Mr. Sean Krakiwsky reports

NANALYSIS PROVIDES FOURTH QUARTER PREVIEW (UNAUDITED)

Nanalysis Scientific Corp. has provided an estimate of Q4 2024 unaudited revenue, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and has highlighted some other recent business accomplishments. These unaudited numbers may change materially before filings in April.

Chief executive officer Sean Krakiwsky states: "We are pleased with the way we closed 2024, particularly with regards to positive adjusted EBITDA of over $1.0-million on revenue of at least $11-million for the three-month period. This represents growth of at least $1.2-million in revenue and at least $1.8-million in adjusted EBITDA over Q4 2023. In addition, the significant improvements, both on the revenue and cost side of the ledger, have resulted in positive operating and free cash flow in 2024. For the last six quarters, since meaningful revenue has commenced in our airport security services business, we've been focused on increasing adjusted EBITDA and generating positive cash flow. A chart in the original version of this release illustrates the progress that the company has made in generating adjusted EBITDA over the past six quarters.

"With continued strength in our Benchtop NMR product line, the growth trajectory of the company's airport security maintenance project, and cost-cutting measures that were begun in 2023 and will continue through to the end of 2025, we are meeting our corporate objective of generating and growing positive EBITDA and will continue to do so going forward."

Financial and operational highlights:

• New adjusted EBITDA record: Q4 2024 revenue will be at least $11-million and adjusted EBITDA will be at least $1-million, driven by expansion of security services related to the company's airport maintenance project, as well as continued strength in Benchtop NMR sales.
• Co-published study demonstrating efficacy of benchtop NMR for quality control with the United States Pharmacopeia (USP): The study concluded that Benchtop NMR is efficacious for quality control of active pharmaceutical ingredients (API) paving the way for use in pharma/biotech quality control and helping establish the value proposition to do so.
• 100 MHz (megahertz) Benchtop NMR product: In Q4, the company sold 15 100 MHz Benchtop NMR units, the highest number or 100 MHz units in a quarter since the company cleared its backlog in 2022. This drove continued strength in Benchtop NMR revenue. Customer satisfaction is high, and the company continues to seek value-added partnerships and new software applications to drive growth.
• Consistent revenue in security services business: The company achieved revenue of approximately $26-million in 2024, including approximately $5-million in parts flow through. At the beginning of 2024, gross margin percentage in this business was still negative, and rose to positive double-digit gross margins by the end of the year. The company must continue to make gross margin improvements in this business to achieve corporate objectives.
• New patent grants: The company continues to add to its IP portfolio with two important U.S. patents associated with the company's Benchtop NMR magnet and software platform. Among other things, these patents address fundamental materials science challenges associated with creating an accurate and stable magnetic field at 2.4 Tesla, as well as being able to identify and quantify particular "hidden" compounds in samples. Patent numbers are US12,153,108B2 (granted) and US20230168323A1 (allowed, soon to be granted).

Outlook

The company will be making announcements in Q1 2025 regarding its Benchtop NMR technology platform and new products, in association with two important exhibitions in Boston and San Diego in March.

The company continues to innovate in the area of magnetic resonance products and is entrenching its leadership position in Benchtop NMR, in particular. In its services business, the company is in the beginning stages of enterprise resource planning (ERP) implementation for better operational control. For the company's ERP implementation, it is taking a modular approach, with several phases. Ultimately, these tools will allow the company to continue to expand profit margins, enhance performance and grow revenue.

In 2024, while company generated positive EBITDA and cash flow, after tax net income (which includes non-cash charges) was still negative, and will be quantified in the company's 2024 financials to filed in April. Going into 2025, the company is focused on understanding the potential U.S. tariff implications and have been contingency planning. In terms of the company's business internally, it expects to deliver substantial positive EBITDA growth, and also continued positive operational and free cash flow: This is the company's core objective for this year.

About Nanalysis Scientific Corp.

Nanalysis Scientific operates two primary business segments: scientific equipment and security services. Within its scientific equipment business is what the company terms "MRI and NMR for industry." The company develops and manufactures portable nuclear magnetic resonance spectrometers or analyzers for laboratory and industrial markets. The NMReady-60 was the first full-feature portable NMR spectrometer in a single compact enclosure requiring no liquid helium or any other cryogens. The company has followed up that initial offering with new products and continues to have a strong innovation pipeline. In 2020, the company launched its 100 MHz device, the most powerful and most advanced compact NMR device ever brought to market.

The company's devices are used in many industries (oil and gas, chemical, mining, pharmaceutical, biotechnology, agrochemicals, law enforcement, flavour and fragrances, and more) as well as numerous government and university research labs around the world. The company continues to exploit new global market opportunities independently and with partners. With its partners, the company provides scientific equipment sales and maintenance services globally.

In 2022, the company was awarded a five-year, $160-million contract to provide maintenance services for passenger screening equipment in Canadian airports. This has resulted in the expansion of the company's security services business. The company is providing airport security equipment maintenance services in each province and territory of Canada. In addition, the company provides commercial security equipment installation and maintenance services to a variety of customers in North America.

We seek Safe Harbor.