NOTE 10 – INVESTMENT IN NONCONSOLIDATED AFFILIATE

On March 31, 2023, the Company entered into a Securities Exchange Agreement (the “ Securities Exchange”) with Plantify Ltd., pursuant to which each party agreed to issue to the other 19.99% of its issued and outstanding capital stock. The Securities Exchange closed on April 5, 2023.

In connection with the agreement, the Company executed a debenture in the amount of CAD1,500 thousands (approximately $1,124), bearing interest at 8% per annum and secured by a pledge of the shares of a Plantify subsidiary.

On September 7, 2023, the Company increased its holdings in Plantify through participation in a right offering. As of that date, the Company held approximately 23% of Plantify’s issued and outstanding common shares. The Company determined it had significant influence over Plantify and elected the fair value option for its equity method investment.

On April 2, 2024, the Company’s board of directors approved a Credit Facility of up to $250, bearing interest at 8% per annum, which was fully utilized by Plantify as of November 2024.

On December 5, 2024, the Company and Plantify completed a debt settlement agreement (the “Settlement Agreement”), whereby Plantify issued 2,420,848 of its common shares to the Company in full settlement of the outstanding Debenture and the utilized Credit Facility, increasing the Company’s ownership interest to approximately 65%.

Following additional share issuances by Plantify, including a private placement on December 20, 2024, a debt settlement with another lender, on January 12, 2025 and additional private placement during December 2025, the Company’s ownership interest in Plantify was reduced to approximately 23.55%.

As of December 31, 2025, there is no Active Market for Plantify’s common shares. Accordingly, the investment can no longer be measured based on Level 1 inputs in the fair value hierarchy. Given the lack of observable market data, and the deterioration in the financial condition of Plantify, including the insolvency of its operating subsidiary, the Company evaluated the fair value of Plantify. Based on such evaluation, the Company concluded that the investment should be fully written off as of December 31, 2025.

NEXENTIS TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)