edgeTI CEO
Letter to Shareholders
October 13, 2026
Growth Momentum and the Demand Curve Behind 500 Critical Loops
October 13, 2026 | A letter from Jason Nichols, Chief Executive Officer
Dear Shareholders,
Our recent announcements describe a company that is growing quickly while working through a financial reset. Read one release at a time, they can look like a series of unrelated events. Read together, they describe a single plan. I want to lay that plan out in full: what we are building, what the numbers already say, how the balance sheet gets reset, and where our platform is resonating with prospects – today and over the next four years.
What the numbers already say
Our second quarter was the strongest in the Company’s history on the measures that matter most to an operating business: revenue, gross margin and the share of that revenue coming from U.S. defense customers.
| Metric | Result | Change |
|---|---|---|
| Q2 Revenue | US$ 1.96 million | +380% year over year; +16% quarter over quarter |
| 1H 2026 revenue | US$ 3.65 million | +211% year over year |
| Q2 U.S. segment revenue | US$ 0.96 million | +135% year over year |
| Q2 Gross profit and gross margin | US$ 1.32 million and 68% | US$ 1.1 Million increase in Gross profit Gross margin up 21% |
| 1H Operating loss | US$ 2.7 million | Slightly under year over year despite US$ 0.4 million in higher share-based expenses |
| 1H Finance costs | US$ 1.2 million | Finance cost increased 234% over prior period due to interest on convertible: debentures, Salem debt, and related party notes. |
| Insider ownership | 38.9% | Director and Officer financial interests align with those of outside shareholders. |
Source: Q2 2026 restated interim financial statements and MD&A filed on SEDAR+, October 9th, 2026; Information Circular, August 10th, 2026
The message in that table is simple. Growth is not our problem. The cost of carrying legacy debt is. Nearly all the year-over-year increase in our first-half net loss is finance cost and one-time impairment of the Austal intangible assets, not operating expenses. That is why the balance-sheet reset described below is the single most important thing we can do for shareholders in the next two quarters, and why it is sequenced the way it is.
Three further signals from the past ninety days deserve to be read together:
- September 9 – edgeTI was recognized in the Gartner Hype Cycle for Managing Operational Technology, 2026. Gartner research is read by the people who write enterprise and defense technology budgets.
- September 22 – edgeTI placed third among 10 finalists culled from more than 200 applicants in the ATI Horizons Maritime Manufacturing Innovation Challenge, a competition organized around the U.S. Navy’s advanced manufacturing strategy. We were one of 10 companies invited to present.
- September 25 – our cofounders, Lotus Domaine LLC, rejoined the Board at the AGSM. The people who built and launched the Company’s platform looked at this plan and chose to put their time behind it.
Our refined focus and vision
edgeTI exists to actively mitigate the consequences of inaction and poor decisions – in the face of opportunities as well as threats.
In defense, a decision made too late, or made without the full picture, can mean mission failure, degraded readiness, higher cost and sometimes loss of life. These consequences are just as real inside a single military branch as they are across joint forces and multi-nation alliances. In every case, the same people – we call them context heroes – are repeatedly held accountable for assembling the full picture from systems they do not own and cannot merge.
Our flagship platform, edgeCore™, spans those discrete systems to build context and take action rapidly, repeatably and with a record – so the context heroes are no longer the last to know.
As an enduring defense-technology innovator, our capabilities extend naturally into the industrial base that supports the warfighter: manufacturers, supplier exchanges and infrastructure operators. They have already been honed in commercial operations at the level of a division, a company and a multi-company enterprise. Application logic, process workflows and data ontology combine into a repeatable method that keeps a ship on schedule, an assembly line at rate and a grid in balance.
Our long-range goal is audacious and countable: to be engaged in 500 critical loops by 2030. A loop is a named operation in which we help an organization sense what is happening, decide, act and record the evidence. It might be a fleet, a shipyard, a supply network, a plant or a squadron.
What a loop is worth — and why the count matters
Shareholders have asked a fair question: why count loops rather than contracts? Because a loop is the unit at which our revenue, our cost and our competitive advantage all compound. Each loop moves through four stages, and revenue grows at every stage while our cost to deliver falls.
| Stage | What happens | Commercial form |
|---|---|---|
| 1. Connect | edgeCore is engaged as the integration and data-brokerage layer across the systems a named operation already runs. Weeks, not years, because data is reached where it lives rather than migrated. | Integration and configuration services; initial platform subscription. |
| 2. Operate | The operation runs on the loop daily. Users, systems and workflows accumulate. Decisions are arbitrated, bounded, monitored and recorded. | Recurring platform subscription, scaled to users, systems and workflows. |
| 3. Extend | Adjacent workflows and systems are added: a supplier exchange gains new suppliers; a yard adds planning, quality and maintenance; AI agents are brought inside the governed loop. | Subscription expansion plus applications from the library. |
| 4. Replicate | The same loop template is deployed at the next yard, fleet, plant or allied partner. The application logic, process workflow and ontology are reused, so the next loop costs a fraction of the first. | New loop at higher margin — the demand curve steepens. |
To give shareholders a sense of scale: if a mature loop carried annual recurring platform revenue in the range of US$250,000 to US$350,000, 500 loops would represent an annual platform revenue base of US$125 to 175 million. This is an illustration of what the goal implies, not a forecast or financial guidance. Loop economics will vary widely by branch, mission and scope, and the count of loops in 2030 will depend on financing, procurement cycles and execution.
The US$1.2 million of Austal USA contracts announced on June 15, 2026, are what Stage 1 and Stage 2 look like in practice: edgeCore engaged as the secure integration and data-brokerage layer for Digital SEA and the work at the Navy’s Additive Manufacturing Center of Excellence. Digital SEA was created to connect the Navy, original equipment manufacturers, shipbuilders and qualified additive-manufacturing suppliers through one secure ecosystem. We believe every supplier, OEM and program onboarded to that exchange is likely to bring more brokered data, more governed workflows and more varied users – Stage 3 – within an ecosystem the Navy itself is working to grow. Those contracts are the starting point of a relationship we expect to deepen, not its full size.
Our role in AI-enabled operations
The categories for defense tech and AI are crowded and noisy. Being clear about ‘what we are not’ is the fastest way to explain what we are.
We are not an AI company. We do not build chips or foundation models. We help customers coordinate the people, systems and AI models they choose. On every loop that means four actions:
- Arbitrate – when two plans collide, decide which goes ahead, or escalate to a person with authority.
- Bound – set what each agent may see, touch and do, under rules the customer owns.
- Monitor – watch the outcome, not just the output, and stop what drifts.
- Record – keep a record of every decision with its source, its authority and its result.
The risk we address is easy to picture. Think of a shipyard with two AI agents, each correct on its own terms. One optimizes the maintenance schedule; the other optimizes production. At 2 a.m. both want the same dry dock and the same weld crew. Each rewrites the other’s plan, then rewrites it again. Parts get ordered twice. The crew receives competing instructions. By the morning shift the ship has missed its window, and nobody can say which decision caused it. That is the cost of AI without a human on the loop. edgeTI resolves those conflicts, enforces customer-defined rules and preserves the decision record. Final authority remains with the accountable person. As defense customers move from AI pilots to AI in production, this governance layer moves from optional to mandatory – and that is a demand driver, not a feature.
We are not a data repository. We do not ask customers to move their data into yet another store, and we do not add data debt or a migration tax. We reach data where it already lives, shape it into operational context in a way that can be repeated and inspected, and never take custody of it. The customer keeps their data, their systems, their judgment and their freedom to leave. In defense procurement, that posture is not a slogan; it is what makes us deployable inside classified and multi-vendor environments where a data-custody vendor cannot go.
The Austal technology transfer: what we acquired and what it is doing
edgeCore is our flagship platform. What sets us apart in defense is what it now carries.
In January 2026 we acquired digital assets from Austal. Those assets gave us three things that take years to build from scratch: industrial applications and the logic inside them; the process and workflow of a working shipbuilder; and a data schema and ontology for how ships, parts, suppliers and work fit together.
As announced on October 2, 2026, we have stopped trying to reach a valuation of these assets that meets IFRS audit criteria, because the information an auditor would need sits inside classified contracts and cannot be shared under their confidentiality terms. We have therefore recorded a non-cash impairment of intangibles and goodwill of approximately $5.1 million, reducing their carrying value to zero. That changes a number on our Statement of Financial Position or Balance Sheet. It does not change what the assets are, that we own them, or how we use them. Separately, approximately A$950,000 of project work in Australia that we had expected to deliver is now being delivered directly by Austal Australasia. We would rather have kept that work, and we have adjusted our Australian cost base accordingly; the U.S. relationship, where the strategic value lies, is unaffected.
Those capabilities are already at work as we shape them into reusable loops for specific military branches and their industrial supply chains:
- Digital SEA. The Digital Secure Exchange for Additive is a secure data-sharing platform developed by Austal USA that uses edgeCore as its integration and data-brokerage layer to accelerate 3D printing and additive manufacturing across the U.S. Navy’s submarine and maritime industrial base.
- The U.S. Navy’s Additive Manufacturing Center of Excellence (AMCoE). Located in Danville, Virginia and operated by Austal USA, the AMCoE is the Navy’s flagship for additive manufacturing supporting the construction of next-generation ships and boats. Both engagements are part of the US$1.2 million of Austal USA contracts announced on June 15, 2026.
- Independent validation. At Defense TechConnect in September, the sponsor’s opening address noted that the ATI Horizons Maritime Manufacturing Innovation Challenge drew more than 200 applicants competing on technologies for the U.S. Navy’s advanced manufacturing strategy. edgeTI was one of 10 finalist presenters and received the 3rd-place award, alongside Sonibel Instruments (real-time weld-defect detection) and Phase3D (in-situ inspection for the digital thread) – two technologies that would be part of an exchange like Digital SEA and Digital Shipyard.
Where demand comes from: the organic curve
Demand for a governed loop does not arrive one contract at a time. It arrives in rings, each wider than the last, and each one reusing what was built for the ring inside it.
| Ring | What drives demand |
|---|---|
| 1. Deepen — the Navy additive ecosystem | Digital SEA and the AMCoE are designed to grow — more qualified suppliers, more OEMs, more programs and more part families flowing through one secure exchange. Each addition is brokered through edgeCore. Expansion here is usage-driven and occurs inside relationships we already hold. |
| 2. Replicate — the maritime industrial base | The ontology of ships, parts, suppliers and work applies to every yard, public or private. The U.S. Navy is investing for decades in its public shipyards and in the submarine and surface industrial base; our Defense TechConnect panel on digital twins for public shipyard operations was aimed squarely at this ring. The same loop template, deployed again, at a fraction of the first deployment’s cost. |
| 3. Extend — other branches and allied forces | A loop does not care whether the asset is a ship, an aircraft or a depot. The Austal portfolio includes aviation planning and lifecycle-management applications, and allied shipbuilding programs share the same supplier-exchange problem the Navy is solving today. Joint and multi-nation operations are where the “systems they do not own and cannot merge” problem is most acute. |
| 4. Vertical — industrial manufacturers, exchanges and infrastructure | The commercial operations where edgeCore was first honed — divisions, companies and multi-company enterprises — face the same consequences of inaction, measured in dollars rather than readiness. Entry is earned through applied research with customers carrying real operational risk. |
Three structural forces push the whole curve upward. First, sustained multi-year U.S. investment in naval shipbuilding and the defense industrial base, where the bottleneck is coordination across suppliers rather than capital. Second, the Department of Defense’s shift from AI experimentation to AI in production, which creates a requirement – not a preference – for arbitration, bounds, monitoring and a decision record. Third, the Navy’s own additive-manufacturing strategy, which exists to shorten supply chains and is only as fast as the data exchange underneath it. As the library of applications, process logic and ontology grows, our cost to stand up the next loop falls while the value of each loop rises. That is what we mean when we say the demand curve steepens.
The inorganic curve: acquisitions that add loops
Moving into a new industry or a new branch takes more than a sales team. Each has its own vocabulary, rules and consequences. We will earn entry in two ways: applied research with customers who carry real operational risk, and targeted acquisition of capabilities, know-how and customers who benefit from reducing the consequences of inaction and poor decisions.
Our acquisition discipline is specific. According to our business strategy, every transaction must:
- Add to the library – applications, process logic or ontology that make the next loop cheaper to deliver;
- Bring customers with named operations that can become loops, so that acquired revenue becomes platform revenue;
- Fit our posture – no custody of customer data, final authority with the accountable person; and
- Be accretive in loops per dollar, not simply in revenue.
The Austal transaction was the template: for approximately 6 million shares we acquired application logic, shipbuilder workflow and a maritime ontology that are now at the center of the U.S. Navy’s additive supply chain. We are evaluating opportunities now. We will announce transactions when they are agreed, not before, and we will not pay for growth that does not add loops.
I came to edgeTI because I have seen what happens when the people responsible for a critical operation are the last to know. The technology to fix that exists today. What has been missing is a company disciplined enough to put it to work without asking customers to give up control of their data or their judgment. That is the company we are building, and it is why I am here.
Addressing your concerns directly
Quarterly reporting, combined with a flurry of separate releases, makes it hard to see where the Company stands at any one moment – especially when the facts arrive without the reasons behind them. Here are the reasons.
Working capital and debt. To carry out this strategy we raised working capital through convertible debentures in December 2025. That money bridged our operating expenses. Until the debentures are settled, they accrue interest; once settled, they become equity. The Australian setback increased pressure on cash flow, so we moved quickly: on October 2 we announced a US$1.0 million payment to Salem, reducing that principal to approximately US$989,000 with the final payment deferred to the earlier of a U.S. listing or February 15, 2027; an extension of the three related-party notes (approximately US$1.5 million including accrued interest) to the earlier of a U.S. listing or June 30, 2027; and an increase in the Salem warrant repurchase option. In total approximately US$2.9 million of payments due this year have been deferred. Separately, the note held by Jacques Jarman, approximately US$85,000, will be extinguished before its October 30 maturity.
Our balance sheet will look worse before it looks better – and you should know that now. Our third-quarter statements will carry approximately $5.1 million non-cash impairment, continued interest accrual on the debentures and notes, and the going-concern note that our auditors are required to include until a financing closes. None of that is new money leaving the business, and none of it changes the plan. The exit from this period is a listing event at which the remaining Salem debt is paid, the related-party notes, the convertible debentures and the Salem warrant convert to equity, and the Company holds fresh working capital. A business growing revenue at the rate shown above, with no legacy debt, is a very different picture from the one the Q3 statements will show in isolation. We are asking you to look at the sequence, not the snapshot.
Australia. Approximately A$950,000 of project work we had expected to deliver is now being delivered directly by Austal Australasia. We have resized our Australian cost base to match. The assets we acquired, and the U.S. relationships built on them, are unaffected.
Closing
Thank you to our customers for trusting us with mission-critical work, to our employees for delivering through a demanding period, and to our Board and shareholders for their continued support. If you remember four things from this letter, make them these:
- Growth is already here. Revenue up 380% year over year, gross margin up 19%, U.S. defense revenue leading. Our challenge is the cost of legacy debt, not the business.
- Our strategy is clear. We aim to reduce the consequences of inaction and poor decisions by governing the loop – not by selling AI or storing data – and we are building toward 500 critical loops by 2030.
- Our balance sheet has a defined path. Approximately US$2.9 million of debt payments has been deferred to 2027 with conversion options that align with convertible debentures, which convert after a U.S. listing.
- Demand compounds. The applications, process logic and ontology we own are already inside the U.S. Navy’s advanced-manufacturing ecosystem and Austal USA’s supplier exchange. Every loop lowers the cost of the next, and acquisitions add to the library. The current contracts are the entry point.
We will keep you informed as we move forward.
Jason Nichols
Chief Executive Officer
Edge Total Intelligence Inc.
Cautionary note regarding forward-looking statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These include statements about the Company’s strategy and goals, including the goal of being engaged in 500 critical loops by 2030 and the illustrative scale of that goal; a potential share consolidation; the expected extinguishment, deferral or conversion of the related-party notes, the convertible debentures, the Salem debt and warrant and the Jarman note; future financings and their use of proceeds; the expected composition of the Company’s balance sheet ; the use and development of acquired assets; the Austal relationship and the expected expansion of Digital SEA and related engagements; demand for the Company’s platform; planned acquisitions and expansion into other branches, and allied forces and vertical industries. Forward-looking statements are based on management’s current assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. These include the Company’s ability to raise additional financing on acceptable terms, or at all; the material uncertainty about the Company’s ability to continue as a going concern disclosed in its financial statements; customer and partner concentration, including reliance on Austal; long and unpredictable government and defense procurement cycles; competition and technology change; regulatory and exchange approvals; and the other risk factors in the Company’s continuous-disclosure filings available on SEDAR+. Readers should not place undue reliance on forward-looking statements, which speak only as of the date of this release. The Company assumes no obligation to update them except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Origin
Edge Technologies Inc. began as a specialized developer of custom operational systems, built to serve rigorous demands across the military, intelligence, critical infrastructure, banking, and aviation sectors. Over time, the company synthesized this operational expertise and a growing repository of bespoke systems into two repeatable solutions: AppBoard and enPortal. In 2018, these applications were consolidated into a single, unified offering: the edgeCore platform. Transitioning into the public markets, the company rebranded as Edge Total Intelligence Inc. and edgeTI by logo in January 2022 following a reverse takeover (RTO) with a Canadian Capital Pool Company, officially listing on the TSX Venture Exchange (TSXV: CTRL).
Insiders as at August 10, 2026
38.9%
| Ownership | Name | Shares |
|---|---|---|
| 26.5% | Lotus Domaine LLC | 23,721,440 |
| 5.75% | James Barrett | 5,139,467 |
| 4.36% | Seth Kay | 3,900,000 |
| 1.05% | Edward Mede | 942,000 |
| 0.96% | Eric Slater | 854,666 |
| 0.24% | Jason Nichols | 213,000 |