Good morning, everyone. Welcome, and thank you for joining the Nanalysis Scientific Corp.'s Q4 2025 earnings call. I am Jake Bouma, an IR Consultant for Nanalysis. Today on the line discussing Nanalysis Q4 2025 financial results and company highlights are the company's President and CEO and Founder, Sean Krakiwsky, and the Interim CFO, Heather Kury. Following their remarks, we will open up the call to an analyst Q&A session. Before handing over the call to Sean and Heather, please note that information we present today could contain forward-looking information that is based on management's expectations, estimates, and projections. Please consider the risk factors, including those in the filings made by Nanalysis on SEDAR when reviewing this information. Also, all amounts discussed will be in Canadian dollars unless otherwise noted. With that, I would like to turn the call over to Nanalysis Interim CFO, Heather Kury.
Thank you, Jake, and thank you to everyone joining us on the call today for taking the time out of your day to allow us to share with you the progress we are making here at Nanalysis. I'll begin by walking us through the financial results for the fourth quarter, which ended December 31st, 2025. As Jake mentioned, all amounts are referenced in Canadian dollars. For the three months ended December 31st, 2025, the company reported consolidated revenue of CAD 10.7 million, a decrease of CAD 1.6 million or 13% from the comparative period in 2024. The majority of the decrease was within the Scientific Equipment segment, which was impacted by macroeconomic uncertainty and the shedding of our third-party resale businesses. Security Services revenue remained flat year -over -year, with flow through inventory revenue decreasing slightly, which is offset in cost of sales.
Gross margin percentage for product sales for the three-month period ended December 31st, 2025, was 56% versus 60% from the comparative period in 2024. This decrease was attributable to earlier period supply chain challenges, which required the company to utilize higher cost labor to meet its sales commitments. While gross margin for Q4 2025 was 4% lower compared to Q4 2024, gross margin for the 12 months ended December 31st, 2025, increased by 4% over the same period in the prior year due to continuous improvement programs within manufacturing. Gross margin percentage for Security Services for the three-month period ended December 31st, 2025, was 11% versus 16% from the comparative period in 2024, reflecting both revenue variability and cost structure dynamics associated with the company's largest contract, as well as the company's commitment to maintaining a high level of customer service.
The company is actively working with its customer to address these dynamics and remains confident in reaching a more sustainable, mutually beneficial operating arrangement going forward. Adjusted EBITDA for the three months ended December 31st, 2025, was CAD 1.2 million versus an adjusted EBITDA of CAD 1.8 million from the comparative period in 2024. Normalized net loss was CAD 729,000 for the three months ended December 31st, 2025, which is an increase of CAD 329,000 from the comparative period in 2024. This was primarily the result of a drop in Scientific Equipment sales in the quarter. With that, I'll turn the call over to our Founder and CEO, Sean Krakiwsky. Sean?
Thanks very much, Heather. Thanks to everybody for joining our call today. As Heather referenced, and as we mentioned in the press release summarizing our year-end financial results, we faced many challenges in 2025. I guess I would put our challenges into two buckets. The first bucket being related to the previous acquisitions that we had done, changes in management, shedding of businesses that were not deemed to be of future value for us, and so on. 2025 will be the last year that you hear me say we had to deal with certain challenges associated with past acquisitions. I'm very proud to say that we've managed those turbulent waters well, and we've removed the parts of our businesses that aren't going to contribute to value creation going forward.
Then we've polished up the things that we have acquired that are in fact going to contribute to value creation going forward. Couple of more specific examples of those things is that we inherited reseller businesses associated with Agilent equipment and also a European preclinical MRI company called Mediso. Throughout 2025, in sort of a gradual, orderly fashion, we stopped representing those companies. Those were low margin, low volume businesses for us. Now we're super focused on only selling our proprietary products. Of course, I'm referring to the Scientific Equipment segment of our business. Really happy to be able to focus in on our own products rather than representing others.
The second bucket of challenges that I guess we've had to deal with in 2025, I'll call them macroeconomic or geopolitical in nature, and those affected capital equipment budgets globally, and then some pretty significant supply chain challenges, in particular associated with rare earth metals and the magnets we use in our magnetic resonance products. Very happy to say that although that was a difficult challenge that created a lot of consternation for us, especially sort of in the third quarter and into the beginning of the fourth quarter, it's turned out to be kind of a blessing in disguise, most particularly with regards to its effect on our costs. We've been able to find alternative suppliers.
We've tackled some material sciences challenges associated with magnet composition and specific heavy rare earth element restrictions that have existed in China, and navigated those waters and come out of this with magnets that are much lower cost and still serve our purposes. Very proud of our team's efforts in that regard. Those were the things that we were dealing with in 2025. Maybe I'll now talk about some of the highlights associated with that. We have rebounded with regards to Adjusted EBITDA, and when you look at that fourth quarter number and you look at the year, it is emblematic of our potential going forward. We once again showed that we have very supportive shareholders, especially in these tough micro-cap equity markets. Our shareholders once again showed that they're supporting the company going forward, as is evidenced by our closing of our CAD 3.4 million equity raise.
We also have great relationships with various government agencies that are supporting growth of Canadian companies, especially Canadian companies that are exporters and manufacturers, as evidenced by the announcement that we were awarded CAD 1 million of non-dilutive, non-repayable monies to support our business going forward. Some aspect of that is retroactive, so you can kind of think of that as upfront cash, and I'd like to commend our Interim CFO for leading the charge on getting those monies. We continue to create great opportunities in the service side of our business.
We made a significant change in management there with putting Mark Tomlinson at the head of that business unit, and Mark has done a great job of stabilizing that and also leading some very serious discussions with the number one customer on that business unit to achieve higher gross margins, both from a contractual perspective, but also working out certain operational optimizations. Of course, there's also the potential for renewal on that contract as well. The first five-year term expires in mid-2028, but it is our expectation that we will have early renewal on that large contract.
We also have a significant investment in a Swiss company that is also a customer of ours, called QUAD Systems, and that leverages our electronics and our software that's in our beautiful benchtop products that are approximately CAD 100,000 items that we sell into pharma and food and petrochemical and polymer companies, and so on, and leverages it into the larger magnetic resonance analyzers, which are used for things like virology research with complex proteins and analysis of human blood and urine in the metabolomics field, and so on. Really proud of that partnership and investment, and they've made significant progress over the last year, starting to make some significant contract wins in that area, which wasn't the case in the past. Proud of that activity.
Then we've also continued to make progress with licensing opportunities and so on with that same technology, but in the clinical MRI space as well with partners such as IMRIS in the United States. All in all, a challenging year, but one in which we continue to make progress, continue to move towards our collective vision, and I'd like to thank all of our employees and all of our shareholders for supporting us throughout 2025. With that, I'd like to turn it back over to Jake and also open up the floor for Q&A.
Thanks, Sean. If anybody has a question, just please use the Raise Hand function, and we'll let you into the queue. All right, I'm not seeing any questions there, so we might wrap it up. If there's any questions that come up, please feel free to reach out to us directly. We'd be happy to set up a further call or speak to you at any time.
Okay. Well, thanks everybody for joining the call, and I look forward to future discussions.