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Encore Technologies Corporation Management Reports 2025
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Management Reports
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ENCORE
TECHNOLOGIES CORP.
Encore Technologies Corp.
(a development-stage company)
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the nine months ended October 31, 2025
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Management's Discussion and Analysis of Financial Condition and Results of Operations
This Management’s Discussion of Financial Condition and Results of Operations (the "MD&A") dated December 29, 2025, provides an analysis of, and should be read together with i) the condensed interim consolidated financial statements for the three- and nine-months ended October 31, 2025 (the "Interim Financial Statements"); the audited financial statements for the year ended January 31, 2025 and the period from incorporation on February 9, 2023 to January 31, 2024, and the related notes attached thereto (the "AFS"); and iii) the prospectus dated, October 23, 2025 (the "Prospectus"), prepared by Encore Technologies Corp. (formerly known as CERO Technologies Inc.) ("Encore Technologies", or the "Company") qualifying for distribution in the provinces of British Columbia, Alberta and Ontario, a total of 5,000,000 of the Company’s common shares ("Encore Shares"). Each of these documents are available under the Company’s issuer profile on the document filing and retrieval system for Canadian publicly-listed companies known as SEDAR+ at https://www.sedarplus.ca/.
Except as otherwise indicated by the context and for the purposes of this report only, references in this MD&A to "we", "us", "our", or "the Company", refer to Encore Technologies Corp.
Forward-looking information
Certain statements contained in this management discussion and analysis may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts but are forward-looking statements. Such forward-looking statements are subject to both known and unknown risks and uncertainties which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, the availability of sufficient capital, the estimated cost and availability of funding for the continued development of the Company's software products, political and economic conditions, and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this MD&A or as of the date otherwise specifically indicated herein.
Such statements reflect our management’s current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and known or unknown risks and contingencies. Many factors could cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements.
Due to such risks and uncertainties, including those identified in the Prospectus, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Description of Business
Incorporated on February 9, 2023, under the laws of the Province of British Columbia, Canada, with the name Project X Ventures, the Company changed its name to Encore Technologies on June 25, 2025, to better reflect its business plans and operating focus.
Encore builds technology ventures focused on intelligent infrastructure, energy systems, and data optimization. The Company's current operating business is the business of its wholly owned subsidiary, CERO Technologies Ltd. ("CERO"), which was incorporated pursuant to the BCBCA on July 9, 2025.
CERO is a Vancouver, BC-based software-as-a-service ("SaaS") company that has developed a carbon credit software platform (the "CERO Platform") designed to automate and streamline the management of energy and emissions data, in an effort to make the carbon credit ecosystem more transparent, efficient, and cost-effective while optimizing energy-related emissions data for operational and financial use. CERO's target users are asset owners, data aggregators, and carbon calculators who need to quantify greenhouse gas ("GHG") reduction in real-time. Ultimately, the CERO Platform is designed to serve as the backbone for any organization that implements actions that reduce, avoid or remove GHG emissions from the atmosphere.
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Corporate address
The corporate head office and principal address of the Company is located at 2133-1177 West Hastings Street, Vancouver, BC, V6E 3T4, Canada. The registered and records office of the Company is located at suite 1500 - 1055 West Georgia Street, PO Box 11117, Vancouver, BC, V6C 4N7, Canada.
Share consolidation
On September 16, 2024, the Company undertook a 10-for-1 share consolidation. Accordingly, all shares and per share amounts presented in this MD&A have been retroactively adjusted to reflect this consolidation. Any references to the Encore Shares are on a post-consolidation basis. Numbers of stock options ("Options") to purchase Encore Shares and their respective exercise prices have also been retrospectively adjusted to reflect the effects of the share consolidation.
Going concern
The Interim Financial Statements are presented on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of operations. There are conditions and events that cast significant doubt on the validity of this assumption.
The Company does not generate cash flows from operations and has therefore relied principally on the issuance of equity securities and debt instruments to finance its operating activities to the extent that such instruments are issuable under terms acceptable to the Company. If future financing is unavailable, the Company may not be able to meet its ongoing obligations, in which case the realizable values of its assets may decline materially from current estimates.
As at October 31, 2025, the Company had no sources of revenue and an accumulated deficit of $597,131
These material uncertainties may cast significant doubt as to the ability of the Company to continue as a going concern. The Interim Financial Statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue operations. These adjustments could be material.
The assumption that the Company will be able to continue as a going concern is subject to critical judgments by management with respect to assumptions surrounding the short and long-term operating budget, expected profitability, investing and financing activities and management's strategic planning. Should those judgments prove to be inaccurate, management's continued use of the going concern assumption could be inappropriate. Although the Company has been successful in the past in obtaining financing, there can be no assurances that the Company will continue to obtain the additional financial resources necessary and/or achieve profitability or positive cash flows from its future operations. If the Company is unable to obtain adequate additional financing, the Company would be required to curtail its planned operations.
CERO Software
The Company has developed and launched the minimum viable product of the CERO Platform, which replaces manual, time-consuming processes with a digital system to automate the calculation of real-time GHG reductions, verifies emissions data and automates carbon credit issuance. The CERO Platform currently leverages the ChargePoint API, an application programming interface for one of the largest electric vehicle ("EV") charging networks in the world, to ensure accurate emissions calculations and seamless integration with EV charging infrastructure.
CERO's revenue model is based on a percentage of the carbon credits generated by third-party registries using the CERO Platform, with escalating charges based on the depth of partner engagement.
The Company has established a partnership with a Vancouver-based real estate development and investment company (the "Beta Client") which has over 40 projects that include commercial and residential buildings that operate EV charging stations. The partnership allows the Beta Client to monetize the environmental benefits of their charging stations through the CERO Platform. Encore Technologies' near-term commercial focus is on EV charging station providers, with plans to expand into hybrid fleet vehicles and building systems.
Encore Technologies also entered into a Master Services Agreement with GreenFoot Energy Solutions Inc., on July 4, 2025, establishing the framework for commercial deployment of the CERO Platform. This marks the Company's first commercial agreement and enables project-specific work orders to be executed under this structure.
The CERO Platform is operational and has been used in commercial pilot environments to process real-time emissions data. While its initial focus is on the carbon credit sector, the Company believes the platform may also have future applications in other industries where real-time infrastructure and emissions data can support business optimization and sustainability efforts.
Selected Financial Information
The Interim Financial Statements have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
The Interim Financial Statements and MD&A include the results of operations and cash flows for the three- and nine-month periods ended October 31, 2024 and 2025, and the year ended January 31, 2025. The reader must be aware that historical results are not necessarily indicative of future performance. All amounts are reported in Canadian dollars, which is the functional currency of the Company.
Encore Technologies followed the material accounting policies presented in Note 3 of the AFS consistently throughout all periods summarized in this MD&A.
The Company operates in one segment – the development of a carbon credit software platform and currently, in one geographic region: Canada. The Company commenced formal operations in 2023.
The following table and discussion provide selected financial information from, and should be read in conjunction with, the Financial Statements:
| Three months ended | Nine months ended | |||||
|---|---|---|---|---|---|---|
| October 31, 2025 | October 31, 2024 | October 31, 2025 | October 31, 2024 | |||
| Total revenue | $ - | $ - | $ - | $ - | $ - | $ - |
| Loss before income taxes | $ 73,779 | $ 30,744 | $ 117,296 | $ 42,441 | ||
| Other comprehensive gain | $ (2,663) | $ - | $ (2,663) | $ - | ||
| Comprehensive loss | $ 71,116 | $ 30,744 | $ 114,633 | $ 42,441 | ||
| Loss per share, basic & diluted | $ - | $ 0.04 | $ 0.01 | $ 0.05 | ||
| Cash dividend declared per share | $ - | $ - | $ - | $ - |
Management is responsible for, and the Company's board of directors (the "Board") approved, the Interim Financial Statements.
Results of Operations for the three- and nine-month periods ended October 31, 2024 and 2025
During the three- and nine-months ended October 31, 2025, the Company recognized a loss and comprehensive loss of $71,116 and $114,633 (three- and nine-months ended October 31, 2024: $30,744 and $42,441), respectively. The current periods include higher professional fees than were incurred in the comparative period as a reflection of the Company's November 2025 initial public offering ("IPO") and listing of the Encore Shares on the Canadian Securities Exchange (the "CSE"), particularly relating to the audit and review of the Company's financial statements.
Specific comparative activities and results:
Professional fees of $64,233 and $93,386 for the three- and nine-months ended October 31, 2025 (comparative periods: $25,303 and $27,697), respectively, includes, legal, audit, and accounting services. Expenses in the current period are higher than those of the comparative period primarily due to legal fees related to the IPO and audit-related costs.
Office and administrative expenses of $2,593 and $7,720 for the three- and nine-months ended October 31, 2025 (comparative periods: $2,245 and $5,223), respectively, includes, general and administrative costs, and monthly accounting and office software licences.
Listing and filing fees of $5,250 and $5,250 for the three- and nine-months ended October 31, 2025 (comparative periods: $nil and $nil), respectively, relates to fees paid in connection with listing of the Encore Shares on the CSE.
Interest expense of $nil and $4,950 for the three- and nine-months ended October 31, 2025 (comparative periods: $3,151 and $9,386), respectively, arises from an unsecured promissory note of $250,000 (the "Promissory Note") entered into in April 2023, that carries interest calculated at 5% per annum. During the nine-months ended October 31, 2025, the Company paid $26,610 in cash, in settlement of the entire amount of interest due, and settled the principal of the Promissory Note through the issuance of Encore Shares. No amount had been paid in interest in the comparative period.
Consulting and advisory fees of $nil and $4,200 for the three- and nine-months ended October 31, 2025 (comparative periods: $nil and $nil), respectively, was paid to a company controlled by certain directors of the Company in connection with financial advisory services.
Marketing and investor relations expenses of $1,703 and $1,778 for the three- and nine-months ended October 31, 2025 (comparative periods: $nil and $nil), respectively, relates to domain name registration fees for the Company's website.
Stock-based compensation expenses of $nil and $12 for the three- and nine-months ended October 31, 2025 (comparative periods: $45 and $135), respectively, reflect vesting of awards of Options to certain directors, officers, and consultants of the Company. Refer in this MD&A under section "Outstanding Securities – Stock Options" for a summary of awards, forfeitures, and cancellations of Options to purchase Encore Shares during the period.
Assumptions and estimates used by management to estimate the value of stock-based compensation expenses have an effect on the statement of loss, and on the reserve balance on the statements of financial position. Stock-based compensation expense should be expected to vary from period-to-period depending on several factors, including whether any of Options or other form of equity incentive are granted in a period, and the timing of vesting or cancellation of such equity instruments. Refer to the AFS for details of the inputs and estimates used in the respective Black-Scholes valuation calculations.
Financial Position
The following financial data and discussion is derived from the Interim Financial Statements.
| October 31, 2025 | January 31, 2025 | |
|---|---|---|
| Current assets | $ 283,216 | $ 26,147 |
| Total assets | $ 283,216 | $ 26,147 |
| Total current liabilities | $ 165,953 | $ 435,708 |
| Total liabilities | $ 165,953 | $ 435,708 |
| Shareholders’ equity (deficit) | $ 117,263 | $ (409,561) |
| Number of common shares outstanding | 19,030,950 | 7,333,333 |
| Basic and fully diluted loss per weighted average number of common shares for the period ended | $ 0.01 | $ 0.02 |
Assets
The balance of the Company's assets reflects the proceeds of financings and borrowings received during the respective period, less ongoing expenditures for general corporate activities.
Liabilities
Current liabilities as at October 31, 2025, comprises payables and accrued liabilities of $165,953 (January 31, 2025: $48,448). The balances of payables and accruals will generally vary dependent upon the level of activity at the Company and the timing at period end of invoices and amounts we have actually paid. As at October 31, 2025, the Company has accrued $86,000 for legal costs, and $66,500 for audit-related fees.
Demand Loan
On September 20, 2023, the Company entered into an unsecured loan agreement for a $100,000 demand loan (the "Loan") from Sustainable Capital Corp. ("SCC"), an arms' length entity. The Loan was used for working capital and general corporate requirements, and is non-interest bearing with no defined term of repayment. On June 13, 2025, the Company repaid the full balance of the Loan.
Promissory Note
On April 20, 2023, the Company entered into an unsecured promissory note for the $250,000 Promissory Note from SCC. The Promissory Note was due and payable on demand, carried interest at a rate of 5% per annum, calculated as simple interest monthly in arrears and had a contractual maturity date of October 20, 2025.
The Promissory Note was used for working capital and general corporate requirements.
| Principal | Interest | Total | |
|---|---|---|---|
| Balance, January 31, 2024 | $ 250,000 | $ 9,726 | $ 259,726 |
| Interest expense | - | 12,534 | 12,534 |
| Balance, January 31, 2025 | 250,000 | 22,260 | 272,260 |
| Interest expense | - | 4,350 | 4,350 |
| Settlement of principal | (250,000) | - | (250,000) |
| Payment of interest | - | (26,610) | (26,610) |
| Balance, October 31, 2025 | $ - | $ - | $ - |
On June 6, 2025, the Company settled the $250,000 principal of the Promissory Note through the issuance of 2,380,952 Encore Shares at a value of $0.105 per share. The accrued interest amount was settled in cash on June 13, 2025.
Cash Flows
For the nine-months ended October 31, 2025, the Company had cash outflows of $54,295 from operating activities compared to $4,308 through the nine-months ended October 31, 2024. Cash used in operating activities was primarily for office and administrative expenses, certain listing and filing fees paid in advance of the IPO, and marking and investor relations costs.
Cash from financing activities in the nine-month period ended October 31, 2025, was generated from the issuances of Encore Shares, net of certain related share issue costs; the $100,000 cash outflow in repaying the Loan, and $26,610 to settle the interest due on the Promissory Note. See a summary of issuances and share capital related activity under heading "Share Capital and Outstanding Securities", in this MD&A.
Share Capital and Outstanding Securities
The authorized share capital of the Company consists of an unlimited number of common shares without par value.
Common shares
On February 7, 2025, the Company closed a private placement financing, issuing 4,249,999 Encore Shares at $0.03 per share, for gross proceeds of $127,500 (the "February Financing").
On May 27, 2025, the Company closed a private placement financing, issuing 5,066,666 Encore Shares at $0.075 per share, for gross proceeds of $380,000.
A total of $13,551 in share issue costs were incurred in connection with these private placements.
On June 6, 2025, the Company settled the $250,000 principal of the Promissory Note through the issuance of 2,380,952 Encore Shares at a value of $0.105 per share.
On October 23, 2025, the Company filed the Prospectus with the securities regulators of each of the provinces of British Columbia, Alberta and Ontario to qualify for distribution a total of 5,000,000 Encore Shares (the "Offered Shares") at a price of $0.15 per Offered Share, for total proceeds of up to $750,000 (the "Prospectus Financing"), in conjunction with the IPO and planned listing of the Encore Shares on the CSE.
Pursuant to an agency agreement (the "Agency Agreement"), the Company appointed a selling Agent to act as its agent to offer for sale to the public the Offered Shares, on a "commercially reasonable efforts" basis, without underwriter liability.
The Company granted the Agent an option (the "Over-Allotment Option") to offer for sale additional Offered Shares (the "Over-Allotment Shares") exercisable at a price per Over-Allotment Share equal to $0.15 for a period of 60 calendar days following the closing date of the financing (the "Closing Date"), for a total of up to $112,500, on the same terms and conditions as the Offering. The number of Over-Allotment Shares issuable upon exercise of the Over-Allotment Option was up to 15% of the number of Offered Shares sold pursuant to the Offering.
On November 27, 2025, the Company closed the Prospectus Offering inclusive of the full exercise of the Over-Allotment Option, issuing a total of 5,750,000 Encore Shares at a price of $0.15 per share, for total gross proceeds of $862,500.
The Company paid the Agent a cash commission of $60,375, an amount equal to 7% of the gross proceeds of the Offering (the "Agent's Commission"), and a corporate finance fee (the "Corporate Finance Fee") of $50,000. As additional compensation, the Company also issued the Agents 402,500 non-transferable share purchase warrants (the "Agent Warrants"). The Agent Warrants entitle the Agent to purchase 402,500 Encore Shares at an exercise price of $0.20 per Encore Share until November 27, 2026.
On November 28, 2025, the Encore Shares were listed for trading on the CSE under the symbol "ENCR", completing the Company's IPO.
Consistent with Encore's accounting policy choice to recognized expenditures paid in connection with publicly announced issuances of additional Encore Shares as a deduction from equity, the Company has recognized $102,504 in related share issue costs as at October 31, 2025.
There were no issuances of Encore Shares during the nine-months ended October 31, 2024.
Pursuant to a Reverse Vesting Agreement dated February 9, 2023 (the "RVA"), 166,667 of the Encore Shares issued in private placement financings which closed in February 2023 (the "Initial Financings") were repurchased by the Company on June 21, 2024, at a price of $0.04 per share, for an aggregate of $6,667.
Rights and restrictions related to Founders' shares
Shares issued pursuant to the Initial Financings are subject to a Reverse Vesting Agreement dated February 9, 2023 (the "RVA"), whereby each of the respective shareholders has agreed that Encore Technologies holds a right to repurchase the unvested Encore Shares that each respective shareholder acquired in such financings at the same price as was originally paid, upon either termination or resignation from the Company of that particular shareholder (the "Repurchase Option").
The Repurchase Option is exercised by the Company by either:
- Providing notice to the Shareholder; or
- Automatically after 90 days should the Company fail to provide notice to the shareholder that it did not intend to exercise its right.
The vesting period for the Encore Shares subject to the RVA is 48 months from the date of closing of the related financing on a straight-line basis, with vesting commencing on the first anniversary of the issuance of the shares.
Upon a "change of control" of the Company, meaning a transaction or series of related transactions in which a person, or a group of related persons, acquires Encore Shares in the representing more than 50% of the outstanding voting power of the Company, the vesting of such Encore Shares will accelerate such that the Repurchase Option will lapse as to 100% of the shares, effective as of immediately prior to consummation of the change of control.
The number of unvested Encore Shares subject to the Repurchase Option at October 31, 2025, was 250,000 (January 31, 2025: 390,625).
As of the date of this MD&A, the Company has 24,780,950 Encore Shares outstanding, 6,236,250 of which are subject to a regulatory escrow. Encore Shares subject to escrow will be subject to a release schedule specified in National Policy 46-201 – Escrow for Initial Public Offerings.
Incentive Securities
On October 10, 2025, the Company adopted an Omnibus Equity Incentive Plan (the "Plan"). The Plan provides that, subject to the requirements of the CSE, the aggregate number of securities reserved for issuance, set aside, and made available for issuance under the Plan as Options be limited to that number which is 10% of the number of issued and outstanding shares of the Company at the time of granting of such Options. The Plan also provides that the aggregate number of securities reserved for issuance, set aside, and made available for issuance under the Plan issuable as restricted share units ("RSUs"), share appreciation rights ("SARs"), deferred share unit rights ("DSUs"), and performance share units ("PSUs", and together with Options, RSUs, SARs, and DSUs, "Incentive Securities") be limited to 2,438,095 shares of the Company (in aggregate).
The number of Encore Shares which may be reserved in any 12-month period for issuance to any one individual upon exercise of all Incentive Securities held by that individual may not exceed 5% of the issued and outstanding common shares of the Company at the time of the grant.
The Company has not issued any RSUs, SARs, DSUs, or PSUs, to date.
Options
Stock option activities are summarized in the table below:
| Number of Stock Options Outstanding | Weighted Average Exercise Price ($) | Number of Stock Options Vested | |
|---|---|---|---|
| Balance, January 31, 2024 | 55,000 | 2.46 | 12,500 |
| Forfeited or cancelled | (5,000) | (2.25) | - |
| Balance, January 31, 2025 | 50,000 | 2.48 | 36,250 |
| Cancelled on termination of services | (30,000) | (2.65) | - |
| Cancelled by mutual agreement | (20,000) | (2.25) | - |
| Balance, April 30, 2025 | - | - | - |
During the three- and nine-months ended October 31, 2025, the Company recognized stock-based compensation expense of $nil and $12 (three- and nine-months ended October 31, 2024: $45, and $135), respectively.
On May 15, 2025, the Company and all of the holders of Options mutually agreed to terminate, without additional consideration, all of the Options outstanding. As a result, the remaining 20,000 Options were cancelled.
On December 23, 2025, Encore awarded an aggregate of 565,000 Options at an exercise price of $0.35 per share to certain officers, directors, and consultants to the Company. These Options vested immediately and expire December 22, 2025.
As at the date of this MD&A, there are 565,000 Options outstanding, all of which have vested.
Going Concern and Liquidity, Contractual Obligations, and Capital Management
Going Concern & Liquidity
The Company has not generated significant revenues or cash flows from operations to meet its operating and administrative expenses since inception, and does not expect to do so for the foreseeable future. As at the date of this MD&A, the Company has approximately $998,000 available in cash and cash equivalents, and a working capital balance of approximately $875,000.
In order to continue as a going concern and to meet its corporate objectives, the Company will require additional financing through debt or equity issuances, or other available means.
Although the Company has previously been successful in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. If the Company is unable to obtain adequate additional financing, the Company would be required to curtail its planned operations, and software development activities. Factors that could affect the availability of financing include the progress in developing Encore Technologies' software, the state of international debt, equity markets, and investor perceptions and expectations.
Furthermore, if future financing is unavailable, the Company may not be able to meet its ongoing obligations, in which case the realizable values of its assets may decline materially from current estimates. These material uncertainties may cast significant doubt as to the ability of the Company to continue as a going concern. The financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue operations. These adjustments could be material.
Capital Management
It is necessary for the Company to raise new capital to fund operations on a reasonably regular basis. Encore Technologies manages its capital to meet short-term business requirements, after taking into account cash flows from operations, expected capital expenditures and the Company's holdings of cash. To facilitate the management of its capital requirements, management prepares expenditure forecasts that are updated as necessary depending on various factors, including successful capital deployment and general industry
conditions. On an ongoing basis, management evaluates and adjusts its planned level of activities, including planned enhancements to the CERO Platform, other software development activities, and committed administrative costs, to ensure that adequate levels of working capital are maintained.
All sources of financing are analyzed by management and approved by the Board. There were no changes in the Company's approach or the Company's objectives and policies for managing its capital.
We believe that this approach, given the relative size and stage of Encore Technologies, is reasonable.
There may be circumstances where, for sound business reasons, funds may be re-allocated at the discretion of the Board or management of Encore Technologies.
If additional funds are required, the Company plans to raise additional capital primarily through the private placement of its equity securities. Under such circumstances, there is no assurance that the Company will be able to obtain further funds required for the Company's continued working capital requirements. Please also refer to "Going Concern & Liquidity" for further discussion on the availability of capital resources.
Contractual Obligations
The Company has no commitments for capital expenditures.
Related Party Transactions
At October 31, 2025, key management personnel consist of members of the Board, legal entities they control, and the Company's corporate officers as they have the authority and responsibility for planning, directing and controlling the activities of the Company.
At January 31, 2025, a shareholder deemed to hold significant influence by virtue of her then 29.8% shareholding of the issued and outstanding Encore Shares was also considered to be a related party. As a consequence of the February Financing and the May Financing this shareholder has been diluted to a level where such a conclusion is no longer valid.
For details on amounts paid, payable, and accrued to directors and officers, and transactions with Major Shareholders, refer to disclosure in the AFS.
Summary of Quarterly Results
The following is a summary of the Company's financial results for the eight most recently completed quarters:
| October 31, 2025 | July 31, 2025 | April 30, 2025 | January 31, 2025 | |
|---|---|---|---|---|
| For the three months ended: | $ | $ | $ | $ |
| Total assets: | 283,175 | 304,573 | 190,780 | 26,147 |
| Working capital (deficit) | 117,263 | 240,882 | (301,071) | (409,561) |
| Comprehensive loss (gain) for the period | 71,116 | 22,385 | 21,133 | 40,433 |
| Comprehensive loss per share | - | 0.00 | 0.00 | 0.01 |
| October 31, 2024 | July 31, 2024 | April 30, 2024 | January 31, 2024 | |
| For the three months ended: | $ | $ | $ | $ |
| Total assets: | 1,976 | 4,477 | 13,301 | 23,784 |
| Working capital (deficit) | (398,580) | (392,277) | (380,373) | (374,418) |
| Comprehensive loss for the period | 6,303 | 5,529 | 6,169 | 165,911 |
| Loss per share | 0.00 | 0.01 | 0.01 | 0.17 |
The Company's expenditures and cash requirements may fluctuate and lack some degree of comparability from period to period as a result of a number of factors including the timing of share-based payment expenses, tax recoveries, and other factors that may affect the Company's activities. The Company's primary source of funding is through debt financing and the issuance of share capital; accordingly, the Company's activity level and the size and scope of planned software development projects may also fluctuate depending upon the availability of financing with favourable terms. When capital markets strengthen, and the Company is able to secure equity financing with favourable terms, the Company's activity levels, and the size and scope of planned projects may increase.
A general discussion of significant expenses is summarized below:
The quarterly trend in total assets, liabilities and the generally increasing working capital is primarily driven by the impact of the Loan and the Promissory Note on the Company’s statement of financial position, and movements in the cash balance related to the Company’s financing activities and spending on software development activities, and corporate costs.
In general, from period-to-period, office and administrative expenses have remained consistent and modest in keeping with the Company’s focus on software development activities and efforts to prepare Encore Technologies for a public listing.
Financial Instruments and Risks
The Company’s financial assets consist of the cash held on deposit, and its financial liabilities consist of accounts payable and accrued liabilities. The Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of the Company’s financial instruments approximates their carrying value, unless otherwise noted.
As at October 31, 2025, the Company’s financial instruments consist of cash held on deposit, and its financial liabilities consist of accounts payable and accrued liabilities.
The Company is exposed in varying degrees to a variety of financial instrument related risks. The type of risk exposure and the way in which such exposure is managed is provided as follows:
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash held in bank accounts. As most of the Company’s cash is held by one bank there is a concentration of credit risk. This risk is managed by using a major bank that is a high credit quality financial institution as determined by rating agencies.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages this risk by careful management of its working capital. To date, the Company's sole sources of funding has been through debt financing or the issuance of equity securities for cash or, primarily through private placements. The Company’s access to financing is always uncertain. There is no assurance of continued access to significant equity funding. The Company requires additional funding to continue with its ongoing operations and accordingly is exposed to liquidity risks. Liquidity risk has been assessed as high.
Foreign Exchange Risk
Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. At October 31, 2025, the Company was not exposed to exchange risk as its business interests were located in Canada and transactions were primarily conducted in Canadian dollars.
Industry and Economic Risk Factors that May Affect our Business
The Company’s common shares should be considered highly speculative due to the nature of the Company’s business and the present stage of its development. An investment in securities of the Company should only be made by persons who can afford a significant or total loss of their investment.
Economic and industry risk factors that may affect our business, in particular those that could affect our liquidity and capital resources, are as described under the heading "Risk Factors" in our Prospectus, available on the Company’s SEDAR+ profile at www.sedarplus.ca.
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Other Risks and Uncertainties
The Company’s operations are subject to a number of risks and other uncertainties, including risks related to the Company’s ability to accurately forecast and to manage growth effectively, the Company’s reliance on additional financing sufficient to fund continuing activities and acquisitions given the absence of positive cash flows from operations, and the related risk that the Company will be able to continue operating as a going concern.
Occurrence of various factors and uncertainties of risk cannot be accurately predicted and could cause actual results to differ significantly from our current expectations and result in a material adverse effect on the Company’s operations, liquidity, or ultimate profitability. A comprehensive discussion of risks and uncertainties are set out in our Prospectus. The reader is directed to carefully review this discussion for a proper understanding of these risks and uncertainties.
Off Balance Sheet Arrangements
The Company has no off-balance sheet arrangements as at the date of this MD&A.
Changes in Accounting Policies and Initial Adoption
The Company did not adopt any new accounting policies during the period.
Critical Accounting Estimates
The critical accounting estimates used by the Company are described in the AFS.
Additional disclosure for Venture Issuers without Significant Revenue
Additional disclosure concerning Encore Technologies’ general and administrative expenses and software development costs are provided in the statements of loss and comprehensive loss and notes to the AFS. These financial statements are available on Encore Technologies’ website at www.encoretech.ca or on its SEDAR profile accessed through www.sedar.com.
Litigation
The Company and/or its directors may be subject to a variety of civil or other legal proceedings, with or without merit.
There are no legal proceedings outstanding, threatened or pending as of the date of this MD&A by or against the Company or to which it is party or its business or any of its assets are the subject of, nor to the knowledge of the directors and officers of the Company are any such legal proceedings contemplated which could become material to a purchaser of the Company’s securities.
Subsequent Events
There are no subsequent events other than those described in this MD&A.
Proposed Transactions
Except as described in this MD&A and in the Prospectus, there are no proposed transactions.
Approval
The Board approved the disclosure contained in this MD&A on December 29, 2025. A copy of this MD&A will be provided to anyone who requests it.