{0}------------------------------------------------

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the first quarter ended December 31, 2025 Dated: February 10, 2026

{1}------------------------------------------------

INTRODUCTION AND FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis ("MD&A") presents management's view of the financial position and performance of TerraVest Industries Inc. ("TerraVest" or the "Company") for the first quarter ended December 31, 2025 and should be read in conjunction with TerraVest's interim condensed consolidated financial statements for the first quarter ended December 31, 2025. The financial information in this MD&A has been prepared in accordance with IFRS Accounting Standards ("IFRS"). All amounts are stated in thousands of Canadian dollars, except share and per share amounts or unless otherwise stated. This discussion is prepared as at February 10, 2026 and has been prepared with all available information up to and including the date of this report. This document should be read in full including the definitions of non-IFRS measures such as Adjusted earnings before interests, income taxes, depreciation and amortization ("Adjusted EBITDA"), Cash Available for Distribution, Dividend Payout Ratio, Maintenance Capital Expenditures and Working Capital which are found in the following section of this MD&A.

This MD&A sets out management's assessment of TerraVest's future plans and operations and contains forward-looking statements as defined under applicable Canadian securities legislation. These forward-looking statements often contain words such as "anticipates", "does not anticipate", "believes", "estimates", "forecasts", "intends", "expects", "does not expect", "could", "may", "will", "should", "plans" or similar terms or variations of these words and contain estimates or assumptions about the outcome of future events. These forward-looking statements are provided in the interest of providing readers with information regarding TerraVest. Readers are cautioned that management's expectations, estimates and assumptions, although considered reasonable, may prove to be incorrect and readers should not place undue reliance on forward-looking statements which are subject to risks, uncertainties, and other factors that could result in the outcome of these events being materially different from those anticipated in this MD&A. These factors and assumptions include, but are not limited to: levels of business activity in TerraVest's segments, political conditions and events, competitive pressures, changes in government policy or regulations, commodity pricing, and general economic conditions. TerraVest's actual results may differ materially from those expressed in, or implied by these forward-looking statements. The forward-looking information contained in the MD&A is expressly qualified by the cautionary statement. TerraVest does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances, unanticipated events or circumstances, or should its estimates or assumptions change, after the date hereof, except as expressly required by law. Additional information relating to TerraVest and the risks to which its business is subject is contained in its Annual Information Form ("AIF"), which is available on SEDAR+ at www.sedarplus.ca.

NON-IFRS FINANCIAL MEASURES

The Company uses measures (and ratios) that are not in accordance with IFRS to provide investors with supplemental metrics to assess and measure its operating performance and financial position from one period to the next. These metrics are presented as a complement to enhance the understanding of TerraVest's operating results but not in substitution of IFRS results.

Adjusted EBITDA, Cash Available for Distribution, Dividend Payout Ratio, Maintenance Capital Expenditures and Working Capital are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS. TerraVest's definitions may differ from those of other issuers and therefore may not be comparable to similarly titled measures used by other issuers.

Adjusted EBITDA: is defined as net income adjusted for income tax expense, financing costs, depreciation, amortization, change in fair value of derivative financial instruments, change in fair value of investment in equity instruments and investment in a limited partnership, change in fair value of contingent considerations, gains or losses on foreign exchange, gains or losses on disposal of other property, plant and equipment and property, plant and equipment for rental, gains or losses on disposal of intangible assets, gains or losses on lease modification, gains or losses on remeasurement of equity interest, gain on bargain purchase, gains or losses on sale of business, non-recurring acquisition-related costs, impairment charges and other non-recurring and/or non-operations related items that do not reflect the current ongoing operations of TerraVest. Management believes this is a useful metric in evaluating the ongoing operating performance of TerraVest. Readers are cautioned that Adjusted EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of TerraVest's performance.

{2}------------------------------------------------

Cash Available for Distribution: is defined as cash flow from operating activities adjusted for changes in non-cash operating working capital, maintenance capital expenditures and repayment of lease liabilities. Management believes that cash available for distribution, as a liquidity measure, is a useful metric that provides an indication of the cash available from ongoing operations that can be distributed to shareholders as a dividend. Readers are cautioned that Cash Available for Distribution should not be construed as an alternative to cash flow from operating activities determined in accordance with IFRS as an indicator of TerraVest's liquidity and cash flows.

Dividend Payout Ratio: is defined as dividends paid in cash during the period divided by Cash Available for Distribution for the period. Management believes that Dividend Payout Ratio is a useful metric as it provides an indication of TerraVest's ability to sustain its current dividend policy. There is no directly comparable IFRS measure for Dividend Payout Ratio.

Maintenance Capital Expenditures: is defined as capital expenditures made to sustain the operations of TerraVest's operating businesses and to maintain the productive capacity of the businesses over an economic cycle, whether or not they yield significant cost or production efficiencies. Management believes that Maintenance Capital Expenditures should be funded by cash flow from existing operating activities and, therefore, deducted in determining Cash Available for Distribution. There is no directly comparable IFRS measure for Maintenance Capital Expenditures.

Working Capital: is calculated by subtracting current liabilities from current assets. Management uses Working Capital as a measure for assessing overall liquidity. There is no directly comparable IFRS measure for Working Capital.

BUSINESS OVERVIEW

TerraVest is a diversified industrial company that manufactures and sells goods and services to various end-markets including: agriculture, mining, energy production and distribution, chemical, utilities, transportation and construction, among others. TerraVest is focused on acquiring and operating market-leading businesses that will benefit from TerraVest's financial and operational support. These opportunities generally center on manufactured products and services that complement TerraVest's existing operations and provide integration benefits.

TerraVest is comprised of four operating segments as follows: Home Heating and Cooling Products and Containment Equipment ("HVAC and Containment Equipment"), Compressed Gas Storage and Distribution Equipment ("Compressed Gas Equipment"), Energy Processing Equipment ("Processing Equipment") and Service.

HVAC and Containment Equipment

TerraVest's HVAC and Containment Equipment segment is a provider of products and services to a variety of industries across Canada and the United States. The HVAC and Containment Equipment segment manufactures and distributes products including commercial and residential refined fuel tanks, furnaces, boilers, air conditioning equipment and controls, fuel supply systems, load banks as well as chemical storage tanks, wastewater treatment systems, grease removal systems and other custom built steel storage products. This segment sells its products through various distribution networks and direct to end users. The end users of the products are fuel distributors, commercial, residential and industrial consumers, municipalities and government agencies.

Compressed Gas Equipment

TerraVest's Compressed Gas Equipment segment is a provider of products and services to a variety of industries across Canada and the United States. The Compressed Gas Equipment segment manufactures engineered products for the storage, distribution and dispensing of compressed gases, crude oil, refined fuel, dry bulk, chemicals and other liquids. Compressed gases include liquid propane gas ("LPG"), natural gas liquids ("NGL's"), liquified natural gas ("LNG"), anhydrous ammonia ("NH3"), carbon dioxide ("CO2") and various other gases. The products include bulk storage vessels, transport trailers, delivery units, dispensers, commercial and residential storage tanks and other custom vessels. This segment also services the various products it manufactures. This segment's products and services are primarily sold to petroleum and gas distributors, fertilizer distributors, farmers, midstream energy companies and transportation companies and are used by industrial, commercial and residential consumers.

{3}------------------------------------------------

Processing Equipment

TerraVest's Processing Equipment segment is a fabricator of equipment for various end-markets including upstream and midstream oil and gas production, renewable natural gas production, water treatment and mining. The Processing Equipment segment manufactures and sells a wide array of equipment such as: wellhead processing equipment and tanks, desanding equipment, water treatment equipment and various other custom process equipment. This segment's products and services are primarily sold to oil and gas producers, midstream companies, utilities, municipalities and engineering companies.

Service

TerraVest's Service segment provides a wide range of services to the energy sector in Western Canada including water management, environmental solutions, heating, rentals and well servicing. TerraVest's Service segment is well recognized for its technological innovation and industry-leading service product offering. This segment services many of the largest energy producers in Canada.

FIRST QUARTER REVIEW AND OUTLOOK

Business Performance

Management believes that there are certain non-IFRS financial measures that can be used to assist shareholders in analyzing the performance of TerraVest. The table below highlights certain financial results and reconciles net income to Adjusted EBITDA for the first quarter ended December 31, 2025 and the comparative period in fiscal 2025.

		First quarters ended
	Dec. 31, 2025	Dec. 31, 2024
	\$	\$
Sales	408,350	234,585
Net Income	35,231	30,431
Add (subtract):
Income tax expense	14,833	8,095
Financing costs	15,607	4,576
Depreciation and amortization	36,940	14,485
Change in fair value of derivative
financial instruments	(505)	2,404
Change in fair value of investment in
equity instruments	10,397	41
Change in fair value of investment in a
limited partnership	181	223
Change in fair value of contingent considerations	(48,307)	-
(Gain) loss on foreign exchange	3,342	(10,794)
(Gain) loss on disposal of other property, plant
and equipment	317	(132)
(Gain) loss on disposal of property, plant and
equipment for rental	(18)	(429)
Gain on bargain purchase	(285)	-
Acquisition-related cost	53	-
Adjusted EBITDA	67,786	48,900

{4}------------------------------------------------

Sales for the first quarter ended December 31, 2025 were \$408,350 versus \$234,585 for the prior comparable period. This represents an increase of 74%. The net change in sales is explained by organic growth in TerraVest base portfolio of \$21,888 and the impact of the 2025 business combinations explains the remaining \$151,877. TerraVest acquired all the issued and outstanding shares of Tankcon FRP Inc. ("Tankcon") in May 2025, of Simplex, Inc. ("Simplex") and L.B.T., Inc. ("LBT") in April 2025 and of EnTrans Holding, Inc. ("Entrans") in March 2025. In addition, TerraVest acquired all the Canadian assets of New Wave Energy Services Ltd. ("Wave") in September 2025 and of Aureus Energy Services Inc. ("Aureus") in January 2025. The organic growth represents an increase of 9% for TerraVest's base portfolio (excluding Tankcon, Simplex, LBT and Entrans). Wave and Aureus results can't be excluded from TerraVest results as Wave and Aureus activities have been fully integrated into one of TerraVest's existing subsidiaries whose operations are similar in nature.

The increase in sales for TerraVest base portfolio businesses versus the prior comparable period is a result of higher demand in the Service and the Processing Equipment segments. The Compressed Gas Equipment segment sales are also higher due to an increase in demand for service trucks, domestic tanks and storage tanks.

Net income for the first quarter ended December 31, 2025 was \$35,231 versus \$30,431 for the prior comparable period. This represents an increase of 16%. For the first quarter ended December 31, 2025, the increased revenues from TerraVest base portfolio businesses are partially offset by an unfavorable product mix.

These increases along with a favorable change in fair value of contingent considerations due to the Entrans acquisition were offset by additional depreciation and amortization expenses and financing costs as a result of business acquisitions, an unfavorable change in fair value of investment in equity instruments and a loss on foreign exchange. Other variances are also highlighted in the table above.

Adjusted EBITDA for the first quarter ended December 31, 2025 was \$67,786 versus \$48,900 for the prior comparable period. This represents an increase of 39%, which is the result of the reasons explained above.

The table below reconciles cash flow from operating activities to Cash Available for Distribution for the first quarter ended December 31, 2025 and the comparative period in fiscal 2025.

		First quarters ended
	Dec. 31, 2025	Dec. 31, 2024
	\$	\$
Cash Flow from Operating Activities	96,548	36,603
Add (subtract):
Change in non-cash operating working
capital items	(50,859)	(3,806)
Maintenance capital expenditures	(8,743)	(5,702)
Repayment of lease liabilities	(3,759)	(2,397)
Cash Available for Distribution	33,187	24,698
Dividends Paid	3,795	2,925
Dividend Payout Ratio	11%	12%

Cash flow from operating activities for the first quarter ended December 31, 2025 was \$96,548 versus \$36,603 for the prior comparable period. This represents an increase of 164%. The increase is attributable to additional net income and a favorable change in non-cash working capital items compared to the prior period, mainly explained by a decrease in accounts receivable and an increase in customer deposits, partially offset by a decrease in accounts payable.

Maintenance Capital Expenditures were \$8,743 for the first quarter ended December 31, 2025 versus \$5,702 for the prior comparable period representing an increase of 53%, which is primarily explained by the timing of such expenditures as well as TerraVest's portfolio growth following the 2025 business combinations. During the first quarter ended December 31, 2025, TerraVest's total purchase of property, plant and equipment ("PP&E") paid was \$21,997 of which \$13,254 is considered growth capital. The growth capital incurred during the first quarter was mainly used to invest in new manufacturing product lines and increase the asset base in one of its service businesses.

Cash Available for Distribution for the first quarter ended December 31, 2025 increased by 34% versus the prior comparable period. The increase is a result of reasons explained above and elsewhere in this MD&A.

{5}------------------------------------------------

Outlook

In general, TerraVest's portfolio of businesses is performing well. Recent acquisitions have made a meaningful contribution, and we expect this to continue throughout this fiscal year. Opportunities to enhance performance through synergies between recent acquisitions and the base portfolio of businesses continue to exist and are a focus for management.

Recent tariff announcements have created an environment of uncertainty in North America's manufacturing sector. TerraVest does benefit from a diverse manufacturing footprint in North America that allows it to mitigate against direct tariff related impacts. However, this uncertainty has resulted in softer demand for certain of TerraVest's businesses, particularly those that manufacture tank trailers. On a positive note, several of TerraVest's portfolio companies are seeing strong demand for products related to the data center build-out in North America.

The Company continues to make targeted investments to improve its manufacturing efficiency and expand its product lines, particularly in end-markets where it has a meaningful presence. With the new credit facility obtained in March 2025, TerraVest is very well-positioned to pursue its acquisition strategy.

Business Combinations

Subsequently to the end of the quarter, in January 2026, a subsidiary of TerraVest entered into a share purchase agreement to purchase all the issued and outstanding shares of KBK Industries, LLC ("KBK"). KBK is a U.S.-based manufacturer of aboveground and underground fiberglass tanks and steel storage tanks for the convenience store ("c-store"), agricultural, chemical, infrastructure and energy markets. The total consideration for the transaction was US\$90,000 paid using the revolving operating credit facility.

CONSOLIDATED RESULTS OF OPERATIONS

The following section provides the financial results of TerraVest's operations for the first quarter ended December 31, 2025 and the comparative period in fiscal 2025.

	First quarters ended
	Dec. 31, 2025	Dec. 31, 2024
	\$	\$
Sales	408,350	234,585
Cost of sales	305,665	163,960
Gross profit	102,685	70,625
Administration expenses	59,704	27,203
Selling expenses	12,188	9,019
Financing costs	15,607	4,576
Other (gains) losses	(34,878)	(8,699)
	52,621	32,099
Earnings before income taxes	50,064	38,526
Income tax expense	14,833	8,095
Net Income	35,231	30,431
Allocated to non-controlling interests	2,021	1,696
Net income attributable to common
shareholders	33,210	28,735
Weighted average shares outstanding – Basic	21,685,695	19,501,433
Weighted average shares outstanding – Diluted	22,178,026	20,257,534
Net income per share – Basic	\$1.53	\$1.47
Net income per share – Diluted	\$1.50	\$1.42

Sales for the first quarter ended December 31, 2025 increased by 74% versus the prior comparable period. The reasons have been explained previously in this MD&A.

{6}------------------------------------------------

Gross profit for the first quarter ended December 31, 2025 increased by 45% versus the prior comparable period. This is primarily explained by the contribution of Tankcon, Simplex, LBT and Entrans.

Administration expenses for the first quarter ended December 31, 2025 increased by 119% versus the prior comparable period. The increase in administration expenses is mainly due to a higher value of amortization of intangible assets resulting from the acquisition of Tankcon, Entrans, LBT and Simplex.

Selling expenses for the first quarter ended December 31, 2025 increased by 35% versus the prior comparable period. The increase in selling expenses is explained by the addition of Tankcon, Entrans, LBT and Simplex. The selling expenses as a percentage of sales have decreased from 3.8% to 3.0% for the same comparable period.

Financing costs for the first quarter ended December 31, 2025 increased by 241% versus the prior comparable period. The increase is primarily explained by additional interest expense on long-term debt and on lease liabilities as a result of the acquisition of Entrans, LBT, Simplex and Tankcon.

Other (gains) losses variance for the first quarter ended December 31, 2025 reflect a favorable change in fair value of contingent considerations from the Entrans acquisition partially offset by a loss on foreign exchange and an unfavorable change in fair value of investment in equity instruments.

Income tax expense variance for the first quarter ended December 31, 2025 is the result of the variation in taxable earnings and the timing of income tax expense adjustments.

As a result of the above, net income attributable to common shareholders for the first quarter ended December 31, 2025 increased by 16% versus the prior comparable period.

Segmented Results

a) HVAC and Containment Equipment

	First quarters ended
	Dec. 31, 2025	Dec. 31, 2024
	\$	\$
Sales	121,310	97,790
Net Income	22,950	21,939
Add (subtract):
Financing costs	1,043	697
Depreciation and amortization	6,889	5,200
(Gain) loss on foreign exchange	209	(1,808)
(Gain) loss on disposal of other property, plant
and equipment	(17)	(5)
Adjusted EBITDA	31,074	26,023

Sales for the first quarter ended December 31, 2025 were \$121,310 versus \$97,790 for the prior comparable period. This represents an increase of 24%. Excluding Simplex, sales for the first quarter ended December 31, 2025 were \$98,834 versus \$97,790 for the prior comparable period. This represents an increase of 1% for the period for TerraVest base portfolio. Sales were stable compared to the prior comparable period for TerraVest's base portfolio businesses.

Net income for the first quarter ended December 31, 2025 was \$22,950 versus \$21,939 for the prior comparable period. This represents an increase of 5%. The increase in net income is the result of the addition of Simplex and a reduction in amortization of intangible assets as some intangible assets related to a prior acquisition are now fully amortized, partially offset by foreign currency exchange loss.

Adjusted EBITDA for the first quarter ended December 31, 2025 was \$31,074 versus \$26,023 for the prior comparable period. This represents an increase of 19%, which is a result of the reasons explained above and highlighted in the table above.

{7}------------------------------------------------

b) Compressed Gas Equipment

	First quarters ended
	Dec. 31, 2025	Dec. 31, 2024
	\$	\$
Sales	206,779	75,609
Net Income (Loss)	(4,503)	6,040
Add (subtract):
Financing costs	2,354	638
Depreciation and amortization	22,699	3,942
Change in fair value of derivative
financial instruments	(101)	-
(Gain) loss on foreign exchange	287	(101)
(Gain) loss on disposal of other property, plant
and equipment	205	(10)
(Gain) loss on disposal of property, plant and
equipment for rental	(18)	(429)
Adjusted EBITDA	20,923	10,080

Sales for the first quarter ended December 31, 2025 were \$206,779 versus \$75,609 for the prior comparable period. This represents an increase of 173%. Excluding Tankcon, LBT and Entrans, sales for the first quarter ended December 31, 2025 were \$78,064 versus \$75,609 for the prior comparable period. This represents an increase of 3% for TerraVest base portfolio. The increase is primarily attributable to higher sales of service trucks, domestic tanks and storage tanks. This business segment has been impacted by lower demand on tank trailers in the United States market.

Net income (loss) for the first quarter ended December 31, 2025 was (\$4,503) versus \$6,040 for the prior comparable period. This represents a decrease of 175%. The reduction in net income is mainly explained by an increase in amortization of intangible assets following the various acquisitions in this segment. Net income was also impacted by an unfavorable product mix, non-recurring production start-up costs on new product lines and increased interest on lease liabilities.

Adjusted EBITDA for the first quarter ended December 31, 2025 was \$20,923 versus \$10,080 for the prior comparable period. This represents an increase of 108%, which is a result of the reasons explained above and highlighted in the table above.

c) Processing Equipment

	First quarters ended
	Dec. 31, 2025	Dec. 31, 2024
	\$	\$
Sales	22,602	19,068
Net Income	1,680	1,288
Add (subtract):
Financing costs	178	192
Depreciation and amortization	930	1,010
(Gain) loss on foreign exchange	47	(291)
(Gain) loss on disposal of other property, plant
and equipment	-	3
Adjusted EBITDA	2,835	2,202

Sales for the first quarter ended December 31, 2025 were \$22,602 versus \$19,068 for the prior comparable period. This represents an increase of 19%, which is attributable to stronger demand for natural gas processing equipment compared to the prior comparable period.

{8}------------------------------------------------

Net income for the first quarter ended December 31, 2025 was \$1,680 versus \$1,288 for the prior comparable period. This represents an increase of 30%, which is mainly the result of an increase in sales, a favorable product mix and manufacturing efficiencies realized following various initiatives to improve productivity and cost controls.

Adjusted EBITDA for the first quarter ended December 31, 2025 was \$2,835 versus \$2,202 for the prior comparable period. This represents an increase of 29%, which is a result of the reasons explained above and highlighted in the table above.

d) Service

	First quarters ended
	Dec. 31, 2025	Dec. 31, 2024
	\$	\$
Sales	59,670	45,737
Net Income	8,802	7,712
Add (subtract):
Financing costs	168	140
Depreciation and amortization	6,378	4,319
(Gain) loss on foreign exchange	1	(14)
(Gain) loss on disposal of other property, plant
and equipment	128	(119)
Adjusted EBITDA	15,477	12,038

Sales for the first quarter ended December 31, 2025 were \$59,670 versus \$45,737 for the prior comparable period. This represents an increase of 30%. The increase in sales in the Service segment is primarily driven by the water transfer and heating services offering, highlighting the successful integration of Wave and Aureus.

Aureus' and Wave's activities and results have been fully integrated into one of TerraVest's existing subsidiaries whose operations are similar in nature. As a result, it is impracticable to isolate Aureus' and Wave's specific contribution to this segment's sales since their respective acquisition date.

Net income for the first quarter ended December 31, 2025 was \$8,802 versus \$7,712 for the prior comparable period. This represents an increase of 14%, which is primarily attributable to higher sales volume, partially offset by an unfavorable service mix versus the prior comparable period.

Adjusted EBITDA for the first quarter ended December 31, 2025 was \$15,477 versus \$12,038 for the prior comparable period. This represents an increase of 29% and is the result of the reasons explained above.

{9}------------------------------------------------

Quarterly Results

	For the quarters ended
	31-Dec-25	30-Sep-25	30-Jun-25	31-Mar-25	31-Dec-24	30-Sep-24	30-Jun-24	31-Mar-24
	\$	\$	\$	\$	\$	\$	\$	\$
Sales	408,350	419,409	405,707	311,450	234,585	230,654	238,129	214,943
Adjusted EBITDA	67,786	81,902	68,098	65,687	48,900	47,547	49,062	43,934
Net income attributable to common shareholders	33,210	18,479	11,250	28,187	28,735	11,911	11,922	22,361
Net income per share
– Basic	1.53	0.85	0.55	1.45	1.47	0.61	0.63	1.23
– Diluted	1.50	0.83	0.53	1.39	1.42	0.59	0.61	1.19

TerraVest's operating segments are seasonal in nature. The strongest quarters for TerraVest are its first and last quarters. The Processing Equipment and Service segments generally experience higher sales in the first and second quarters as majority of the drilling in Western Canada occurs during this period. The HVAC and Containment Equipment and Compressed Gas Equipment segments generally experience higher sales during the first and last quarters as demand for residential, commercial and industrial heating products increases heading into the winter months. The third quarter is typically the weakest across all segments. TerraVest takes advantage of this seasonality to build inventory levels during non-peak demand periods, thereby allowing TerraVest to more readily meet increased levels of demand during its regular peak demand periods. However, the current economic context might change that historical seasonal profile.

CASH FLOW

The following table provides summary information with respect to consolidated cash flows from operating, investing and financing activities:

	First quarters ended
	Dec. 31, 2025	Dec. 31, 2024
	\$	\$
Cash flow from operating activities	96,548	36,603
Cash flow used in investing activities	(32,378)	(32,275)
Cash flow used in financing activities	(60,340)	(18,557)
Net inflows (outflows) for the period	3,830	(14,229)
Cash, beginning of year	13,946	28,375
Impact of foreign exchange on cash	(1,913)	2,260
Cash, end of period	15,863	16,406

Cash Flow from Operating Activities

TerraVest generated \$96,548 of cash flow from operating activities the first quarter ended December 31, 2025 compared to \$36,603 for the prior comparable period. The increase is attributable to additional net income and a favorable change in non-cash working capital items compared to the prior period, mainly explained by a decrease in accounts receivable and an increase in customer deposits, partially offset by a decrease in accounts payable.

Cash Flow used in Investing Activities

Cash flow used in investing activities during the first quarter ended December 31, 2025 was \$32,378 compared to \$32,275 for the prior comparable period. This relatively consistent level of cash usage is primarily attributable to lower cash paid for business acquisitions, offset by additional purchases of PP&E and investments in equity instruments.

Cash Flow used in Financing Activities

Cash flow used in financing activities during the first quarter ended December 31, 2025 was \$60,340 versus \$18,557 for the prior comparable period. The increased use of cash flow in financing activities is mainly attributable to higher debt repayment on the credit facility compared to the prior comparable period.

{10}------------------------------------------------

DIVIDENDS

During the first quarter ended December 31, 2025, TerraVest declared a dividend of \$0.20 per common share payable on January 9, 2026 to shareholders of record on December 31, 2025. This represents a 14% increase over the prior quarterly dividend.

Subsequent to the end of the first quarter, TerraVest declared a dividend of \$0.20 per common share payable on April 10, 2026 to shareholders of record on March 31, 2026.

TerraVest expects to declare and pay a dividend on a quarterly basis. The dividend policy may be changed from time to time at the sole discretion of the Board of Directors. Accordingly, there can be no assurance as to the amount or timing of any dividend in the future. In assessing whether to pay a dividend and in determining the amount of the dividend, the Board of Directors will consider TerraVest's financial condition and its then current business needs and other factors the Board of Directors may consider appropriate in the circumstances.

LIQUIDITY AND CAPITAL RESOURCES

TerraVest's objective in managing its capital resources is to ensure that there are adequate capital resources to support the operations of its various business segments and permit opportunistic acquisitions in order to maximize the return to shareholders. Management continually assesses TerraVest's capital needs to meet its objectives.

TerraVest's principal sources of liquidity are cash on hand, secured credit facilities and cash flow generated by its operations throughout the year. As at December 31, 2025, TerraVest's cash position was \$15,863 compared to \$13,946 as at September 30, 2025. As at December 31, 2025, TerraVest's consolidated working capital, excluding the short-term revolving credit facility, was \$198,285 compared to \$201,672 as at September 30, 2025. TerraVest expects to be able to fund all working capital requirements, contractual obligations, capital expenditures and dividends from a combination of cash on hand, operating cash flows and existing credit facilities.

Revolving Operating Loans

TerraVest and its subsidiaries have access to two revolving operating loans. One of the revolving operating loans is based on margin requirements. The revolving operating loans are subject to certain financial covenants which are based on the results of the individual subsidiaries in which the credit facilities are held. The availability of the revolving operating loans at any given time may have an impact on TerraVest's liquidity and available capital resources and its ability to fund its operating and future growth plans. As at December 31, 2025, the maximum amount available was \$810,000, of which \$433,563 was utilized: \$430,045 drawn as borrowings and \$3,518 as outstanding letters of credit. The letters of credit outstanding are considered a utilization of the facility but are not recorded in the consolidated statement of financial position. TerraVest was in compliance with all of its financial and non-financial covenants.

For further information on the financial and non-financial covenants, please refer to Note 9 of TerraVest's interim condensed consolidated financial statements for the first quarter ended December 31, 2025 and Note 15 of TerraVest's audited consolidated financial statements for the year ended September 30, 2025.

Revolving Term Loans

A subsidiary of TerraVest operating in the Service segment has access to revolving term loans totaling \$22,000 that can be used to purchase PP&E. As at December 31, 2025, \$13,433 was drawn. TerraVest was in compliance with all of its financial and non-financial covenants.

Term Loans

As part of their credit facility, TerraVest and certain of its subsidiaries have three term loans totaling \$246,433, obtained to finance a portion of the acquisition of Entrans. The term loans are non-revolving and mature as follows: \$100,000 in March 2026, \$100,000 in March 2027 and \$46,433 in March 2028, with no repayment scheduled before maturity.

{11}------------------------------------------------

Share Capital

TerraVest's common shares are listed on the Toronto Stock Exchange under the symbol "TVK". Changes in the common shares issued and outstanding were as follows:

	As at December 31, 2025 Number Amount		As at December 31, 2024
			Number	Amount
		\$		\$
Balance, beginning of year and end of period	21,685,695 563,988		19,501,433	250,644

Capital Structure

The capital structure of TerraVest consists of its revolving credit facilities, long-term debt and shareholders' equity attributable to common shareholders. The following table outlines TerraVest's capital structure:

	As at Dec. 31, 2025	As at Sept. 30, 2025
	\$	\$
Available on short-term revolving operating loan, net of amount
drawn	10,000	10,000
Utilized on long-term revolving operating loans	433,563	491,358
Available on long-term revolving operating loans, net of amount
utilized	366,437	308,642
Long-term debt (current and non-current)	264,073	266,197
Available on revolving term loans, net of amount drawn	8,567	7,267
Shareholders' equity attributable to common shareholders	744,331	722,038
	1,826,971	1,805,502

Other than the financial covenants and restrictive non-financial covenants contained in the loan agreements, TerraVest is not subject to any externally imposed capital restrictions.

The Board of Directors does not establish quantitative return on capital criteria for management. TerraVest intends to maintain a flexible capital structure that is consistent with its stated objectives and adjust it in the light of changes in economic conditions and the risk characteristics of the underlying instruments. In order to maintain or adjust its capital structure, TerraVest may, from time to time, acquire shares for cancellation in connection with a substantial issuer bid ("SIB") or a normal course issuer bid ("NCIB"), issue new shares, raise capital through various debt instruments or refinance current debt through instruments with different characteristics.

SHARE BASED PAYMENTS

TerraVest has a stock option plan for which options are granted to key management personnel to purchase common shares of TerraVest and a deferred share unit ("DSU") plan for non-employee directors.

The stock option plan and the DSU plan are "rolling" plans whereby the amount of common shares that may be reserved for issuance shall be up to 10% of the issued common shares outstanding from time to time. An aggregate of 2,168,569 common shares can be issued under the stock option and DSU plans, of which 1,551,841 were available for grant as at December 31, 2025.

{12}------------------------------------------------

The stock options outstanding and the weighted average exercise prices as at December 31, 2025 were as follows:

Expiry Date	Exercise price	Opening balance	Settled or exercised	Closing balance	Vested and exercisable	Unvested
Feb. 18, 2022 Feb. 18, 2032	\$24.49	316,500	-	316,500	316,500	-
Feb. 18, 2022 Feb. 18, 2032	\$26.99	33,333	-	33,333	-	33,333
Feb. 18, 2022 Feb. 18, 2032	\$29.49	66,667	-	66,667	-	66,667
Feb. 18, 2022 Feb. 18, 2032	\$31.99	100,000	-	100,000	-	100,000
Feb. 18, 2022 Feb. 18, 2032	\$34.49	100,000	-	100,000	-	100,000
		616,500	-	616,500	316,500	300,000
Weighted average exercise price		\$28.00	-	\$28.00	\$24.49

During the first quarter ended December 31, 2025, DSUs were granted, none were redeemed, and no stock options were granted, exercised or forfeited.

FINANCIAL INSTRUMENTS RISK

TerraVest is exposed to various risks in relation to financial instruments. The main types of risks are market risk, credit risk and liquidity risk. An analysis of these risks as at December 31, 2025 is provided below.

Market Risk

TerraVest is exposed to market risk, through its use of financial instruments, specifically to foreign currency risk, interest rate risk and commodity price risk.

Foreign Currency Risk

Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to Canadian or U.S dollar. TerraVest is subject to foreign currency risk for:

sales and operating expenses denominated in foreign currencies made by Canadian entities and certain U.S. entities; and
financial instruments denominated in foreign currencies in Canadian entities and certain U.S. entities.

TerraVest does not have a policy to hedge its foreign currency risk and manages its exposure to foreign currency risk by periodically entering into forward exchange contracts. Based on the financial instruments net balance denominated in foreign currencies as at December 31, 2025, a one-cent increase per unit of foreign currency exchange rates would have resulted in a favorable impact of \$226 on net income (favorable impact of \$140 for the year ended September 30, 2025). A one cent decrease per unit of foreign currency exchange rates would have had an impact of a similar magnitude but in opposite directions on net income.

Interest Rate Risk

TerraVest does not have a policy to hedge its interest rate risk and is exposed to interest rate risk arising from fluctuations in interest rates on revolving credit facilities and long-term debt at variable interest rates. TerraVest has interest rate swap agreements to cover the impact of future fluctuations in interest rates under which TerraVest receives interest on the notional amount at the 1-month CORRA rate in exchange for payment at a fixed rate, plus 150 to 300 basis points based on a prescribed ratio.

For the first quarter ended December 31, 2025, a 1% increase in the interest rate would have had an unfavorable impact of \$1,332 on net income (\$3,152 for the year ended September 30, 2025), calculated using the average outstanding balances during the period on revolving credit facilities and long-term debt at variable interest rates. A 1% decrease in the interest rate would have had an impact of a similar magnitude but in opposite directions on net income.

{13}------------------------------------------------

Commodity Price Risk

TerraVest is exposed to commodity price risk arising from certain raw material price fluctuations. TerraVest does not have a policy to hedge its commodity price risk and manages its exposure to raw material price fluctuations by periodically entering into commodity swap contracts.

TerraVest's exposure to fluctuations in commodity prices is indirect, as price variations may influence activity levels among customers of its portfolio businesses, which in turn affects demand for goods and services. This indirect impact cannot be quantified.

Credit Risk

Credit risk is the risk that a counterparty will fail to perform its obligations to TerraVest. TerraVest's credit risk comes mainly from accounts receivable and is mitigated through credit policies that limit transactions according to counterparties' creditworthiness, which is assessed by considering counterparties' financial position, past experience and other factors. In addition, a large majority of TerraVest's clients are well-established companies with a history of prompt payment. Accounts receivable amounts are presented on the consolidated statements of financial position net of the allowance for expected credit losses. In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due. The expected loss rates are based on the payment profile for sales based on historical credit losses. Trade receivables are written off when there is no reasonable expectation of recovery. Failure to make payments within 180 days from the invoice date and failure to engage with TerraVest on alternative payment arrangement, amongst others, may be considered indicators of no reasonable expectation of recovery. The credit risk on cash is considered negligible since cash is held in reputable financial institutions with high quality external credit ratings. TerraVest's maximum exposure to credit risk is \$198,869 as at December 31, 2025 (\$224,336 as at September 30, 2025).

As at December 31, 2025, 90% (93% as at September 30, 2025) of TerraVest's accounts receivable were less than 90 days past invoice date.

Liquidity Risk

TerraVest's objective is to maintain cash and cash availability to meet its liquidity requirements. TerraVest monitors its cash and trade receivable balances as well as cash flows generated from operations to meet its financial obligations. TerraVest also has access to various authorized revolving credit facilities to manage its liquidity needs. For a more detailed discussion on liquidity risk, refer to the section entitled "Liquidity and Capital Resources" in this MD&A.

SIGNIFICANT ACCOUNTING POLICIES

TerraVest prepares its financial statements in accordance with IFRS. TerraVest's accounting policies under IFRS are disclosed in Note 2 of TerraVest's audited consolidated financial statements for the year ended September 30, 2025.

CRITICAL ACCOUNTING ESTIMATES

The discussion and analysis of TerraVest's financial position and results of operations are based on its interim condensed consolidated financial statements, which have been prepared in accordance with IAS 34 Interim Financial Reporting. For information regarding the use of estimates and judgments, please refer to Note 3 of TerraVest's audited consolidated financial statements for the year ended September 30, 2025 and to Note 3 of TerraVest's interim condensed consolidated financial statements for the first quarter ended December 31, 2025.

{14}------------------------------------------------

CONTROLS AND PROCEDURES

As at December 31, 2025, TerraVest's Chief Executive Officer and Chief Financial Officer have certified that the design of the disclosure controls and procedures provides reasonable assurance that significant information relevant to TerraVest is reported to them during the preparation of disclosure documents, and that the design of the internal controls over financial reporting provides reasonable assurance regarding the reliability of the financial information and the preparation of the financial statements in accordance with IFRS. During the period covered by this report, TerraVest did not make any changes in internal controls over financial reporting that significantly affected or are reasonably likely to significantly affect TerraVest's internal controls over financial reporting.

Exception

TerraVest acquired Entrans in March 2025, LBT and Simplex in April 2025 and Tankcon in May 2025. Management has not yet completed its assessment of the design or operating effectiveness of their disclosure controls and procedures and internal controls over financial reporting.

The following table provides significant financial information of Entrans, LBT, Simplex and Tankcon as at and for the first quarter ended December 31, 2025:

	Entrans i)	LBT	Simplex	Tankcon	Total
	\$	\$	\$	\$	\$
Total assets	910,762	48,687	68,621	37,058	1,065,128
Total liabilities	134,872	29,646	38,374	10,572	213,464
Sales	114,090	9,095	20,206	5,531	148,922
Net income (loss)	(7,267)	(418)	587	1,029	(6,069)

i) Net loss includes amortization of intangible assets of \$13,427.

RELATED PARTY TRANSACTIONS

For detailed information on related party identity, relationship and transactions, please refer to Note 28 of TerraVest's audited consolidated financial statements for the year ended September 30, 2025.

RISK FACTORS

For a detailed discussion of the risk factors related to the businesses and to the structure of TerraVest, please refer to the AIF of TerraVest under the heading "Risk Factors", which is incorporated herein by reference.

ADDITIONAL INFORMATION

Additional information relating to TerraVest, including the AIF of TerraVest, is available on SEDAR+ at www.sedarplus.ca.