Mr. Shane Dungey reports

SHARC ENERGY ANNOUNCES Q3 2026 FINANCIAL RESULTS AND RECORD $10.1M BACKLOG

Sharc International Systems Inc. has filed financial results for the three and nine months ended Sept. 30, 2026. All figures are in Canadian dollars and in accordance with IFRS (international financial reporting standards) unless otherwise stated.

Third quarter financial highlights:

• As of Oct. 30, 2026, subsequent to quarter-end, the company reported a sales pipeline of $13.6-million and sales order backlog of $10.1-million. These figures represent a decrease of 24 per cent to the sales pipeline and an increase of 87 per cent to the sales order backlog from the company's Aug. 25, 2026, disclosure. The combined sales pipeline and sales order backlog remains strong at approximately $23.6-million.
• Since the beginning of 2026, the company has secured approximately $10.6-million in Sharc Energy equipment orders, representing an increase of 212 per cent from the $3.4-million sales order backlog reported in the company's final disclosure of 2025. The orders span multiple geographic markets and end-use applications and reflect the continued maturation of the company's sales pipeline.
• Revenue for the three months ended Sept. 30, 2026 (Q3 2026), was $830,000, compared with $830,000 for the three months ended Sept. 30, 2025 (Q3 2025). The company continues to experience quarter-to-quarter revenue variability resulting from the timing of project milestones, production schedules, and equipment deliveries due to larger and more complex projects.
• Gross margin for Q3 2026 was 32.3 per cent, compared with approximately 39 per cent in Q3 2025. Gross margins continue to vary on product mix, project scope, geography and the stage of completion of individual projects.
• During Q3 2026, the company reported a net loss of $870,000 and an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $640,000, compared with a net loss of $740,000 and adjusted EBITDA loss of $540,000 during Q3 2025.
• Revenue for the nine months ended Sept. 30, 2026, was $1.6-million, compared with $2.7-million during the corresponding period of 2025. The company reported a net loss of $2.7-million and an adjusted EBITDA loss of $2.1 million, compared with a net loss of $2.5-million and adjusted EBITDA loss of $1.7-million for the first nine months of 2025.
• The company ended the quarter with $1.80-million of cash and negative working capital of approximately $90,000, compared with cash of $260,000 and negative working capital of approximately $170,000 at Dec. 31, 2025.

Fred Andriano, interim chief financial officer and chairman of the board of Sharc Energy, said: "The company strengthened its financial position during the first nine months of 2026 through the completion of a $2.5-million convertible debenture financing, increasing cash to approximately $1.8-million at Sept. 30, 2026. We also recorded significant growth in deferred revenue, reflecting customer advances received on future projects and providing improved visibility into future revenue conversion.

"As we continue pursuing larger commercial, municipal and infrastructure opportunities, quarterly results will continue to be influenced by project schedules and revenue recognition milestones. Our focus remains on disciplined capital management, liquidity preservation and the successful execution of customer projects."

Shane Dungey, interim chief executive officer and executive vice-chair of Sharc Energy, commented: "The third quarter reflected our continued focus on executing our commercial strategy and developing opportunities across the wastewater energy transfer market.

"Subsequent to quarter-end, we secured the largest purchase order in Sharc Energy's history through the City of Surrey District Energy Sewer Heat Recovery Project. The project represents an important addition to our order backlog and demonstrates the application of our technology in larger-scale district energy infrastructure. This project brings us to $10.6-million in secured equipment orders in 2026 across multiple end markets, which reflects the range of applications for our technology and our focus on converting sales opportunities into contracted projects. We remain committed to successfully executing these projects while aligning operational resources and working capital with project delivery schedules."

Q3 2026 key highlights and subsequent events

• Sales order backlog and sales pipeline. As of Oct. 30, 2026, the company reported a sales order backlog of approximately $10.1-million and a sales pipeline of approximately $13.6-million.
• Approximately $10.6-million of equipment orders secured in 2026. Since the beginning of 2026, the company has secured approximately $10.6-million in Sharc Energy equipment orders. Projects include two substantial Vancouver-based district energy systems, a major United States West Coast airport, a Calgary wastewater treatment plant, a multifamily senior housing retrofit on Staten Island, N.Y., and the Naval Postgraduate School's historic Hotel Del Monte in Monterey, Calif. These projects demonstrate both geographic and sector diversification across Sharc Energy's addressable markets.
• Record purchase order. Sharc Energy received a purchase order valued at more than $5.0-million from the City of Surrey for its District Energy Sewer Heat Recovery Project. The purchase order represents the largest customer order in the company's history and is expected to contribute to revenue beginning in the second half of 2027 and continuing into 2028 as project milestones are achieved.

For complete financial information for the three and nine months ended Sept. 30, 2026, please see the condensed consolidated interim financial statements and management discussion and analysis (MD&A) filed on SEDAR+.

About Sharc International Systems Inc.

Sharc International Systems is a world leader in wastewater-based thermal energy transfer. Sharc Energy's systems exchange thermal energy with wastewater, generating one of the most energy-efficient and economical systems for heating, cooling, and hot water production for commercial, residential and industrial buildings along with thermal energy networks, commonly referred to as district energy. Sharc Energy is publicly traded in Canada (Canadian Securities Exchange: SHRC), the United States (OTCQB: INTWF) and Germany (Frankfurt: IWIA).

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