Samurai Capital Corp. — Management Reports 2026

Apr 25, 2026

A.C.L. Construction Ltd. f/k/a Samurai Capital Corp.

Management Discussion & Analysis
For the three- and nine-months ended
February 28, 2026 and 2025

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A.C.L. Construction Ltd.
Management Discussion and Analysis
For three- and nine-months ended February 28, 2026

This Management's Discussion and Analysis ("MD&A") should be read in conjunction with the unaudited condensed interim financial statements for the three- and nine-months ended February 28, 2026 and the audited annual financial statements (the "Annual Financial Statements") of A.C.L. Construction Ltd. ("ACL" or the "Company") for the year ended May 31, 2025 and related notes thereto which have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All figures are in Canadian dollars unless otherwise noted. This MD&A has been prepared as of April 24, 2026.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This MD&A contains forward-looking statements about the Company's objectives, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects, opportunities, and legal and regulatory matters. Specific forward-looking statements in this MD&A include, but are not limited to, statements with respect to the Company's anticipated future results, events, plans, strategic initiatives, future liquidity, and planned capital investments, including the steps involved to realize such opportunities and the timeline in which such opportunities may be realized.

Forward-looking statements are typically identified by words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive", "will", "may", "maintain", "achieve", "grow", "should" and similar expressions, as they relate to the Company and its management. Forward-looking statements reflect the Company's current estimates, beliefs and assumptions, which are based on management's perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. The Company's expectation of operating and financial performance is based on certain assumptions including but not limited to assumptions about operational growth, anticipated cost savings, operating efficiencies, anticipated benefits from strategic initiatives, future liquidity, and planned capital investments. The Company's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive, and other uncertainties and contingencies regarding future events and as such, are subject to change. There is no assurance that such estimates, beliefs and assumptions will prove to be correct.

The forward-looking statements made herein are subject to a variety of risk factors and uncertainties, many of which are beyond the Company's control, which could cause actual events or results to differ materially and adversely from those reflected in the forward-looking statements. Readers are cautioned that forward-looking statements are not guarantees of future performance.

The Company's actual results, programs, and financial position could differ materially from those expressed in or implied by the forward-looking statements made herein, and accordingly, no assurance can be given that the events anticipated by the forward-looking statements will transpire or occur, or that, if any of them do so, what benefits the Company will derive therefrom. The forward-looking statements made herein are made as of the date of this MD&A unless otherwise stated and are expressly qualified by this cautionary statement. The Company does not undertake any obligation to publicly update or revise any forward-looking statements except as expressly required by applicable securities laws.

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COMPANY OVERVIEW AND OVERALL PERFORMANCE

Samurai Capital Corp. ("Samurai") was incorporated under the laws of British Columbia on December 17, 2020. On February 18, 2026, Samurai completed its qualifying transaction (the "QT") with A.C.L. Construction Ltd. ("Old ACL") within the meaning of TSX Venture Exchange ("TSXV") Policy 2.4 – Capital Pool Companies. Following completion of the QT, Samurai changed its name to A.C.L. Construction Ltd. (the "Company"). Effective February 23, 2026, the common shares of the Company commenced trading on the TSXV under the symbol "ACL".

Separately, effective June 1, 2024, Old ACL completed an amalgamation transaction with other entities (the "2024 Amalgamation"), following which the continuing corporation carried on business as A.C.L. Construction Ltd. Effective March 11, 2026, the Company's records and registration office was changed to Suite 3606-833 Seymour Street, Vancouver, BC V6B 0G4.

On February 18, 2026, Samurai completed its QT with Old ACL. The QT was structured as a business combination transaction completed by way of a triangular amalgamation under the Business Corporations Act (British Columbia) involving Old ACL and 1578189 B.C. Ltd., a wholly-owned subsidiary of Samurai ("Subco"), following which the amalgamated entity became a wholly-owned subsidiary ("Amalco") of Samurai (the "Resulting Issuer").

Each common share in the capital of Samurai (the "Samurai Shares") that was outstanding immediately prior to the QT was converted into one half (1/2) issued and fully paid and non-assessable common share in the share capital of the Resulting Issuer (a "Resulting Issuer Share") at a deemed price of $0.30 per Resulting Issuer Share (the "Samurai Exchange Ratio"). Each common share in the capital of Old ACL (an "Old ACL Share") that was outstanding immediately prior to the QT was converted into one (1) issued and fully paid and non-assessable Resulting Issuer Shares at a deemed price of $0.30 per Resulting Issuer Share (the "Old ACL Exchange Ratio"). As a result of the QT, the former holders of Samurai Shares held, in the aggregate, 3,700,000 Resulting Issuer Shares representing 5.0% of the outstanding Resulting Issuer Shares and the former holders of Old ACL Shares held, in the aggregate, 69,822,074 Resulting Issuer Shares representing approximately 95.0% of the outstanding Resulting Issuer Shares. Immediately following the QT, Samurai changed its name to A.C.L. Construction Ltd. and Amalco carried on as 1578189 B.C. Ltd.

On February 13, 2026, Old ACL completed a non-brokered private placement of 10,306,074 subscription receipts for aggregate gross proceeds of $3,091,822 (the "Concurrent Financing"). Upon satisfaction or waiver of the applicable release conditions, each subscription receipt entitled the holder to receive one (1) common share of the Resulting Issuer and one (1) warrant (each, a "Warrant"). Each Warrant entitles the holder to purchase one (1) additional common share of the Resulting Issuer at an exercise price of $0.50 per share until February 13, 2029.

In August 2025, the Company sold assets classified as held for sale (see note 6 of the Financial Statements) for net proceeds of the Company of approximately $1.5 million, of which approximately $1.1 million of the proceeds were utilized to repay the BDC Term Loan in full (see note 13 of the financial statements). The Company expects such transactions to provide additional liquidity to the Company in the form of lower ongoing debt service, allowing the Company to continue to utilize its resources in its operations.

On April 6, 2025, Samurai announced that the TSXV had provided conditional acceptance of the proposed QT (as later defined).

On December 6, 2024, the Company issued 1,816,000 Common Shares in settlement of the secured convertible debenture agreement entered into on May 31, 2024.

On October 31, 2024, the Company granted 1,600,000 stock options to an officer, employees and consultant. Each stock option permits the optionee an option to purchase one (1) common share of the Company at an exercise price of $0.10 per share for a period of ten (10) years from the date in which the options were granted.

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On September 27, 2024, the Company granted a total of 5,000,000 stock options to John McPherson and Thomas Hall. Each stock option permits the optionee an option to purchase one (1) common share of the Company at an exercise price of $0.10 per share for a period of ten (10) years from the date in which the options were granted.

On August 19, 2024 the Company entered into a non-binding letter of intent with Samurai, a Capital Pool Company as defined by TSXV Policy 2.4. The principal business of Samurai is the identification and evaluation of a Qualifying Transaction ("QT") and once identified or evaluated, to negotiate an acquisition or participation in a business subject to receipt of shareholder approval, if required, and acceptance by regulatory authorities. Upon closing of the QT, the Company's shares were listed on the TSXV as a Tier 2 issuer.

On July 23, 2024, the Company: (i) completed a financing in which the Company issued 3,750,000 Class A Common Shares upon receiving financing totaling $375,000; and (ii) issued 950,000 Class A Common Shares in consideration of past services received by the Company valued at a total of $95,000.

Effective June 1, 2024, the Company amalgamated with A.C.L. Construction Ltd., Aspen Falls Holdings Ltd, and TNTS Enterprises Ltd. to complete the 2024 Amalgamation and form A.C.L. Construction Ltd. Immediately following the 2024 Amalgamation, the Company's share capital consisted of 53,000,000 Class A Common Shares.

The Company continues to adjust its operating processes with the goal of sustaining growth and driving profitability. Improvements in reducing construction related costs has led to favourable performance since such changes have been and continue to be made, including a refined strategic process of identifying and subsequently bidding on new projects. Management has noted positive trends in new projects for tender, including increases in the federal and provincial capital roads, mines and others, as well as increases within the oil & gas industries, from new construction to fill pipelines to the west coast and remediation and reclamations on older wells within the Orphan well programs. Additionally growth has been observed within local infrastructure, lot construction, land developments, and underground city services. The Company has noted increased competition in addition to compliance with Indigenous Participation Plan requirements during the current year has led to an overall decrease in the yield related to bid projects. However, we anticipate seeing continued growth within the transportation side of the business in particular. The Company has developed strong relationships with First Nations and Metis communities, which have resulted in economic synergies with First Nations and Metis communities in Western Canada. ACL intends to continue to develop economical and mutual agreements and joint ventures or other similar arrangements that sustain existing relationships, build new relationships, long term goals and future resilience. As the Company intends to focus a large component of its operations on public and private sector infrastructure projects, as well as spur growth from provincial and municipal governments, the Company believes these positive relationships are essential to the Company's continued future success.

As a result of the Company's ongoing cash requirements, several of the Company's long-term payables have been restructured such that the payments are lower during the months of May and June when the Company's liquidity is historically lower than other months of the year.

Outside of the items disclosed in the Contractual Obligations section of this MD&A and Proposed Transactions, the Company does not have any long-term financial commitments.

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Three months ended February 28, 2026 and 2025

During the three months ended February 28, 2026, the Company recorded a net and comprehensive loss of $2.5 million, or $(0.04) per share, compared to net and comprehensive income of $0.1 million, or $0.00 per share, during the three months ended February 28, 2025:

Three months ended February 28,	2026	2025	Change
Revenue	$ 1,077,917	$ 2,991,220	$ (1,913,303)
Cost of revenue	(1,289,526)	(1,924,596)	635,070
Gross (loss) profit	(211,609)	1,066,624	(1,278,233)
Operating expenses	(683,249)	(684,937)	1,688
Finance and other costs	(1,625,662)	(254,792)	(1,370,870)
Net and comprehensive (loss) income	$ (2,520,520)	$ 126,895	$ (2,647,415)

The increase in net loss of $2.6 million during the three months ended February 28, 2026 compared to the prior year was primarily a result of the following:

• Revenue: Revenue during the three months ended February 28, 2026 was $1.1 million, which represents a decrease of $1.9 million or 64% compared to revenue of $3.0 million during the three months ended February 28, 2025. The decrease in revenue in the current year compared to the prior year was mainly a result of the deferral of major projects in both the public and private sectors. As a result, the Company noted a decrease in projects available for tender which led to a significant decrease in revenue compared to the prior year.
• Cost of revenue: Cost of revenue during the three months ended February 28, 2026 was $1.3 million and represents a decrease of $0.6 million or 33% compared to cost of revenue of $1.9 million during the three months ended February 28, 2025. The decrease in cost of revenue in the current period compared to the same period in the prior year was primarily the result of the decreased revenue during the current year, offset by increased one-time repair and maintenance costs required to sustain operations and increased short-term rentals as part of a shift in the Company's strategy in which the Company seeks short-term rentals for equipment required to complete projects in which there is no foreseeable future use, compared to prior years in which the Company entered into longer-term lease arrangements. As a result, the Company experienced a gross loss in the current year compared to a gross profit during the prior year and its gross profit percentage (see "Non-IFRS measures") weakened to a gross loss percentage of 19.6% during the three months ended February 28, 2026 compared to gross profit percentage of 35.7% during the same period in the prior year.
• Operating expenses: Operating expenses during the three months ended February 28, 2026 were $0.7 million and remained flat on a year-over-year basis with operating expenses of $0.7 million during the three months ended February 28, 2025.
• Finance and other costs: Finance and other costs during the three months ended February 28, 2026 were $1.6 million and represent an increase of $1.3 million, or approximately 538%, compared to finance and other costs of $0.3 million during the three months ended February 28, 2025. The increase in the current period compared to the same period in the prior year is mainly the result of listing expenses of $1.5 million associated with the QT, of which $1.2 million is a non-cash item.

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Nine months ended February 28, 2026 and 2025

During the nine months ended February 28, 2026, the Company recorded a net and comprehensive loss of $2.5 million, or $(0.04) per share, compared to net and comprehensive income of $0.2 million, or $0.00 per share, during the nine months ended February 28, 2025. Set out below is a summary of the financial results for the nine months ended February 28, 2026 compared to the nine months ended February 28, 2025:

Nine months ended February 28,	2026	2025	Change
Revenue	$ 9,422,371	$ 14,326,917	$ (4,904,546)
Cost of revenue	(7,465,199)	(10,671,725)	3,206,526
Gross profit	1,957,172	3,655,192	(1,698,020)
Operating expenses	(2,014,608)	(2,689,005)	674,397
Finance and other costs	(2,414,884)	(771,749)	(1,643,135)
Net and comprehensive (loss) income	$ (2,472,320)	$ 194,438	$ (2,666,758)

The increase in net loss of $2.7 million during the nine months ended February 28, 2026 compared to the prior year was a result of the following:

• Revenue: Revenue during the nine months ended February 28, 2026 was $9.4 million, which represents a decrease of $4.9 million or 34% compared to revenue of $14.3 million during the nine months ended February 28, 2025. The decrease in revenue in the current year compared to the prior year was the result of the deferral of major projects in both the public and private sectors, during the current quarter. As a result, the Company noted a decrease in projects available for tender which led to a significant decrease in revenue compared to the prior year.
• Cost of revenue: Cost of revenue during the nine months ended February 28, 2026 was $7.5 million and represents a decrease of $3.2 million or 30% compared to cost of revenue of $10.7 million during the nine months ended February 28, 2025. The decrease in cost of revenue in the current period compared to the same period in the prior year was primarily the result of the decreased revenue during the current year, offset by increased one-time repair and maintenance costs required to sustain operations and increased short-term rentals as part of a shift in the Company's strategy in which the Company seeks short-term rentals for equipment required to complete projects in which there is no foreseeable future use, compared to prior years in which the Company entered into longer-term lease arrangements. As a result, the Company's gross profit was decreased on a year-over-year basis and its gross profit percentage (see "Non-IFRS measures") and was 20.8% during the nine months ended February 28, 2026 compared to 25.5% during the same period in the prior year.
• Operating expenses: Operating expenses during the nine months ended February 28, 2026 were $2.0 million and represent a decrease of $0.7 million or 25% compared to operating expenses of $2.7 million during the nine months ended February 28, 2025. The decrease in operating expenses in the current year was mainly the timing of prior year transactions relating to a bid bond for a major project as well as a non-cash charges of approximately $0.3 million associated with 6.6 million stock options issued to directors, officers, employees and consultants of the Company and $0.1 million associated with the payment of 950,000 common shares of the Company to consultants.
• Finance and other costs: Finance and other costs during the nine months ended February 28, 2026 were $2.4 million and represent an increase of $1.6 million or 213% compared to finance and other costs of $0.8 million during the nine months ended February 28, 2025. The increase in the current period compared to the same period in the prior year is mainly the result of listing expenses of $1.5 million associated with the QT, of which $1.2 million is a non-cash item.

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SUMMARY OF QUARTERLY RESULTS

Three months ended	February 28, 2026	November 30, 2025	August 31, 2025
Revenue	$ 1,077,917	$ 4,827,772	$ 3,516,682
Net and comprehensive (loss) income	(2,520,520)	(426,229)	474,428
(Loss) income per share - basic	(0.04)	(0.00)	0.01
(Loss) income per share - diluted	(0.04)	(0.00)	0.01
Three months ended	May 31, 2025	February 28, 2025	November 30, 2024
Revenue	$ 3,348,875	$ 2,991,220	$ 4,347,435
Net and comprehensive (loss) income	(1,398,427)	126,895	(200,225)
(Loss) income per share - basic	(0.02)	0.00	(0.00)
(Loss) income per share - diluted	(0.02)	0.00	(0.00)

The Company operates in geographic locations which result in seasonal fluctuations in the Company's revenue and profitability experiencing more favourable results during the summer in the northern hemisphere and the months immediately prior and after to such season, as a result of the nature of the contracts serviced by the Company requiring a significant amount of work to be performed outdoors. As a result, the Company's revenue recognized during the three months ended February 28, 2026 and 2025 was lowest as these periods span the winter season in the jurisdictions in which the Company operates. Significant fluctuations in the above periods include a revenue decline during the three months February 28, 2026 resulting from a decrease in revenue from project deferrals in the public and private sectors during the period as well as a one-time non-cash charge related to the Company's acquisition of a public listing of $1.5 million. Other one-time charges leading to declines in income during the respective period include a one-time impairment charge during the period ended May 31, 2025 related to the write-down of associated with the reclassification of assets subsequently sold by the Company in an auction which were classified as assets held for sale at May 31, 2025 and measured at fair value less costs to sell as well as stock-based compensation of $0.3 million during the three months ended November 30, 2024.

Note: The Company has not prepared quarterly financial statements prior to the three and six months ended November 30, 2024, and as a result is relying on the exception noted in item 1.5 of Form 51-102F1, and periods prior to this date have not been presented. Results from the above have been prepared in accordance with IFRS.

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NET INCOME AND ADJUSTED EBITDA

Three months ended February 28, 2026 and 2025

Set out below is a reconciliation of the Company's net income to adjusted EBITDA:

Three months ended February 28,	2026	2025
Net (loss) income	$ (2,520,520)	$ 126,895
Finance costs	146,471	232,277
Depreciation and amortization	337,912	471,421
EBITDA(*)	(2,036,137)	830,593
Listing costs	1,474,285	-
Loss on lease modification	15,972	-
(Gain) Loss on disposals of property and equipment, net	(11,066)	10,515
Loss on settlement of debt, net	-	12,000
Adjusted EBITDA(*)	$ (556,946)	$ 853,108

(*) EBITDA and Adjusted EBITDA are non-IFRS measures used throughout this MD&A. See "Non-IFRS measures" for more information on each non-IFRS measure.

During the three months ended February 28, 2026, the Company's Adjusted EBITDA was negative $0.5 million representing a decrease of $1.4 million compared to Adjusted EBITDA of $0.9 million during the same period in the prior year. The decrease in the Company's Adjusted EBITDA during the three months ended February 28, 2026 compared to the prior year was primarily the result of a decrease in gross profit during the current year as the result of a decrease in revenue as well as increases in one-time cost of sales from increased one-time repair and maintenance costs required to sustain operations and increased short-term rentals as part of a shift in the Company's strategy towards short-term rentals.

Nine months ended February 28, 2026 and 2025

Set out below is a reconciliation of the Company's net income to adjusted EBITDA:

Nine months ended February 28,	2026	2025
Net (loss) income	$ (2,472,320)	$ 194,438
Finance costs	509,483	757,069
Depreciation and amortization	1,188,999	1,671,889
EBITDA(*)	(773,838)	2,623,396
Loss on settlement of debt, net	30,008	12,000
Impairment on assets held for sale	396,202	-
Loss on lease modification	15,972	-
Listing costs	1,474,285	-
(Gain) loss on disposals of property and equipment, net	(11,066)	2,680
Share-based payments	-	95,000
Share-based compensation	-	314,338
Adjusted EBITDA(*)	$ 1,131,563	$ 3,047,414

(*) EBITDA and Adjusted EBITDA are non-IFRS measures used throughout this MD&A. See "Non-IFRS measures" for more information on each non-IFRS measure.

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During the nine months ended February 28, 2026, the Company's Adjusted EBITDA was $1.1 million representing a decrease of $1.9 million compared to Adjusted EBITDA of $3.0 million during the same period in the prior year. The decrease in the Company's Adjusted EBITDA during the nine months ended February 28, 2026 compared to the prior year was primarily the result of a decrease in gross profit during the current year as the result of a decrease in revenue as well as increases in one-time cost of sales from increased one-time repair and maintenance costs required to sustain operations and increased short-term rentals as part of a shift in the Company's strategy towards short-term rentals.

LIQUIDITY AND CAPITAL RESOURCES

The Company's financial statements have been prepared in accordance with IFRS on the basis that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through forced liquidation.

As at February 28, 2026, the Company had negative working capital of $3.3 million compared to negative working capital of $3.9 million at May 31, 2025. The Company had cash and cash equivalents of $1.6 million at February 28, 2026 compared to cash and cash equivalents of $0.1 million and bank indebtedness of $0.3 million at May 31, 2025. The Company, through its primary financial institution, has available two lines of credit with an aggregate limit of $0.7 million.

Cash provided by operating activities was $1.3 million during the nine months ended February 28, 2026 compared to $3.3 million during the nine months ended February 28, 2025. Cash provided by operating activities during the nine months ended February 28, 2026 consisted primarily of non-cash addbacks for depreciation and amortization of $1.2 million, non-cash listing costs of $1.2 million, finance costs of $0.5 million, impairment on assets held for sale of $0.4 million, together with working capital adjustments including a decrease in accounts receivable of $0.7 million and an increase in accounts payable and accruals of $0.3 million, offset by the net and comprehensive loss of $2.5 million, an increase in prepaid expenses of $0.1 million, interest paid on long-term debt of $0.3 million and interest paid on lease liabilities of $0.1 million. Cash provided by operating activities during the nine months ended February 28, 2025 consisted primarily of net income of $0.2 million, non-cash addbacks for depreciation and amortization of $1.7 million, stock-based compensation of $0.3 million, share-based payments of $0.1 million, finance costs of $0.8 million and working capital adjustments for accounts payable and accrued liabilities of $1.7 million. Offsetting such increases was a negative working capital adjustment for accounts receivable of $0.8 million, as well as interest payments of $0.5 million on the Company's long-term debt and $0.2 million on the Company's lease liabilities.

Cash provided by investing activities was $1.2 million during the nine months ended February 28, 2026 compared to cash used in investing activities of $1.3 million during the nine months ended February 28, 2025. Cash provided by investing activities during the nine months ended February 28, 2026 consisted primarily of proceeds of disposition of property and equipment of $1.6 million, offset by acquisitions of property and equipment of $0.3 million and advances to Samurai prior to the QT of $0.1 million. Cash used in investing activities during the nine months ended February 28, 2025 consisted of primarily of acquisitions of property and equipment of $1.3 million.

Cash used in financing activities was $1.0 million during the nine months ended February 28, 2026 compared to $2.0 million during the nine months ended February 28, 2025. Cash used in financing activities during the nine months ended February 28, 2026 consisted primarily of principal repayments of lease liabilities of $0.9 million, principal repayments of long-term debt of $3.1 million and a decrease in bank indebtedness of $0.3 million, offset by net proceeds from the issuance of common shares of $3.0 million and proceeds from long-term debt of $0.3 million. Cash used in financing activities during the nine months ended February 28, 2025 consisted primarily of principal repayment of lease liabilities of $0.7 million, principal repayments of long-term debt of $2.5 million, decrease in bank indebtedness of $0.5 million, and repayment of advances from related parties of $0.2 million, offset by proceeds of long-term debt of $1.3 million, proceeds from the issuance of common shares of $0.4 million, and advances from related parties of $0.1 million.

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The Company addressed its working capital deficiency through the Concurrent Financing and by continuing to generate cash flow from operations. The Company expects such financing to sustain its short-term business objectives, with longer-term objectives to be financed by operating cash flows and/or future debt or equity financings which may be dilutive in nature. There is a risk that the Company may not be able to obtain additional financing on a timely basis or on terms that are acceptable to the Company, however, management currently assesses this risk as low.

Since inception, the Company has relied on the reinvestment of its operating cash flows and financing arrangements from related parties and asset lenders to fund its operations. The Company ensures its obligations are met through the close monitoring of its ongoing cash forecasts and plans its operations and investments accordingly. As a result of the Company's ongoing cash requirements, several of the Company's long-term payables have been restructured such that the payments are lower during the months of May and June when the Company's liquidity is typically lower. The Company does not have any committed capital expenditures as at February 28, 2026.

The Company has guaranteed a loan to 1210244 B.C. Ltd., a Company jointly owned by Companies controlled by Thomas Hall and John McPherson (see "Related Party Transactions"), secured by land and land improvements. If the counterparty fails to pay, and the Company is unable to enforce its claims to the land and land improvements, there is a risk that the Company's cash flow may be negatively impacted due to the requirement of the Company to pay all, or a portion of the remaining balance on such loan. As at February 28, 2026, the Company has not had to make any payments to the lender on behalf of the counterparty and management believes that a risk of loss under this arrangement is low.

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CONTRACTUAL OBLIGATIONS

Set out below is the Company's undiscounted contractual obligations as at February 28, 2026:

As at February 28, 2026	Total	2026	2027	Year ended May 31,
				2028	2029	2030	Thereafter
Accounts payable & accruals	$ 4,016,059	$ 4,016,059	$ -	$ -	$ -	$ -	$ -
Advances from related parties	269,495	269,495	-	-	-	-	-
Lease liabilities	1,974,918	173,778	681,856	606,325	215,959	162,000	135,000
Long-term debt	6,990,369	738,843	2,940,354	2,174,861	872,701	215,599	48,011
	$ 13,250,841	$ 5,198,175	$ 3,622,210	$ 2,781,186	$ 1,088,660	$ 377,599	$ 183,011

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CAPITAL RESOURCES

Common shares:

The Company has an unlimited number of voting common shares without par value. The Company's share capital consisted of 73,522,074 issued and outstanding common shares as at February 28, 2026 and 59,516,000 as at May 31, 2025. As at February 28, 2026, the Company had 6,820,000 stock options and 10,306,074 warrants outstanding.

Debt facilities

The Company's debt facilities as at February 28, 2026 are as follows:

	Interest rate	Maturity	Total facility	Amount drawn
Bank indebtedness(*)	Prime + 3.25%	N/A	$ 700,000	$ -
Equipment financing	0.00% - 15.03%	2026 - 2031	$ 6,456,299	$ 6,456,299
			$ 7,156,299	$ 6,456,299

(*) – Aggregate limit of $700,000 from two available lines.

RELATED PARTY TRANSACTIONS

Key management personnel are those persons having the authority and responsibility for planning, directing, and controlling the activities of the Company. The Company's key management consists of the Company's Board of Directors, Chief Executive Officer ("CEO"), Chief Operating Officer ("COO") and Chief Financial Officer ("CFO").

Set out below is a summary of key management compensation during the three- and nine-months ended February 28, 2026 and 2025:

Three months ended	February 28, 2026		February 28, 2025
Wages and benefits	$	67,866	$	60,000
Stock-based compensation		-		-
Balance end of period	$	67,866	$	60,000
Nine months ended	February 28, 2026		February 28, 2025
Wages and benefits	$	200,202	$	180,000
Stock-based compensation		-		261,117
Balance end of period	$	200,202	$	441,117

During the three- and nine-months ended February 28, 2026, the Company incurred management fees expense of $53,250 and $159,750, respectively (2025 – $53,250 and $177,500, respectively) to 0777528 BC Ltd., a Company owned by the CEO of the Company. As at February 28, 2026, included in accounts payable and accruals is $116,825 due to this entity (May 31, 2025 - nil). During the three- and nine-months ended February 28, 2025, the Company received advances from this entity of nil and $10,000, respectively and as at February 28, 2026, included in advances from related parties is $158,857 (May 31, 2025 - $158,857) of previously advanced funds.

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During the three- and nine-months ended February 28, 2026, the Company incurred management fees expense of $52,500 and $157,500, respectively (2025 – $52,500 and $157,500, respectively) to 1204711 BC Ltd., a Company owned by the COO of the Company. During the three- and nine-months ended February 28, 2025, the Company advanced nil and $3,500, respectively to the entity and received repayments of previous advances of nil and $800, respectively. As at February 28, 2026, included in accounts payable and accruals is $108,850 due to the entity (May 31, 2025 – nil).

During the three- and nine-months ended February 28, 2025, the Company advanced $19,548 and $52,450, respectively, to 1210244 BC Ltd., a Company owned jointly by Companies controlled by the Company's CEO and COO. Effective April 1, 2021, the Company entered into a lease agreement with 1210244 BC Ltd. for the lease of yard storage, at a rate of $13,500 per month plus GST, for a period of ten (10) years with two (2) options to extend the lease for five (5) years per option. During the three- and nine-months ended February 28, 2026, the Company made payments on the lease totaling $46,286 and $140,998, respectively (2025 – nil and nil, respectively). As at February 28, 2026, included in lease liability is $764,240 (May 31, 2025 - $892,995) reflecting the balance of the unpaid lease liability of which $128,662 (May 31, 2025 - $146,029) is recorded as the current portion.

Upon completion of the Company's QT (see Note 7), the Company assumed a note payable of $35,000 payable to a director of the Company, the result of previous advances to Samurai. As at February 28, 2026, the balance of the note of $35,000 is recorded within advances from related parties.

During the three- and nine-months ended February 28, 2025, the Company advanced $67 and $203, respectively, to 1298321 BC Ltd., a Company owned jointly by Companies controlled by the Company's CEO and COO. As at February 28, 2026, there were no balances receivable or payable to the entity (May 31, 2025 - nil).

During the three- and nine-months ended February 28, 2025, the Company received advances from its CEO of nil and $41,432, respectively, and repaid nil and $54,839, respectively, to the individual from previous advances to the Company. As at February 28, 2026, amounts repayable include $4,336 recorded within advances from related parties (May 31, 2025 - $4,336).

During the three- and nine-months ended February 28, 2025, the Company repaid its COO $5,243 and $88,557, respectively of previous advances to the entity and received advances of nil and $54,839, respectively. As at February 28, 2026, amounts repayable include $71,302 within advances from related parties (May 31, 2025 - $71,302) and $289 within accounts payable and accrued liabilities (May 31, 2025 – nil).

During the three- and nine-months ended February 28, 2025, the Company repaid previous advances of nil and $25,000, respectively, from close family members of the Company's COO. There were no remaining amounts payable to these individuals as at February 28, 2026 and May 31, 2025.

The above amounts receivable and payable are unsecured, non-interest bearing and due on demand. Related party transactions are incurred in the normal course of operations and are initially measured at fair value.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

PROPOSED TRANSACTIONS

The Company has no proposed transactions.

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CRITICAL ACCOUNTING ESTIMATES

Impairment of non-financial assets

The Company performs an impairment test of its non-financial assets by utilizing a discounted cash flow model or fair value less cost to sell to determine the value-in-use. The Company determines the cash flows based on a five-year forecast. Such calculations require the use of estimates and forecasts of future cash flows. Additionally, qualitative factors such as market trends, obsolescence, customer relationships, strength of management, strength of debt and capital markets, and degree of variability in cash flows, as well as other factors, are considered when making assumptions with regard to future cash flows and the appropriate discount rate. The recoverable amount is most sensitive to the discount rate, as well as the forecasted income and revenue growth rate used for forecasting purposes. A change in any of the critical assumptions or estimates used to evaluate goodwill and other non-financial assets could result in a material change to the results of operations.

Impairment of financial assets

Determinations about the recoverability of financial assets, including trade accounts receivable, require the Company to make a critical judgment in determining whether there is objective evidence that a loss event has occurred, and if so, estimate the amount and timing of future cash flows. The Company estimates expected credit losses resulting from any inability to collect its trade receivables.

When determining whether objective evidence of impairment exists at each reporting date, the Company uses a provision matrix to estimate expected credit losses. The provision rates are based on days past due and the calculation reflects the probability-weighted outcome, discounted for the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 18(c) of the Annual Financial Statements. The Company evaluates the concentration of risk with respect to trade receivables and contract assets as low, as the Company does not regularly experience material write-offs. Future collections of trade accounts receivable that differ from the Company's current estimates may affect the results of the Company's operations in future periods as well as the Company's trade receivables and general and administrative expenses, and such amounts may be material.

Useful lives of property and equipment

The depreciation methods and estimated useful lives reflect the pattern in which the Company estimates the asset's future economic life to be consumed.

Fair value of financial instruments

When the fair value of financial assets and financial liabilities recorded in the financial statements of financial position cannot be derived from active markets, the Company determines the financial instruments' fair values using valuation techniques including discounted cash flow models. The inputs to these models are taken from observable markets where possible, but when such observable markets do not exist, a degree of judgment is required in establishing fair values.

The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

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Incremental borrowing rate of leases (IBR)

The Company is unable to readily determine the interest rate implicit in leases in which it is a lessee, and therefore, uses the IBR to measure its leases liabilities. The IBR is the estimated rate of interest that the Company would be charged to borrow over a similar term for a similar asset of a similar value to the right-of-use asset in a similar economic market. The Company estimates the IBR using observable inputs such as market interest rates and credit spreads.

Revenue recognition

Revenue from long-term contracts is determined on the percentage of completion method, based on the amount delivered to the customer to date (output method). The Company has a process whereby progress on jobs is reviewed by management on a regular basis and estimated costs to complete are updated. However, due to unforeseen changes in the nature or cost of the work to be completed or performance factors, contract profit can differ significantly from earlier estimates.

Going concern

Management is required to determine whether the going concern assumption is appropriate for the Company at the end of each reporting period. Considerations taken into account include available information about the future including the availability of financing and revenue projections, as well as current working capital balances and future commitments of the Company. Management prepares the financial statements on a going concern basis unless management either intends to liquidate the entity or has no realistic alternative other than to do so.

Share-based payments

The Company measures the cost of equity-settled share-based payment transactions with employees by reference to the fair value of equity instruments at the grant date. Estimating the fair value for share-based payments requires the Company to determine the most appropriate valuation model for a grant of such instruments, which is dependent on the terms and conditions of the grant.

NEW ACCOUNTING PRONOUNCEMENTS

The following accounting standards and amendments have been issued by the IASB or the International Financial Reporting Interpretations Committee that are not yet effective as of the date of the Company's financial statements:

Presentation and Disclosure in Financial Statements – IFRS 18

In April 2024, the IASB issued IFRS 18, which will replace IAS 1 - Presentation of Financial Statements. The standard aims to improve the manner in which companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, specifically introducing additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation and disaggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. The Company is evaluating the impact of the above amendments on its financial statements.

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Amendments to IFRS 9: Financial Instruments and IFRS 7: Classification and Measurement of Financial Instruments

In May 2024, the IASB issued Amendments to IFRS 9 and IFRS 7 which clarify the date of recognition and derecognition of financial assets and liabilities and add further guidance for assessing whether a financial asset meets the solely payment of principal and interest criterion. The amendments also add new disclosures for certain instruments with contractual terms that can change cash flows (on occurrence or non-occurrence of a contingent event) and update the disclosures for investments in equity instruments designated at fair value through other comprehensive income.

The amendments are effective for annual periods beginning on or after January 1, 2026, and are to be applied retrospectively. The Company is currently assessing the impact of these amendments on its consolidated financial statements.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The following represents the carrying amounts and fair value of the Company's financial instruments as at February 28, 2026 and May 31, 2025:

	As at February 28, 2026		As at May 31, 2025
	Carrying amount	Fair value	Carrying amount	Fair value
Financial assets
Amortized cost
Accounts receivable	$ 2,324,187	$ 2,324,187	$ 2,878,272	$ 2,878,272
Financial liabilities
Amortized cost
Bank indebtedness	$ -	$ -	$ 335,835	$ 335,835
Accounts payable and accruals	4,016,059	4,016,059	3,719,383	3,719,383
Advances from related parties	269,495	269,495	234,495	234,495
Lease liabilities	1,999,734	1,999,734	3,531,703	3,531,703
Long-term debt	6,456,299	6,456,299	9,241,631	9,241,631

The disclosure of the fair value of the Company's financial instruments is followed by the following hierarchy:

• Level 1: Fair value is measured utilizing quoted, unadjusted market prices for identical assets or liabilities;
• Level 2: Fair value is measured utilizing inputs other than those in Level 1, and such inputs that have a significant impact on the fair value are observable, directly or indirectly;
• Level 3: Fair value is measured utilizing unobservable market data or statistical techniques to derive forward estimates from observable market data and unobservable inputs.

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The risks associated with the Company's financial instruments are as follows:

(a) Market risk

Market risk is the risk that the fair value or future cash flows will fluctuate as a result in a change in market prices. The Company's market risk is as follows:

(i) Interest rate risk: is the risk that the fair value or future cash flows will fluctuate as a result of a change in market interest rates. The Company is exposed to interest rate risk as a result of its lines of credit and long-term debt. The Company minimizes its interest rate risk through entering into debt arrangements with fixed-rate interest rates. An increase in BMO's prime rate of 100 basis points would result in an insignificant increase in the Company's finance costs incurred on its bank indebtedness at February 28, 2026 and May 31, 2025.

(ii) Commodity price risk: is the risk that the Company may experience fluctuations in its future cash flows as a result of changes in market prices for commodities, which includes the price of fuel and other material inputs in construction. The Company minimizes its commodity price risk by reviewing market prices, at least annually, and incorporating into its bids for future work. Additionally, certain contracts permit the Company to add a fuel surcharge to compensate the Company for increases in the price of fuel.

(b) Credit risk

Credit risk is the risk of financial loss arising when a partner or counterparty to a financial instrument fails to meet its contractual obligations and arises primarily as a result of the Company's trade accounts receivable. The carrying amounts of the Company's financial assets represents the maximum credit exposure.

The Company limits its exposure to credit risk on cash by placing financial instruments with high-credit quality financial institutions and the Company believes that it has no significant credit risk regarding its cash.

The Company is subject to a concentration of credit risk related to its trade accounts receivable as four customers exceed 10% of the Company's total outstanding trade accounts receivable for an aggregate of 67% of the Company's trade accounts receivable at February 28, 2026 (May 31, 2025 – four customers for an aggregate of 77% of the Company's trade accounts receivable).

(c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity risk through the close monitoring of its forecasted and actual cash flows as well as investing and financing activities to ensure that the Company has sufficient liquidity to meet its liabilities when due and to fund future operations.

The disclosure of the fair value of the Company's financial instruments is followed by the following hierarchy:

• Level 1: Fair value is measured utilizing quoted, unadjusted market prices for identical assets or liabilities;
• Level 2: Fair value is measured utilizing inputs other than those in Level 1, and such inputs that have a significant impact on the fair value are observable, directly or indirectly;
• Level 3: Fair value is measured utilizing unobservable market data or statistical techniques to derive forward estimates from observable market data and unobservable inputs.

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RISKS AND UNCERTAINTIES

The Company is subject to a number of risks and uncertainties that may significantly impact its financial condition and future financial performance. Prospective investors should carefully consider the risks described below, together with all the other information included in this MD&A, before making an investment decision.

Availability of financing and dilution:

The Company intends to finance its operations with the proceeds from the QT along with its current debt facilities. The Company may require additional financing to pursue its strategic objectives which may not be available on satisfactory terms, or at all. Such financing may be dilutive to existing shareholders of the Company.

Nature of the securities:

The Company's securities involve a high degree of risk and should be undertaken only by investors whose financial resources are sufficient to enable them to assume such risks. The Company's securities should not be purchased by persons who cannot afford the possibility of the loss of their entire investment.

Economic conditions:

Unfavourable economic conditions may impact the Company's financial viability as a result of increased financing costs and limited access to capital markets. Specifically, at the current time the Company is unable to measure the impacts of ongoing global conflicts.

Dependence on management:

The Company is highly dependent on the personal efforts and commitments of its existing management team. If any such efforts were to be unavailable or limited, the Company's operations may experience a significant disruption in which the Company would require the services of additional management personnel to manage and operate the Company.

Litigation:

The Company and/or its directors may be subject to a variety of civil or other legal proceedings which may be with or without merit.

Dividends:

The Company is unlikely to pay any dividends in the foreseeable future as a result of the Company's limited resources which are currently deployed in the Company's corporate and business development activities. The decision to pay dividends in the future will be at the discretion of the Company's board of directors and will be dependent on the Company's financial condition, results of operations, capital requirements and any other considerations deemed relevant by the Board of Directors

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NON-IFRS MEASURES

This MD&A refers to certain specified financial measures, including non-IFRS financial measures, non-IFRS ratios and supplementary financial measures. Management uses these financial measures for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of ongoing operations and in analyzing our business performance and trends. These specified financial measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement our financial information reported under IFRS by providing further understanding of our results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

The Company uses the following non-IFRS financial measures: "gross profit percentage", "earnings before interest, taxes, depreciation, and amortization ("EBITDA")" and "adjusted earnings before interest, taxes, depreciation, and amortization ("Adjusted EBITDA")". Management also uses non-IFRS financial measures to prepare annual operating budgets. We strongly encourage investors to review our audited Annual Financial Statements and publicly filed reports in their entirety and not to rely on any single financial measure.

The Company uses these non-IFRS financial measures in addition to, and in conjunction with, results presented in accordance with IFRS. These non-IFRS financial measures provide an additional way of view of the Company's operations that, when viewed with our IFRS results and, the accompanying reconciliations to the most directly comparable IFRS financial measures may provide a more complete understanding of factors and trends that affect the Company. In this MD&A, we discuss the specified financial measures, including the reasons that we believe that these measures provide useful information regarding our financial condition, results of operations, cash flows and financial position, as applicable, and, to the extent material, the additional purposes, if any, for which these measures are used. Reconciliations of non-IFRS financial measures to the most directly comparable IFRS financial measures are contained in this MD&A.

"Gross profit percentage" is defined as gross profit as a percentage of revenue. "EBITDA" is defined as profit or loss before income taxes, finance costs, depreciation and amortization. "Adjusted EBITDA" is defined as profit or loss before income taxes, finance costs, depreciation and amortization, stock-based compensation, share-based payments, gain or loss on disposals of property and equipment, loss on settlement of debt, impairment of assets held for sale, loss on lease modifications, and listing costs. Gross profit percentage, EBITDA and Adjusted EBITDA are non-IFRS financial measures in which the Company's profit or loss is the most directly comparable measure published in the Company's financial statements. Management believes that Gross profit percentage is a useful measure to assess the Company's performance to demonstrate the yield from the Company's performance during the period prior to consideration of general operating costs and EBITDA and Adjusted EBITDA are useful measures to assess the Company's performance as they exclude the impacts of interest, taxes, depreciation, and amortization; and in the case of Adjusted EBITDA, excludes impacts of other items that management believes do not reflect the underlying business performance of the Company. Management cautions investors that Gross profit percentage, EBITDA and Adjusted EBITDA should not replace profit or loss as indicators of performance, or cash flows from operating, investing, and financing activities as a measure of the Company's liquidity and cash flows. See "Net income and Adjusted EBITDA" for the reconciliation of Adjusted EBITDA to net income for the current and comparative periods.

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MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The information provided in this MD&A, including the financial statements, is the responsibility of management. In the preparation of these statements, estimates are necessary to make an appropriate determination of the measurement of certain assets or liabilities. Management believes such estimates have been based on careful judgments and have been properly reflected in the accompanying financial statements. In contrast to the certificate required under National Instrument 52-109 Certificate of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109"), the Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures ("DC&P") and internal control over financial reporting ("ICFR"), as defined in NI 52-109, in particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of:

• Controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
• A process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

The Company's certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.