Mr. Evan Gappelberg reports

NEXTECH3D.AI DIVISION ACHIEVES PROFITABILITY, SIGNALING OPERATING LEVERAGE, MARGIN EXPANSION AND ACCELERATING ENTERPRISE MOMENTUM

Krafty Labs, a Nextech3D.AI Corp. division acquired in January, 2026, achieved profitability in February, 2026, its first full month of operations following the acquisition. The company also reported continued progress in operating efficiency and margin expansion, reinforcing management's belief that Nextech3D.AI is advancing toward cash-flow positive operations in 2026, subject to execution and market conditions.

In February, 2026, Krafty Labs generated approximately $130,000 in revenue, delivering a 66-per-cent gross margin, or approximately $85,000, and a net margin of approximately 55 per cent, or $71,000. Management believes this performance validates the strength of the underlying business, the quality of the acquisition and the operating leverage available within Nextech3D.AI's platform-driven model.

"The strength and depth of our customer base -- hundreds of Tier 1 blue-chip accounts alongside a rapidly expanding enterprise pipeline -- gives us increasing confidence in the scalability of our platform," said Evan Gappelberg, chief executive officer of Nextech3D.AI.

"Krafty Labs achieving profitability in its first full month postacquisition demonstrates how scale, margin expansion and operational discipline are coming together. With this momentum, we believe Nextech3D.AI is building a clear and achievable path toward cash-flow positivity in 2026."

Platform at scale

Nextech3D.AI operates a platform-centric AI (artificial intelligence) technology model designed to support multiple solutions across event technology, spatial computing and enterprise deployments. Unlike single-product SaaS (software-as-a-service) models, the company's platform is architected to capture value across multiple customer entry points, use cases and expansion paths.

Management believes this structure enables Nextech3D.AI to efficiently onboard customers, expand relationships over time, and support increasingly complex enterprise and government deployments -- including AI-driven matchmaking and engagement solutions -- while diversifying revenue streams and reducing reliance on any single customer or product.

Estimated annual recurring revenue and margin profile

Based on existing customer contracts and prior-year activity, Nextech3D.AI estimates total annual recurring revenue (ARR) of approximately $3.0-million associated with its current customer base. While not all of this revenue is expected to be recognized in 2026, management believes this ARR profile reflects the strength, scalability and durability of the company's recurring revenue model.

Importantly, this ARR is generated from a favourable mix of high-margin platform components operating at approximately 95-per-cent gross margin and services operating at approximately 66-per-cent gross margin, which management believes positions the company to achieve a blended gross margin of approximately 80 per cent in 2026. As this high-quality recurring revenue base continues to scale, management believes the resulting operating leverage supports profitability momentum and reinforces the company's path toward cash-flow positivity.

Customer composition and land-and-expand strategy

The company's ARR is anchored by hundreds of Tier 1 blue-chip customers, providing a stable and diversified revenue foundation, while a fast-growing pipeline of Tier 2 and Tier 3 enterprise customers continues to increase average deal sizes and platform engagement. This dynamic reflects Nextech3D.AI's land-and-expand strategy, supporting sustained adoption, improving revenue quality and long-term platform monetization.

Expanding enterprise engagement

Nextech3D.AI continues to see growing adoption of its AI-powered enterprise engagement platform across associations, enterprises and large-scale event organizers. Customers utilize solutions for registration, ticketing, floor plans, AI-driven matchmaking, audience engagement, analytics and related services.

Management believes the early profitability of Krafty Labs further demonstrates the company's ability to integrate accretive acquisitions, enhance platform capabilities and improve operating efficiency as the business scales.

About Nextech3D.AI Corp.

Nextech3D.AI is building an AI-powered enterprise engagement operating system for the global events and experiences economy. The company provides AI infrastructure for real-world experiences, enabling organizations to manage events, physical spaces and audience engagement through intelligent software platforms.

Nextech3D.AI serves over 500-plus customers, including small businesses and Fortune 1000 enterprises, through its ecosystem of platforms including Eventdex, Map D and Krafty Labs, as part of its strategy to consolidate the fragmented event technology industry into a unified AI platform.

The company also utilizes blockchain technology as a fraud-resistant verification and certification layer, supporting applications such as blockchain-based ticketing, credential verification and digital event accreditation.