Novra Technologies : Audited consolidated financial statements - Year 2025

About this update from Novra Technologies Inc.

CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2025 and 2024 (Expressed in Canadian Dollars) Table of Contents Independent Auditor's Report 3 Consolidated Statements of Financial Position 7 Consolidated Statements of Operations and Comprehensive Income (Loss) 8 Consolidated Statements of Changes in Shareholders' Equity 9 Consolidated Statements of Cash Flows 10 Notes to Consolidated Financial Statements: Note 1 - General Information 11 Note 2 - Material Accounting Policies 11 Note 3 - Critical Accounting Estimates and Judgments 20 Note 4 - Business Acquisitions 21 Note 5 - Financial Risk Management 22 Note 6 - Capital Management 24 Note 7 - Inventories 25 Note 8 - Financial Instruments 25 Note 9 - Equipment 27 Note 10 - Intangible Assets 28 Note 11 - Borrowings 29 Note 12 - Warranty Provision 31 Note 13 - Shareholders' Equity 31 Note 14 - Income Taxes 31 Note 15 - Revenue 33 Note 16 - Related Party Transactions 33 Note 17 - Depreciation and Amortization 36 Note 18 - Commitments and Contingent Liabilities 36 Note 19 - Debt Forgiveness and Finance Costs 37 Note 20 - Right-of-use Assets 37 Note 21 - Employee Benefits 37 Note 22 - SNAPS Convertible Loan Agreements 37 Independent Auditor's Report To the Shareholders of Novra Technologies Inc OPINION Baker Tilly HMA LLP 701 - 330 Portage Avenue Winnipeg, MB R3C 0C4 T: 204.989.2229 TF: 1.866.730.4777 F: 204.944.9923 [email protected] https://www.bakertilly.ca We have audited the consolidated financial statements of Novra Technologies Inc. and its subsidiaries (the "Company"), which comprise the consolidated statement of financial position as at December 31, 2025 and December 31, 2024, and the consolidated statements of operations and comprehensive income (loss), changes in shareholders' equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policy information. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2025 and December 31, 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards. BASIS FOR OPINION We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements VALUATION OF INVENTORY DESCRIPTION OF KEY AUDIT MATTER The Company records a provision for obsolete and slow-moving inventory, which requires significant judgment in identifying inventory items that may not be recoverable and in estimating net realizable value. These judgments are sensitive to assumptions regarding future demand and sales patterns and could materially impact inventory balances and cost of sales. As a result, this matter required significant auditor attention. The related judgments and estimates are described in Note 3, and the inventory disclosures are included in Note 7 of the consolidated financial statements. HOW THE KEY AUDIT MATTER WAS ADDRESSED IN THE AUDIT To address this matter, we evaluated management's process for identifying slow-moving and obsolete inventory, analyzed inventory trends including turnover, and performed substantive testing of net realizable value on selected inventory items. We assessed the reasonableness of key assumptions by considering historical sales patterns and AUDIT • TAX • ADVISORY Baker Tilly HMA LLP is a member of Baker Tilly Canada Cooperative, which is a member of the global network of Baker Tilly International Limited. All members of Baker Tilly Canada Cooperative and Baker Tilly International Limited are separate and independent legal entities. subsequent sales information, and we performed procedures to identify unusual transactions or significant changes in inventory levels during the year. RECLASSIFICATION OF INVENTORY ITEMS TO EQUIPMENT DESCRIPTION OF KEY AUDIT MATTER In the prior year, the Company reclassified inventory with a net realizable value at the date of transfer of $139 thousand. In fiscal 2025, depreciation expense of approximately $69 thousand was recognized on the reclassified assets. This matter required significant auditor attention due to the judgment involved in determining whether the assets met the definition of equipment, assessing the appropriateness of the reclassification across periods, and determining useful lives and depreciation following the transfer. The related disclosures are included in Note 9 of the consolidated financial statements. HOW THE KEY AUDIT MATTER WAS ADDRESSED IN THE AUDIT To address this key audit matter, we analyzed the assets transferred, inquired of management to know the reason for the transfer, assessed the net realizable value recorded by management for these assets and the remaining useful lives attached to the assets. We also ensured that the transfer has been appropriately approved by Senior Management. We also performed a recalculation of the depreciation charge for the current year based on the remaining useful lives attached to these assets. VALUATION OF INTANGIBLES DESCRIPTION OF KEY AUDIT MATTER The Company's intangible assets are subject to judgment in assessing recoverability and identifying indicators of impairment. The assessment requires management to apply estimates and assumptions regarding future performance and market conditions, which are inherently uncertain and could materially impact the carrying value of intangible assets. Due to the level of judgment and estimation uncertainty involved, this matter required significant auditor attention. The related accounting policies and judgments are described in Notes 2 and 3, and the quantitative disclosures are included in Note 10 of the consolidated financial statements. HOW THE KEY AUDIT MATTER WAS ADDRESSED IN THE AUDIT To address this matter, we evaluated management's impairment assessment by reviewing the underlying analyses and assumptions used to support recoverability. We assessed the consistency of assumptions with historical performance and relevant external information and considered whether indicators of impairment existed. We also analyzed changes in the carrying value of intangible assets during the year and considered subsequent performance information, including subsequent sales and forecasts, in evaluating the adequacy of management's conclusions and related disclosures. VALUATION AND PRESENTATION OF CONVERTIBLE LOAN DESCRIPTION OF KEY AUDIT MATTER On September 10, 2024, the Company entered into a convertible loan arrangement under which amounts advanced may be converted into common shares at a fixed conversion price of $0.34 per share. As at December 31, 2025, the Company had received $681 thousand, and the lender had elected to convert the outstanding amount; however, no shares had been issued as at year-end and the issuance remained pending. This matter required significant auditor attention due to the complexity of the contractual terms and the judgment involved in assessing the appropriate classification and presentation at the reporting date, including the timing of conversion and the completeness and clarity of related disclosures. The related disclosures are included in Note 22 of the consolidated financial statements. HOW THE KEY AUDIT MATTER WAS ADDRESSED IN THE AUDIT Our audit procedures included reviewing the convertible loan agreements and related amendments, confirming amounts advanced directly with the lender, and inspecting the status of regulatory approvals referenced in the disclosures. We evaluated management's presentation and disclosures at December 31, 2025 in light of the conversion election and the fact that shares had not been issued at year-end, and we assessed whether Note 22 appropriately described the status of the conversion and the nature of any uncertainties remaining at the reporting date. OTHER INFORMATION Management is responsible for the other information. The other information comprises: The information, other than the consolidated financial statements and our auditor's report thereon, included in the Annual Report, and the information included in the Management Discussion and Financial Analysis. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. We obtained the Annual Report and the Management Discussion and Financial Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard. RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company's financial reporting process. AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

View stock analysis, news, and events for Novra Technologies Inc.