Acceleware : Quarterly Report - MD&A (Q3 - 2023)

ACCELEWARE LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023

This management's discussion and analysis of financial condition and results of operations ("MD&A") should be read together with Acceleware Ltd.'s ("Acceleware" or the "Company") unaudited condensed interim financial statements and the accompanying notes for the nine months ended September 30, 2023, which were prepared in accordance with International Financial Reporting Standards ("IFRS"), and the audited annual financial statements, accompanying notes and MD&A for the year ended December 31, 2022. Additional information relating to the Company is available on the SEDAR+ at www.sedarplus.ca under Acceleware Ltd.

This MD&A is presented as of November 21, 2023. All financial information contained herein is expressed in Canadian dollars unless otherwise indicated.

FORWARD LOOKING STATEMENTS

Certain statements contained in this MD&A constitute forward-looking statements. These statements relate to future events or the Company's future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believes" and similar expressions. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this MD&A should not be unduly relied upon by investors. These statements speak only as of the date of this MD&A and are expressly qualified, in their entirety, by this cautionary statement.

In particular, this MD&A may contain forward-looking statements, pertaining to the following:

• the expectation of Acceleware's ability to continue operating as a going concern, fund its operations through the sale of its products and services, and access external financing when required;
• the future growth prospects for radio frequency ("RF") heating technology for heavy oil and oil sands based on technical and economic feasibility analyses and testing performed to date;
• the expectation that RF heating technology can be economically applied to industrial heating and drying applications;
• the patentability of concepts developed through RF heating research and development ("R&D") efforts;
• the expectation that the positive economic and technical analyses and testing to date will be reinforced by future results of subsequent testing of the RF heating technology;
• the successful completion of the workover for the RF heating technology at Marwayne, Alberta (the "RF XL Pilot");
• potential benefits of the Company's software to customers, including cost savings and increases to cash flow and productivity;
• oil and natural gas commodity prices;
• advantages to using Acceleware's products and technology;
• the demand for new products currently under development at the Company;
• ease and efficiency of implementing Acceleware's products; and
• supply and demand for Acceleware's primary software products.

1

With respect to forward-looking statements contained in this MD&A, the Company has assumed, among other things:

• that the future revenue and resulting cash flow expected by the Company's management ("Management") and ability to attract new financing will be sufficient to fund future operations - this assumption being subject to the risk and uncertainty that the Company may not generate enough cash flow from operating activities to meet its capital requirements and that the Company may not be able to secure additional capital resources from external sources to fund any shortfall. Operating cash flow may be negatively affected by general economic conditions, increased competition, increased equipment or labour costs, and adverse movements in foreign currencies.
  Should the Company experience a cash flow shortfall from operating activities, Management's contingency plan may not be sufficient to reverse the shortfall;
• that industry and government interest in reducing greenhouse gas ("GHG") emissions, reducing industrial water use, and minimizing land disturbance remains constant or increases;
• that the long-term oil and natural gas commodity price trend and its effect on the Company's products, services, and R&D efforts will be manageable;
• that the long-term effect of any sentiment, law or policy regarding future investment in new heavy oil or oil sands projects will be manageable;
• that the analyses coupled with lab and field testing that the Company has performed to date regarding the technical and economic feasibility of RF heating technology for heavy oil and oil sands will be confirmed in future pilot testing and in commercial products;
• that the analyses coupled with lab testing that the Company has performed to date regarding the technical and economic feasibility of RF heating technology for industrial heating and drying applications will be confirmed in future field testing and in commercial products;
• that the Company will maintain all regulatory approvals required to carry out the pilot testing of its RF heating technology at the RF XL Pilot;
• that the RF heating concepts developed by the Company are unique, novel and non-infringing of intellectual property owned by others;
• that the Company will be able to maintain sales of its software products and services which is subject to the risks that sales in core vertical markets may be negatively affected by general economic conditions, and that the Company's R&D efforts may be unable to develop continuous improvements; and
• that the Company will be able to withstand the impact of increasing competition.

The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and elsewhere in this MD&A.

Investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. Forward-looking statements include statements with respect to the timing and amount of estimated future revenue and sales and the Company's ability to protect and commercially exploit its intellectual property. Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.

2

BUSINESS OVERVIEW

Acceleware is an innovator of transformative technologies leading to a new era of responsible and cost-effective energy development focused within two business segments:

• RF Heating: intelligent electric heating using RF energy generated by the Company's proprietary Clean Tech Inverter ("CTI") for industrial applications including enhanced oil recovery ("RF XL"), and
• HPC: high-performance computing scientific software.

Acceleware's patented CTI heating 'engine' can provide intelligent, reliable, scalable, on-demand, decarbonized heat via RF energy. CTI is extremely efficient, it can be adapted to multiple industrial clean heating applications, and it may be able to displace fossil fuel reliant heating systems that are GHG intensive and costly.

The CTI has been successfully field tested over many months, including over six months of operation at the RF XL Pilot. The CTI uses leading edge silicon carbide ("SiC") transistor technology that results in over 98 percent efficiency converting AC or DC electricity to RF energy. By delivering this energy directly (and with minimal losses) to the material being heated, a CTI-powered RF heating system could reduce energy intensity by up to an estimated 50 percent versus fossil fuel reliant heating.* Multiple additional CTI patents are pending.

RF XL is Acceleware's patented RF heating technology designed to improve the extraction of heavy oil and bitumen. RF XL features a cost effective and environmentally friendly alternative to other thermal extraction methods such as steam assisted gravity drainage ("SAGD"). When applied, RF XL has the potential to reduce both capital and operating costs, while offering significant environmental benefits when compared to other extraction techniques, including:

• immediate GHG emission reductions;
• the elimination of external water use;
• a substantial decrease in land use;
• no requirement for solvents;
• substantial elimination of water treatment facilities; and
• no need for tailings ponds.

The Company believes that electrification through RF XL can provide a clear pathway to low-to-zero GHG production of heavy oil and oil sands and provide optimal alignment between industry and government to recognize innovation as a meaningful component of the oil and gas industry's overall emission reduction plans.*

Acceleware's HPC segment helps customers meet their oil and gas exploration needs with seismic imaging software that provides the most accurate and advanced imaging available for oil exploration in complex geological zones and formations, and also helps customers meet their electronic and medical product development needs with state-of-the-artelectro-magnetic ("EM") simulation software.

*This paragraph contains forward looking information. Please refer to "Forward Looking Statements" and "Risk Factors and Uncertainties" for a discussion of the risks and uncertainties related to such information.

3

OPERATING SUMMARY

The RF XL Pilot is intended to demonstrate RF XL in an operational environment. In the opinion of the Company's management, once the RF XL Pilot is complete, RF XL will have achieved Technology Readiness Level 8, which is the final level before early adoption and commercialization1. RF XL is the first application of the Company's patent- protected CTI. Acceleware believes the CTI can economically decarbonize many industrial verticals through electrification with immediate application in the clean energy transition. Functionality of the CTI has already been proven through scaled field tests conducted in 2019 and 2020, and over six months of operation at the RF XL Pilot. When combined with existing heating systems, CTI may be able to facilitate an economic decarbonization strategy for many organizations. Acceleware has established, or is engaged in discussions to establish, initiatives to develop CTI prototypes for applications in industries such as mining, hydrogen production, and food and agricultural drying.

Based on observations, Acceleware remains confident that RF XL will become viable as a critical technology in the effort to decarbonize heavy oil and oil sands production. The Company's operations team continued data analysis, "history-matching" simulations and other analyses of operational data from 2022 that provide strong evidence that the operation of the RF XL Pilot resulted in sustained RF heating of the formation around the heating well prior to a pause in operations for a maintenance workover. In particular, the Company successfully injected RF power into the heating well for over 200 days - a significant milestone and something that has never been achieved before. Also of note is that the CTI successfully operated for seven consecutive months at a variety of power levels and operating conditions during this time.

In the three months ended September 30, 2023 ("Q3 2023"), encouraged by positive results to date, the Company worked closely with industry partners to determine the most appropriate next steps in the workover. Several options were analyzed which could allow for demonstration of RF XL in an operational environment, and each was ranked by probability of success. During Q3 2023, a refined configuration of RF XL was finalized including many upgraded components, improved deployment tools, and modified operational procedures based on experience to date. More details on the workover progress are discussed below.

Strategic and financial highlights since the beginning of 2023 include:

• On November 6, 2023, Acceleware announced non-dilutive,non-repayablefunding from the Clean Resource Innovation Network("CRIN") of up to $3 million for the RF XL Pilot. The funding will be paid upon completion of certain milestones and is reimbursement for costs incurred between January 1, 2022 and March 31, 2024. This funding is intended to accelerate clean technology development and commercialization for the oil and gas industry. No amounts have been received as of November 21, 2023.
• On August 21, 2023 Acceleware closed anon-brokeredprivate placementof units which consisted of one common share of the Company and one common share purchase warrant. The Company distributed a total of 1,949,036 units at a price of $0.23 per unit for total gross proceeds of $448,278. The proceeds will be used to fund a portion of the RF XL Pilot workover and for general corporate purposes.
• On August 2, 2023,Acceleware successfully concluded an Exploring Innovations project with the International Minerals Innovation Institute ("IMII"),which validated the potential to use RF energy from
  Acceleware's CTI to dry potash and other mineral commodities. IMII subsequently announcedthat it has invited Acceleware to submit a proposal for subsequent project phases which could lead to the development of a commercial scale drying platform. Acceleware has submitted a proposal and awaits approval from IMII.
• On February 22, 2023, Acceleware and Aurora Hydrogen announced the award of $2 millionfrom Alberta Innovates to Aurora Hydrogen for a collaborative project. The $5.5 million joint development will work to develop a new method of hydrogen production via methane pyrolysis, utilizing Acceleware's CTI and Aurora's unique reactor. Discussions with Aurora are ongoing, however Acceleware is also developing alternative hydrogen pathways including engaging with other hydrogen technology providers looking to use CTI for hydrogen production.

1 Technology Readiness Levels are defined by the Government of Canada, Science and Innovation TRL Assessment Tool

6

• Acceleware continued to invest in developing and protecting new intellectual property with the total number of patents issued, allowed, applied for, or in development growing from 44 at the end of 2022 to a total of 55 now.

The Company now has 21 patents granted or allowed to protect various proprietary technologies related to Acceleware's intellectual property, and 34 patent applications pending or under development. The Company uses an integrated strategy for IP protection involving a combination of patenting and trade secrets, working closely with the patent offices and intellectual property advisors.

Acceleware also continues to focus on driving external awareness of the Company and on positioning its RF heating and CTI technology more prominently within both the oil and gas and clean-tech communities. The Company has been featured in several news stories by Business News Network,The Power Play by The Market Herald,Energi Media,and CBC on television,radio, and online. Several new blog posts and videos have been released via social media recently which feature discussions on the RF heating technology by Acceleware's engineering team. The collection of videos is available for viewing here: Acceleware Video Posts. Acceleware presented at the Global Energy Show in Calgaryin June 2023, and was one of three Canadian Clean-Tech companies invited by the Innovation Asset Collective to participate in their panel at the Science Summit at the United Nations General Assembly (UNGA 78) in September 2023.

RF XL PILOT UPDATE

In 2022, the fibre optic distributed temperature sensing ("DTS") system in the heating well was damaged during a maintenance operation. After the DTS break, RF power was reduced for safety and a plan for a heating well workover was developed. The workover commenced in October 2022 and remains ongoing.

As previously communicated in the MD&A for the year ended December 31, 2022, the Acceleware team was able to complete an inspection of the removable and non-removeable components of the proprietary down-hole RF XL system. The inspection activities included visual inspection, various electrical and mechanical measurements, down- hole video analysis and other engineering techniques to obtain detailed data on the condition of the components. This inspection enabled the team to identify several opportunities expected to improve the performance of the RF XL system and rectify issues that required repair. These upgrades and repairs would not have been possible without pausing operations to perform the replacement of the distributed temperature sensing system ("DTS") and have resulted in the addition of valuable intellectual property.

The Acceleware team re-commencedon-site workover operations on August 8, 2023 after completion in the first half of 2023 of extensive design, procurement, shop testing and de-risking of repaired parts, upgraded components, run-in-hole procedures, and deployment tooling. While challenges were encountered in redeploying upgraded components subsurface, to the best of the Company's management's knowledge, the RF XL Pilot has demonstrated greater success than any radio frequency pilot to date. The Company has met with its industry partners to develop and discuss options to resume testing. Technical plans and next steps for resuming operations were designed following these collaborative discussions. Each alternative plan has a range of probability, cost and timeline for deployment. Although the challenge in resuming operations results in additional cost and time, the updated technical plans allow Acceleware to deploy upgraded components to improve operations or address known concerns. Acceleware remains encouraged by the operation of the RF XL Pilot, in particular no known operability concerns of the RF XL technology itself.

Acceleware is looking to proceed with the option that has the highest probability of success and lowest risk, backed by the most partner support. Upon successful completion of these final workover steps, RF XL components and DTS will be reassembled, and heating operations will resume. Completion of the remaining workover tasks is expected to result in increased power injected into the reservoir, and in turn a meaningful increase in reservoir temperature within a few months of resuming heating. The final timing and cost of the workover remains dependent on financing, partner investment, availability of service rigs, weather conditions at site, supply chain availability, delivery timing, and the successful deployment of repairs and components. *

• this paragraph contains forward looking information. Please refer to "Forward Looking Statements" and "Risk Factors and Uncertainties" for a discussion of the risks and uncertainties related to such information.

7

QUARTER IN REVIEW

Revenue of $0.1 million was generated in the three months ended September 30, 2023 compared to $0.1 million in the three months ended September 30, 2022 ("Q3 2022") and $0.1 million in the previous quarter ended June 30, 2023 ("Q2 2023"). Revenue in Q3 2023 included software and maintenance revenue. Revenue was slightly stronger in Q3 2023 in the HPC segment for FDTD software compared to Q3 2022 and Q2 2023 but was lower for seismic software due to less demand. There continues to be variability in the RF Heating segment for revenue related to services in applying CTI to industrial heating. While interest has increased in the intelligent electric heating service offering, there was no revenue in Q3 2023. Acceleware did not receive any data revenue payments during Q3 2023, Q3 2022 or Q2 2023 for the RF XL Pilot. These payments, when historically received, were recorded in deferred revenue. Data revenue equal to the amount recorded in deferred revenue will be recognized as revenue at the end of the RF XL Pilot or when the data contracts are terminated, whichever is earlier.

Total comprehensive loss for Q3 2023 was $1.3 million compared to a comprehensive loss of $1.0 million for Q3 2022 and a comprehensive loss of $1.1 million for Q2 2023. Comprehensive loss in all periods was impacted by changes in value of the derivative financial instruments embedded within the convertible debenture. These fluctuations are driven primarily by the fluctuation in the Company's share price. Additionally, comprehensive loss was higher for higher interest costs related to current liabilities funding the Company's working capital and fluctuating levels of R&D spending and government assistance for R&D activities.

Gross R&D expenses incurred in Q3 2023 were $0.8 million compared to $0.6 million in Q3 2022 and $0.6 million in Q2 2023. R&D spending was higher in Q3 2023 compared to Q3 2022 and Q2 2023 due to on-site workover activities. Government assistance received in Q3 2023 was $0.1 million and nil in Q3 2022 and Q2 2023. The Government of Alberta's Innovation Employment Grant ("IEG") to support research and development was effective January 1, 2021 and provides a grant of up to 20% of eligible R&D expenses incurred in Alberta. This new grant effectively replaced Alberta's 10% scientific research and experimental development refundable tax credit that was eliminated as at December 31, 2019. The Company met the eligibility criteria, claimed eligible R&D expenditures for 2021 and 2022 and received and recognized $0.4 million in Q1 2023 and $0.1 million in Q3 2023. In Q3 2022 and Q2 2023 there was $nil million government assistance received and recognized related to the RF XL Pilot. Government assistance offsets gross R&D costs.

General and administrative ("G&A") expenses incurred in Q3 2023 were $0.6 million compared to $0.5 million in Q3 2022 and $0.5 million in Q2 2023. There were higher non-cash payroll related costs incurred in Q3 2023 due to the timing of option grants, higher professional fees and lower salaries as the Company continues to prioritize cost control given uncertain economic conditions.

YEAR TO DATE IN REVIEW

Revenue of $0.2 million was generated from the Company's software, maintenance and services revenue streams for the nine months ended September 30, 2023 compared to $0.3 million for the nine months ended September 30, 2022. Although revenue is more diversified in 2023 with a significant contribution from services revenue, revenue was lower due to lower demand for HPC software and maintenance revenue. Services revenue relates to RF simulation and experimental studies paid by customers interested in applying CTI for their industrial heating needs. Industries outside heavy oil have also become interested in utilizing CTI for industrial heating, including mining, agriculture, and hydrogen. Acceleware did not receive any non-refundable milestone cash payments during the nine months ended September 30, 2022 compared to $1.2 million received during the nine months ended September 30, 2022. When received, these payments are recorded in deferred revenue.

Total comprehensive loss for the nine months ended September 30, 2023 was $2.7 million compared to $3.8 million for the nine months ended September 30, 2022 due to lower R&D spending for the RF XL Pilot. There are fluctuations in both periods related to changes in fair value of the derivative financial instruments embedded in the convertible debentures and interest expense due to short- and long-term debt financing.

Gross R&D expenses for the nine months ended September 30, 2023 were $2.2 million compared to $4.5 million incurred during the nine months ended September 30, 2022 due to lower cost R&D activity on the RF XL Pilot during

9

the nine months ended September 30, 2023. There was a significant amount of non-recurring installation costs for the RF XL Pilot incurred in the early part of 2022. Federal and provincial government assistance of $0.6 million was recognized in the nine months ended September 30, 2023 compared to $1.3 million for the nine months ended September 30, 2022 as the ERA and SDTC and Alberta Innovates grants for the RF XL Pilot near completion.

G&A expenses incurred during the nine months ended September 30, 2023 were $1.4 million compared to $1.5 million for the nine months ended September 30, 2022 a decrease of $0.1 million primarily due to lower salaries as the Company continues to prioritize cost management, partially offset by higher non-cash payroll related costs for option grants.

As at September 30, 2023, Acceleware had negative working capital of $2.6 million (December 31, 2022 - negative working capital of $0.6 million) including cash and cash equivalents of $0.3 million (December 31, 2021 - $1.1 million). The decrease in working capital is attributable to the timing of receipt and recognition of government and partner funding and related R&D spending. During the nine-months ended September 30, 2023, Acceleware submitted the first claim for reimbursement under the new $3 million CRIN grant funding agreement noted above. No amounts have been received as of November 21, 2023. Increasing the deficit is deferred revenue of $4,350,000 as at September 30, 2023 (December 31, 2022 - $4,350,000). Despite receiving non-refundable cash payments for these amounts, the milestone payments have not met all requirements for revenue recognition under IFRS 15 Revenue from Contracts with Customers. These amounts will be recognized as revenue and increase shareholders' equity when RF XL Pilot heating is complete or the data revenue contracts are terminated, whichever is earlier.

In the interests of matching cash requirements with a combination of cash generated from operations, external funding, and capital raising activities, the Company actively manages its cash flow and investments in new products. Acceleware intends to maximize cash generated from operations through several initiatives which include continuing to focus on higher gross margin software products that are marketed through a combination of direct and reseller models; minimizing operating expenses where possible; and limiting capital expenditures. As the Company continues to develop its RF Heating technology, new R&D investments will be financed through a combination of internal cash flow from the HPC business, project funding agreements, government assistance and external financing, when available.*

STRATEGIC UPDATE

In 2023, Acceleware is focusing on RF XL as the primary strategic revenue-generating and investment technology while pursuing additional applications for the use of the CTI to decarbonize industrial heating across a wide range of heavy emitting industries. Acceleware has a proven track record for successful development and commercialization of revolutionary technologies.

The Company believes that its RF XL technology presents significant potential environmental and economic benefits for the oil industry and that the CTI offers a similar set of benefits to a range of sectors currently reliant on fossil fuel combustion to generate heat. Acceleware has been able to continue to fund the development of RF XL through non- refundable government funding and industry contributions, supplemented by financing activities such as the convertible debenture private placement in Q1 and Q2 2022 and the units offering private placement in Q4 2022 and Q3 2023, all of which included common share purchase warrants. However, public market investor sentiment in general, and towards the oil and gas industry in particular may affect the Company's ability to raise additional funding for the final stages of the RF XL Pilot, should further funding be required. A further delay in the testing program may result in additional costs and a delay in technology commercialization. To mitigate these risks, the Company plans to prioritize the RF Heating segment by concentrating capital allocation and resources deployment to it and maintain its cost containment efforts. Development of new CTI applications will be supported by a combination of grant funding, client revenues, and external investment targeted specifically on these projects.

• this paragraph contains forward looking information. Please refer to "Forward Looking Statements" and "Risk Factors and Uncertainties" for a discussion of the risks and uncertainties related to such information.

10