SOLAR PHOTOVOLAIC JOINT VENTURE PROJECT

3 Months Ended

Mar. 31, 2026

Solar Photovolaic Joint Venture Project

NOTE 6 – SOLAR PHOTOVOLAIC JOINT VENTURE PROJECT

On July 31, 2024, the Company entered into a Loan and Partnership Agreement with Horizons RES PE1 UG (haftungsbeschränkt) & Co. KG a German partnership (the “Partnership”), Solterra, and other lenders, under which the Company committed €1,560 thousands (approximately $1,716) loan for solar energy projects. The loan bears interest of 7% annually and matures upon the earlier of the sale of the Partnership or five years from the agreement date. The Company’s loan is secured by a lien on Solterra’s interests in the Partnership, and all loans from Solterra are subordinated. The lenders are entitled to 50% of the Partnership’s profits, with the Company entitled to 25% through one of several profit rights alternatives.

During 2025, the Company and the other lenders entered into several amendments and additional loan agreements in connection with the Germany project, pursuant to which the Company committed to provide additional funding, including €19 thousand under a bridge loan, €450 thousand under Addendum No. 2, and €210 thousand under an additional loan agreement dated December 24, 2025. Such additional amounts generally bear interest at 7% annually and are intended to support the development of the battery energy storage system and photovoltaic facility, including activities aimed at achieving Ready-to-Build status.

As of March 31, 2026, the Company has funded €1,500 thousands (approximately $1,733).

The Company’s interest in the Partnership was evaluated under ASC 810-10, and the Company determined that the Partnership is not subject to consolidation by the Company. Accordingly, the Partnership is not consolidated in the Company’s consolidated financial statements.

The Company elected to account for the Loan and Partnership Agreement under the fair value option in accordance with ASC 825. The Company estimated the fair value of the Loan and Partnership Agreement using a third-party appraiser and various assumptions such as, probability of completion of the project based on key milestones, scenarios for the expected project’s cash realization value (including expected power of the project, selling price per megawatt, and loan repayment dates). The projected net cash flows were discounted using an interest rate appropriate for similar projects. The result was adjusted to the probability for the completion of the project as of the valuation date. The interest rate was determined at 8.91% as of March 31, 2026. The Company calculated the Loan Agreement and the fair value of the Company’s interest in the Partnership and Loan amounted to €2,228 thousands (approximately $2,574) as of March 31, 2026.

On May 6, 2025, the Company, together with other investors, entered into a loan agreement with Soltra Renewable Energies Ltd. (the “Borrower”), an Israeli traded company, to finance the development of a battery storage project in Poland known as the “Pikozow Project.” Under the agreement, the Company extended a loan in the principal amount of €150 thousands (approximately $177).

In the event the project is sold to a third party not related to the Borrower during a 30 months term, the Company will be entitled to repayment of the principal plus a pro-rata share (15%) of 50% of the net profit from the sale, as defined in the agreement.

If the project is not sold by the end of the term of the loan, the loan will bear annual interest of 7%, and the total amount due (principal and interest) will be repaid at maturity. The agreement does not provide for early repayment.

The Company assessed its involvement in the Pikozow Project in accordance with ASC 810-10, Variable Interest Entities (VIE), and concluded that the Borrower does not meet the definition of a VIE. Accordingly, no consolidation is required.

NEXENTIS TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

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

NOTE 6 – SOLAR PHOTOVOLAIC JOINT VENTURE PROJECT (continued)

The Company elected to account for the loan agreement under the fair value option in accordance with ASC 825. The Company estimated the fair value of the loan using a third-party appraiser and various assumptions such as probability of the event the project would be sold to a third party as well as the probability that it would not be sold. The valuation incorporated two probability weighted scenarios, each discounted using a different interest rate reflecting the risk profile of the scenario. As of March 31, 2026, the fair value of the loan agreement was estimated at €177 thousand, approximately $204, based on discount rates of 19.61% and 18.96%.