources
Speculative Nature of Investment Risk
An investment in the common shares of the Company carries a high degree of risk and should be considered as a speculative investment by purchasers. The Company has limited cash reserves, a limited operating history, has not paid dividends, and is unlikely to pay dividends in the immediate or near future. The Company is in the development stage. Operations are not yet sufficiently established such that the Company can mitigate the risks associated with planned activities.
Limited Operating History
The Company has no present prospect of generating revenue from the sale of products. The Company is therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources and lack of revenues. There is no assurance that the Company will be successful in achieving a return on shareholders' investment and the likelihood of success must be considered in light of the early stage of operations.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
Negative Cash Flow for the Foreseeable Future
The Company has no history of earnings or cash flow from operations. The Company does not expect to generate material revenue or achieve self-sustaining operations for several years, if at all. To the extent that the Company has negative cash flow in future periods, the Company may need to allocate a portion of its cash reserves to fund such negative cash flow.
Insufficient Capital to Accomplish Business Objectives
The Company will require significant capital to accomplish its business objectives in the next several years. The Company currently has insufficient capital to accomplish its business objectives and there can be no assurances that sufficient capital will become available to complete the Company's business objectives on schedule or at all.
Access to Further Funding
The Company will need to continue to rely upon capital raising activities, such as private placements, debt and equity financings to fund its future operations, and the ability of the Company to continue as a going concern, realize its assets and discharge its liabilities in the normal course of business and continue with, or expand upon its development programs is contingent upon securing additional financing. The Company's ability to access the debt and equity markets when required will depend upon factors beyond its control, such as economic and political conditions that may affect the capital markets generally. Although the Company has been successful in raising funds to date, there can be no assurance that adequate funding will be available in the future. Should Management be unable to raise sufficient capital to fund its operations and growth there would be a material adverse effect on the Company's business, financial condition, results of operations, and its ability to continue as a going concern. The Company's financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets, liabilities and reported expenses should the Company be unable to continue as a going concern. These adjustments could be material.
Market Price
The market price of the Company's common shares may be subject to wide price fluctuations in response to many factors, including variations in the operating results of the Company, divergence in financial results from analysts' expectations, changes in the business prospects for the Company, general economic conditions, legislative changes, and other events and factors outside of the Company's control.
Dilution
The financial risk of the Company's future activities will be borne to a significant degree by purchasers of the common shares. If the Company issues common shares from its treasury for financing purposes, control of the Company may change and purchasers may suffer additional dilution.
General Market and Economic Risks
Economic Environment
The Company's operations could be affected by the economic context should the unemployment level, interest rates or inflation reach levels that influence consumer trends and consequently, impact the Company's future sales and profitability.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
Global Economy Risk
The ongoing economic problems and downturn of global capital markets has generally made the raising of capital by equity or debt financing more difficult. Access to financing has been negatively impacted by the ongoing global economic risks. As such, the Company is subject to liquidity risks in meeting its development and future operating cost requirements in instances where cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the Company's ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to the Company. If uncertain market conditions persist, the Company's ability to raise capital could be jeopardized, which could have an adverse impact on the Company's operations.
Currency Risk
The Company may have financial risk exposure to varying degrees relating to the currency of each of the countries where it operates and has financial risk exposure towards digital currencies. The level of the financial risk exposure related to a currency and exchange rate fluctuations will depend on the Company's ability to hedge such risk or use another protection mechanism.
Subsequent Event
On February 10, 2026, the Company entered into a forbearance agreement with the holders of its secured convertible debentures (the "Debentures"). Pursuant to the forbearance agreement, the debentureholders agreed to forbear from demanding payment of the Debentures and from taking any steps to realize upon any security granted in respect of the Debentures until June 19, 2027 notwithstanding the maturity of the Debentures. The Company may prepay the indebtedness under the Debentures at any time upon ninety (90) days prior written notice, without penalty.
Principal continues to be convertible at the option of the holder into common shares of the Company at a conversion price of $0.32 per share to and including the original maturity dates (May 22, 2026 and June 19, 2026). In consideration for the forbearance, the Company issued 9,153,277 share purchase warrants ("Warrants") to the debentureholders, each Warrant entitling the holder thereof to purchase one common share at an exercise price of $0.58 until June 19, 2027 (the "Expiry Date").
If the Debentures are repaid or converted in whole or in part prior to February 10, 2027, a percentage of the Warrants equal to the percentage of the amount of the indebtedness repaid or converted will be amended to the later of (a) one year from the date of issuance, and (b) 30 days from the date of the repayment or conversion. The Expiry Date of all other Warrants shall remain June 19, 2027.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
SCHEDULE “A”
OCUMETICS TECHNOLOGY CORP.
CORPORATE GOVERNANCE POLICY
CORPORATE GOVERNANCE DISCLOSURE (FORM 58-101F2)
- Board of Directors — Disclose how the board of directors (the “Board”) facilitates its exercise of independent supervision over management, including
(i) the identity of directors that are or, upon election, will be, independent, and Dr. J. Barton McRoberts, Robert J. Quinn, Michael Edwards and Raymond Marks are the independent directors of the Corporation.
(ii) the identity of directors who are not independent, and the basis for that determination. Dean E. Burns, Dr. Garth T. Webb and Roger M. Jewett are not independent as they are officers of the Corporation.
In determining whether a director is independent, the Corporation chiefly considers whether the director has a relationship which could, or could be perceived to, interfere with the director’s exercise of independent judgment.
-
Directorships — If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer.
-
The following current and proposed directors of the Corporation presently serve as directors of other reporting issuers as follows:
| Name | Name of Reporting Issuer | Exchange or Market |
|---|---|---|
| Robert J. Quinn | Hanstone Gold Corp. | TSXV |
| Hansco Capital Corp. | TSXV | |
| Constellation Capital Corp. | TSXV | |
| Roger M. Jewett | Guardian Exploration Inc. | TSXV |
| Constellation Capital Corp. | TSXV |
- Orientation and Continuing Education — Describe what steps, if any, the Board takes to orient new Board members, and describe any measures the board takes to provide continuing education for directors.
The Corporation has not developed an official orientation or training program for new directors as required, new directors will have the opportunity to become familiar with the Corporation by meeting with other directors and its officers and employees. Orientation activities will be tailored to the particular needs and expertise of each director and the overall needs of the Board.
- Ethical Business Conduct — Describe what steps, if any, the board takes to encourage and promote a culture of ethical business conduct.
The Corporation does not currently have a formal code of business conduct or policy in place for its
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
directors, officers, employees and consultants. The Board believes that the Corporation's size facilitates informal review of and discussions with employees and consultants. The Board monitors ethical conduct of the Corporation and ensures that it complies with applicable legal and regulatory requirements, such as those of relevant securities commissions and stock exchanges. The Board has found that the fiduciary duties placed on individual directors by the Corporation's governing corporate legislation and the common law, as well as the restrictions placed by applicable corporate legislation on the individual director's participation in decision of the Board in which the director has an interest, have been sufficient to ensure that the Board operates independently of management and in the best interests of the Corporation.
-
Nomination of Directors — Disclose what steps, if any, are taken to identify new candidates for Board nomination, including:
(i) who identifies new candidates, and
(ii) the process of identifying new candidates.
The Board has not appointed a nominating committee as the Board fulfills these functions. When the Board identifies the need to fill a position on the Board, the Board requests that current Directors forward potential candidates for consideration. -
Compensation — Disclose what steps, if any, are taken to determine compensation for the directors and CEO, including:
(i) who determines compensation; and
The Board of Directors sets the compensation received by the directors and executive officers.
(ii) the process of determining compensation.
Market comparisons as well as evaluation of similar positions in different industries in the same geography are the criteria used in determining compensation, the objective being to set compensation levels to attract and retain individuals of high calibre to serve as officers of the Corporation, to motivate their performance in order to achieve the Corporation's strategic objectives and to align the interests of executive officers with the long-term interests of the Shareholders, while at the same time preserving cash flows. The Board of Directors will set the compensation so as to be generally competitive with the compensation received by persons with similar qualifications and responsibilities who are engaged by other companies of corresponding size, stage of development, having similar assets, number of employees, market capitalization and profit margin. In setting such levels, the Board of Directors will rely primarily on their own experience and knowledge. -
Other Board Committees — If the Board has standing committees other than the audit and compensation identify the committees and describe their function.
At present, the Board has an audit committee and a compensation committee. -
Assessments — Disclose what steps, if any, that the Board takes to satisfy itself that the Board, its committees, and its individual directors are performing effectively.
The Board takes responsibility for monitoring and assessing its effectiveness and the performance of individual directors, its committees, including reviewing the Board's decision-making processes and the quality of information provided by management.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
SCHEDULE "B"
OCUMETICS TECHNOLOGY CORP.
AUDIT COMMITTEE CHARTER
-
Establishment of Audit Committee: The directors of the Corporation (the "Directors") hereby establish an audit committee (the "Audit Committee").
-
Membership: The membership of the Audit Committee shall be as follows:
(a) The Audit Committee shall be composed of three members or such greater number as the Directors may from time to time determine.
(b) The majority of the members of the Audit Committee shall be independent Directors.
(c) Each member of the Audit Committee shall be financially literate. For purposes hereof "financially literate" has the meaning set forth under NI 52-110 (as amended from time to time) and currently means the ability to read and understand a set of financial statements that present the breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can be reasonably be expected to be raised by the Corporation's financial statements.
(d) Members shall be appointed annually from among members of the Directors. A member of the Audit Committee shall ipso facto cease to be a member of the Audit Committee upon ceasing to be a Director of the Corporation. -
Oversight Responsibility: The external auditor is ultimately accountable to the Directors and the Audit Committee, as representatives of the shareholders and such shareholders representatives have the ultimate authority and responsibility to select, evaluate, and where appropriate, replace the external auditors (or to nominate the external auditors to be proposed for shareholder approval in any management information circular and proxy statement). The external auditor shall report directly to the Audit Committee and shall have the responsibilities as set forth herein.
-
Mandate: The Audit Committee shall have responsibility for overseeing:
(a) the accounting and financial reporting processes of the Corporation; and
(b) audits of the financial statements of the Corporation.
In addition to any other duties assigned to the Audit Committee by the Directors, from time to time, the role of the Audit Committee shall include meeting with the external auditor and the senior financial management of the Corporation to review all financial statements of the Corporation which require approval by the Directors, including year-end audited financial statements. Specifically, the Audit Committee shall have authority and responsibility for:
(a) reviewing the Corporation's financial statements, MD&A and earnings press releases before the information is publicly disclosed;
(b) overseeing the work of the external auditors engaged for purpose of preparing or issuing, an audit report or performing other audit, review or attest services for the Corporation, including the resolution of disagreements between management and the external auditors regarding financial reporting;
(c) reviewing annually and recommending to the Directors:
(i) the external auditors to be nominated for purposes of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation; and
(ii) the compensation of the external auditors;
(d) discussing with the external auditor:
(i) the scope of the audit, in particular their view of the quality of the Corporation's accounting principles as applied in the financials in terms of disclosure quality and evaluation methods, inclusive of the clarity of the Corporation's financial disclosure and reporting, degree of conservatism or aggressiveness of the Corporation's
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
(iii) accounting principles and underlying estimates and other significant decisions made by management in preparing the financial disclosure and reviewed by the auditors; significant changes in the Corporation’s accounting principles, practices or policies; and
(iii) new developments in accounting principles, reporting matters or industry practices which may materially affect the Corporation.
(e) reviewing with the external auditor and the Corporation’s senior financial management the results of the annual audit regarding:
(i) the financial statements;
(ii) MD&A and related financial disclosure contained in continuous disclosure documents;
(iii) significant changes, if any, to the initial audit plan;
(iv) accounting and reporting decisions relating to significant current year events and transactions;
(v) the management letter, if any, outlining the auditor’s findings and recommendations, together with management’s response, with respect to internal controls and accounting procedures; and
(vi) any other matters relating to the conduct of the audit, including such other matters which should be communicated to the Audit Committee under Canadian generally accepted auditing standards.
(f) reviewing and discussing with the Corporation’s senior financial management and, if requested by the Audit Committee, the external auditor:
(i) the interim financial statements;
(ii) the interim MD&A and
(iii) any other material matters relating to the interim financial statements, including, inter alia, any significant adjustments, management judgments or estimates, new or amended accounting policies;
(g) receipt from external auditor of a formal written statement delineating all relationships between the auditor and the Corporation and considering whether the advisory services performed by the external auditor during the course of the year have impacted their independence, and also ensuring that no relationship or services between ) the external auditor and the Corporation is in existence which may affect the objectivity and independence of the auditor or recommending appropriate action to ensure the independence of the external auditor;
(h) pre-approval of all non-audit services to be provided to the Corporation or its subsidiary entities by the external auditors or the external auditors of the Corporation’s subsidiary entities, unless such pre-approval is otherwise appropriately delegated or if appropriate specific policies and procedures for the engagement of non-audit services have been adopted by the Audit Committee;
(i) reviewing and discussing with the external auditors and senior financial management: the adequacy of procedures for review of disclosure of financial information extracted or derived from financial statements, other than the disclosure referred to in subparagraph (a) above;
(j) establishing and reviewing of procedures for:
(i) receipt, retention and treatment of complaints received by the Corporation and its subsidiary entities regarding internal accounting controls, or auditing matters; confidential;
(ii) anonymous submission by employees of the Corporation and its subsidiary entities
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
of concerns regarding questionable accounting or auditing matters; and
(iii) hiring policies regarding employees and former employees of present and former external auditors of the Corporation and its subsidiary entities;
(k) reviewing with the external auditor, the adequacy of management’s internal control over financial reporting relating to financial information and management information systems and inquiring of management and the external auditor about significant risks and exposures to the Corporation that may have a material adverse impact on the Corporation’s financial statements, and inquiring of the external auditor as to the efforts of management to mitigate such risks and exposures; and
(1) reviewing and/or considering that, with regard to the previous fiscal year,
(i) management has reviewed the Corporation’s audited financial statements with the Audit Committee, including a discussion of the quality of the accounting principles as applied and significant judgments affecting the financial statements;
(ii) the external auditors and the Audit Committee have discussed the external auditors’ judgments of the quality of the accounting principles applied and the type of judgments made with respect to the Corporation’s financial statements;
(iii) the Audit Committee, on its own (without management or the external auditors present), has considered and discussed all the information disclosed to the Audit Committee from the Corporation’s management and the external auditor; and
(iv) in reliance on review and discussions conducted with senior financial management and the external auditors, the Audit Committee believes that the Corporation’s financial statements are fairly presented in conformity with the with Canadian Generally Accepted Accounting Principles (GAAP) in all material respects and that the financial statements fairly reflect the financial condition of the Corporation.
- Administrative Matters: The following general provisions shall have application to the Audit Committee:
(a) A quorum of the Audit Committee shall be the attendance of a majority of the members thereof. No business may be transacted by the Audit Committee except at a meeting of its members at which a quorum of the Audit Committee is present or by a resolution in writing signed by all the members of the Audit Committee.
(b) Any member of the Audit Committee may be removed or replaced at any time by resolution of the Directors of the Corporation. If and whenever a vacancy shall exist on the Audit Committee, the remaining members may exercise all its powers so long as a quorum remains. Subject to the foregoing, each member of the Audit Committee shall hold such office until the close of the annual meeting of shareholders next following the date of appointment as a member of the Audit Committee or until a successor is duly appointed.
(c) The Audit Committee may invite such Directors, directors, officers and employees of the Corporation or affiliates thereof as it may see fit from time to time to attend at meetings of the Audit Committee and to assist thereat in the discussion of matters being considered by the Audit Committee. The independent auditor is to appear before the Audit Committee when requested to do so by the Audit Committee.
(d) The time and place for the Audit Committee meetings, the calling and the procedure at such meetings shall be determined by the Audit Committee having regard to the Articles and By-Laws of the Corporation.
(e) The Chair shall preside at all meetings of the Audit Committee and shall have a second and deciding vote in the event of a tie. In the absence of the Chair, the other members of the Audit Committee shall appoint a representative amongst them to act as Chair for that particular meeting.
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Ocumetics Technology Corp.
Management's Discussion and Analysis
For the Years Ended December 31, 2025 and 2024
(f) Notice of meetings of the Audit Committee may be given to the independent auditor and shall be given in respect of meetings relating to the annual audited financial statements. The independent auditor has the right to appear before and to be heard at any meeting of the Audit Committee. Upon the request of the independent auditor, the Chair of the Audit Committee shall convene a meeting of the Audit Committee to consider any matters which the external auditor believes should be brought to the attention of the Directors or shareholders of the Corporation.
(g) The Audit Committee shall report to the Directors of the Corporation on such matters and questions relating to the financial position of the Corporation or any affiliates of the Corporation as the Directors of the Corporation may from time to time refer to the Audit Committee.
(h) The members of the Audit Committee shall, for the purpose of performing their duties, have the right to inspect all the books and records of the Corporation and its affiliates, and to discuss such books and records that are in any way related to the financial position of the Corporation with the Directors, directors, officers, employees and independent auditor of the Corporation and its affiliates.
(i) Minutes of the Audit Committee meetings shall be recorded and maintained. The Chair of the Audit Committee will report to the Directors on the activities of the Audit Committee and/or the minutes of the Audit Committee meetings will be promptly circulated to the Directors or otherwise made available at the next meeting of Directors.
(j) The Audit Committee shall, upon the approval of the Directors, adopt a formal written charter, which sets out the Audit Committee’s responsibilities, the way they should be implemented and any other requirement such as membership and structure of the Audit Committee. The Audit Committee shall review and reassess the adequacy of the charter on an annual basis.
(k) The Audit Committee shall ensure and/or consider that, with regard to the previous fiscal year,
(i) management has reviewed the Corporation’s audited financial statements with the Audit Committee, including a discussion of the quality of the accounting principles as applied and significant judgments affecting the financial statements;
(ii) the external auditor and the Audit Committee have discussed the independent auditor’s judgments of the quality of the accounting principles applied and the type of judgments made with respect to the Corporation’s and/or the Corporation’s financial statements;
(iii) the Audit Committee, on its own (without management or the independent auditors present), has considered and discussed all the information disclosed to the Audit Committee from the Corporation’s management and the external auditor; and
(iv) in reliance on review and discussions conducted with management and outside auditors, the Audit Committee believes that the Corporation’s financial statements are fairly presented in conformity with the with Canadian Generally Accepted Accounting Principles (GAAP) in all material respects.
(l) The Audit Committee shall have the authority to:
(i) engage independent counsel and other advisors or consultants as it determines necessary to carry out its duties;
(ii) set and pay the compensation for any advisors employed by the Audit Committee; and
(iii) communicate directly with the internal (if any) and external auditors and qualified reserves evaluators or auditors.
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