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Mobio Technologies Inc. — Management Reports 2025
Jun 30, 2025
44924_rns_2025-06-30_eaa7da4f-a525-4975-a355-dab29f0b2557.pdf
Management Reports
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Tracksuit Movers Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED
MARCH 31, 2025 AND 2024
(Expressed in Canadian dollars)
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
TO OUR SHAREHOLDERS
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following is management's discussion and analysis ("MD&A") of Tracksuit Movers Inc. ("TMI" or the "Company") operating and financial results for the three months ended March 31, 2025 and 2024 as well as information and expectations concerning the Company's outlook based on currently available information. This report is dated June 30, 2025.
This MD&A should be read in conjunction with the Company's condensed interim consolidated financial statements for the three months ended March 31, 2025 and 2024, and the audited annual financial statements for the years ended December 31, 2024 and 2023, which have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). All quarterly information contained herein is unaudited.
Management is responsible for the preparation and integrity of the financial statements, including the maintenance of appropriate information systems, procedures, and internal controls and to ensure that information used internally or disclosed externally, including the condensed interim consolidated financial statements and MD&A, is complete and reliable.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This MD&A contains forward-looking information including the Company's future plans. The use of any of the word's "target", "plans", "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. Such forward looking information, including but not limited to statements pertaining to Company's future plans and management's belief as to the Company's potential involve known and unknown risks and uncertainties, which could be significant, and other factors which may cause the actual results of the Company and its operations to be materially different from estimated costs or results expressed or implied by such forward-looking statements. Forward looking information is based on management's expectations regarding future growth, results of operations, future capital, and other expenditures (including the amount, nature, and sources of funding for such expenditures), business prospects and opportunities. These risks related to forward looking information include, but are not limited to, the risk factors that are discussed in greater detail under "Risk Factors and Uncertainties".
Although the Company has attempted to take into account important factors that could cause actual costs or results to differ materially, there may be other factors that cause the results of the Company's business to not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The forward-looking information included in this MD&A is expressly qualified in its entirety by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking information.
Tracksuit Movers Inc. Management's Discussion and Analysis Three months ended March 31, 2025 and 2024
1. SUMMARY OF OPERATIONS AND EVENTS
Tracksuit Movers Inc. (the "Company") was incorporated pursuant to the provisions of the Business Corporations Act (British Columbia) on September 6, 2012. The Company's registered and records office is located at 204 - 1080 Mainland Street, Vancouver, BC, V6B 2T4. The Company's primary line of business is to sell franchise rights in Canada and the United States for the operation of businesses that provide residential and commercial moving services. In 2021, the Company began operating its own corporate owned franchise locations in Cincinnati, Ohio, and Phoenix, Arizona. In 2023, the Company began offering its long-distance moving service. In January of 2025, the Company began operating its own corporate owned franchise location in Reno, Nevada. As at March 31, 2025, the Company had 20 (December 31, 2024 - 19) operating franchises in Canada and the USA.
Franchise rights in the United States are sold through the Company's wholly owned subsidiary, You Move Me LLC ("YMM LLC").
On February 19, 2021, YMM LLC acquired 100% of the outstanding membership units of MCSB Moving Services LLC ("MCSB"), a franchise location providing moving services in Cincinnati, Ohio. On March 1, 2021 Easy Moves LLC subscribed for 20,000 non-voting Class B units in MCSB resulting in the Company having a 75% ownership percentage. On March 1, 2022 the General Manager for MCSB subscribed for 15,000 non-voting Class C units in MCSB resulting in the Company having a 63% ownership percentage. On June 15, 2022, the Company's Managing Director and Southwind Capital Holdings LLC Series 5 subscribed for a total of 5,000 non-voting Class B units in MCSB and Easy Moves LLC transferred its non-voting Class B units back to the Company resulting in the Company having an 80% ownership percentage.
YMM Phoenix LLC ("YMM Phoenix") was incorporated on March 25, 2021 to be a corporately owned franchise location for residential and commercial moving services in Phoenix, Arizona. On April 1, 2022 the Company's Managing Director and Southwind Capital Holdings LLC Series 5 subscribed for a total of 5,000 non-voting Class B units and YMM Phoenix's General Manager subscribed for 15,000 non-voting Class C units in YMM Phoenix. On June 30, 2023, General Manager of YMM Phoenix transferred its non-voting Class C units back to the Company resulting in the Company having an 94% ownership percentage.
On April 30, 2021, the Company subscribed to 200,000 common shares of Karve IT Ltd. ("Karve") at the price of $1 per common share. As at March 31, 2025, the Company owns 200,000 shares of Karve, representing 39.22% of the Company and one Board seat (December 31, 2024 - 39.22%). Karve IT Ltd. is a developer of customer relationship management software Move Right designed for moving companies to manage and scale their businesses.
YMM Interstate LLC ("YMM Interstate") was incorporated on September 9, 2022 and is a wholly owned subsidiary of YMM LLC that administers long distance moves throughout the United States with our Franchise Partners acting as agents locally and with the use of the third parties internationally.
YMM Reno LLC ("YMM Reno") was incorporated on November 5, 2024 and is a wholly owned franchise location for residential and commercial moving services in of Reno, Nevada.
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
2. EARNINGS AND EXPENSES
Following is a discussion of the Company's financial results for the three months ended March 31, 2025 and 2024.
Three months ended March 31, 2025 and 2024
Revenue
The Company's revenues are mainly from royalties charged on a fixed percentage of sales earned by the franchise locations, residential and commercial moves performed by the Company's corporately owned locations, and revenue from interstate and long distance moving services. Revenues for the three months ended March 31, 2025 were $2,320,540 compared to $2,040,793 for the three months ended March 31, 2024. The increase is due to the growth of local moving revenue in MCSB, YMM Phoenix and YMM Reno, as well as growth of long distance moving offering through its YMM Interstate. Local moving revenue was $538,851 for the three months ended March 31, 2025 vs. $353,809 for the three months ended March 31, 2024. Long distance moving revenue was $940,011 for the three months ended March 31, 2025 vs. $853,062 for the three months ended March 31, 2024.
Cost of revenue
The Company's cost of revenue for the three months ended March 31, 2025 was $929,965 compared to $885,014 for the three-months ended March 31, 2024. The increase is mainly due to additional cost of local moving associated with movers' wages and gas. For the three months ended March 31, 2025, cost of long distance moving was $666,937 (three months ended March 31, 2024 - $713,145). The Company's corporately owned locations incurred cost of revenue for the three months ended March 31, 2025 related to movers' wages of $177,597 (three months ended March 31, 2024 - $119,468), gas expense of $32,847 (three months ended March 31, 2024 - $32,847), merchant fees of $33,742 (three months ended March 31, 2024 - $23,998) and boxes and supplies of $18,842 (three months ended March 31, 2024 - $12,634).
Expenses
The Company's expenses for the three months ended March 31, 2025 were $1,931,796 compared to $1,449,691 for the three-months ended March 31, 2024. Major variances are as follows:
- Wages of $684,390 for the three months ended March 31, 2025, compared to $613,097 for the three months ended March 31, 2024. The increase is mainly due to additional staff and commissions within National Sales Center and additional administrative staff for the long distance moving operations.
- Marketing and promotion of $416,785 for the three months ended March 31, 2025, compared to $233,534 for the three months ended March 31, 2024. The increase is due to a higher marketing spend to attract new clients for corporately owned locations and long distance moving services, and increased co-op marketing spend with franchise network.
- Office and general of $281,541 for the three months ended March 31, 2025, compared to $209,929 for the three months ended March 31, 2024. The increase is primarily due to the implementation of new accounting software, additional rent within its franchisor operations, and newly established operations of YMM Reno.
- Conference expenses of $122,939 for the three months ended March 31, 2025, compared to $39,973 for the three months ended March 31, 2024. The increase is due to the annual franchisee conference held in Fort Lauderdale in February of 2025.
- Truck and auto of $105,948 for the three months ended March 31, 2025, compared to $46,489 for the three months ended March 31, 2024. The increase is due to increased business activity within its
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
local operations of MCSB and YMM Phoenix, as well as newly established operations of YMM Reno.
- Professional fees of $105,027 for the three months ended March 31, 2025, compared to $47,382 for the three months ended March 31, 2024. The increase is due to a higher legal costs of opening and registration new corporate location in YMM Reno and continuous legal expenses of the franchisor.
Net other expense for the three months ended March 31, 2025 came to $50,836 compared to a net other expense of $50,182 for the three months ended March 31, 2024.
A comparison of the Company's financial position at March 31, 2025 vs. March 31, 2024 is set out below:
| March 31, 2025 | December 31, 2024 | ||
|---|---|---|---|
| Total assets | $ | 1,794,785 | $ 1,876,253 |
| Total liabilities | $ | 4,973,729 | $ 4,463,640 |
| Non-current financial liabilities | $ | 2,548,471 | $ 2,516,213 |
3. LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2025, the Company had working capital deficit of $1,041,388 compared to working capital deficit of$ 519,466 at December 31, 2024. The Company's main sources of funding was additional related party loan issued on February 27, 2025.
On October 9, 2019, the Company signed a loan agreement with a company controlled by a director that would allow the Company to borrow up to $1,189,160. The Company borrowed$ 989,160 on October 9, 2019 and an additional $200,000 on November 7, 2019. The loan is secured and bears an annual interest rate at (10\%$ . The Company agreed to repay the amount borrowed in 60 equal monthly installments on the first business day of each month commencing January 2021 and ending December 2025. The loan was recorded at face value of $1,189,160 less the value of the equity component of the loan of $63,140, determined by discounting the loan at an appropriate market rate of interest of 12%. The lender has waived the installment payments for the next 12 months. As of March 31, 2025, the Company has not made any repayment installments. On August 24, 2020, $200,922 of the loan plus any interest accrued thereon was assigned to another director of the Company. During the period ended March 31, 2025, the Company recorded interest of $49,236 (March 31, 2024 - $44,436) on the loan. The balance of the loan at March 31, 2025 is $1,755,500 (December 31, 2024 - $1,706,263).
On August 24, 2020, due to the loan assignment described above, the Company was indebted to a director in the amount of $200,922. The loan is secured and bears an annual interest rate at (10\%$ . The Company agreed to repay the amount borrowed in 60 equal monthly installments on the first business day of each month commencing January 2021 and ending December 2025. The loan was recorded at face value of )200,922 less the value of the equity component of the loan of $8,997, determined by discounting the loan at an appropriate market rate of interest of $12\%$ . The lender has waived the installment payments for the next 12 months. As of March 31, 2025, the Company has not made any repayment installments. During the period ended March 31, 2025, the Company recorded interest of $8,965 (March 31, 2024 - $8,091) on the loan. The balance of the loan at March 31, 2025 is $324,800 (December 31, 2024 - $315,835).
On October 9, 2019, the Company received a loan in the amount of $128,797 from a company jointly controlled by a director. The loan is unsecured and bears an annual interest rate of (10\%$ . The Company agreed to repay the amount borrowed in 60 equal monthly installments on the first business day of each month commencing January 2021 and ending December 2025. The loan was recorded at face value of )128,797 less the value of the equity component of the loan of $7,744, determined by discounting the loan
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
at an appropriate market rate of interest of $12\%$ . The lender has waived the installment payments for the next 12 months. As of March 31, 2025, the Company has not made any repayment installments. During the period ended March 31, 2025, the Company recorded interest of $\$6,314$ (March 31, 2024 - $\$5,699$ ) on the loan. The balance of the loan at March 31, 2025 is $\$225,536$ (December 31, 2024 - $\$219,222$ ).
On March 24, 2022, the Company received a loan in the amount of US$75,000 from a company jointly controlled by a director. The loan is unsecured, bears interest at 10%, and is due on demand. The lender has waived the installment payments for the next 12 months. As of March 31, 2025, the Company has not made any repayment. During the period ended March 31, 2025, the Company recorded interest of $3,504 (March 31, 2024 - $3,002) on the loan. The balance of the loan at March 31, 2025 is $145,846 (December 31, 2024 - $142,339).
On February 29, 2024, the Company received a loan in the amount of US$300,000 (CAD$407,100) from a company jointly controlled by a director. The loan is unsecured and bears an annual interest rate of 12%. The Company agreed to repay principal and interest in two equal instalments on August 15, 2024 and September 30, 2024. Upon initial recognition the Company recognized an equity component of $4,678 against the balance of the loan. The equity value was determined by discounting the balance of the loan at an appropriate market rate of interest of 14%. During the period ended March 31, 2025, the Company recorded interest and accretion of $Nil (March 31, 2024 - $4,777) on the loan. The loan was repaid in full on October 4, 2024.
On February 27, 2025, the Company received a loan in the amount of US$130,696 (CAD$188,489) from a company jointly controlled by a director. The loan is on demand, unsecured and bears an annual interest rate of 12%. During the period ended March 31, 2025, the Company recorded interest of $1,969 (March 31, 2024 - $Nil) on the loan. The balance of the loan at March 31, 2025 is $189,860 (December 31, 2024 - $Nil). Subsequent to period ended March 31, 2025, the loan was repaid in full on May 9, 2025.
Cash flows
Analysis of cash flows:
| For the three months ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | ||
| Net cash used in operating activities | $ | (428,456) $ | (167,778) |
| Net cash provided by financing activities | 157,843 | 379,030 | |
| Increase (decrease) in cash | $ | (270,613) $ | 211,252 |
Operating activities
For the three months ended March 31, 2025, cash flows used in operating activities were $428,456 compared to $167,778 of cash flows used for the three months ended March 31, 2024. The decrease of $260,678 is primarily driven by increase in operating expenses for the period as more fully described in section 2 of this document.
Financing activities
Cash flows provided by financing activities for the three months ended March 31, 2025 were $157,843 compared to $379,030 for the three months ended March 31, 2024. The change of $221,187 is mainly attributable to higher proceeds from related party loans received in the comparative period.
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
4. SELECTED QUARTERLY INFORMATION
The following table provides a brief summary of the Company's financial results for each of the eight most recent quarters and has been prepared in accordance with IFRS Accounting Standards:
SUMMARY OF QUARTERLY RESULTS
| Quarter ended | Mar. 31 2025 | Dec. 31 2024 | Sep. 30 2024 | Jun. 30 2024 | Mar. 31 2024 | Dec. 31 2023 | Sep. 30 2023 | Jun. 30 2023 |
|---|---|---|---|---|---|---|---|---|
| Revenue | $ 2,320,540 | $ 2,103,550 | $ 3,751,762 | $ 3,310,010 | $ 2,040,793 | $ 2,034,837 | $ 2,674,725 | $ 2,053,182 |
| Cost of revenue | 929,965 | 833,879 | 1,784,924 | 1,481,663 | 885,014 | 636,544 | 962,846 | 518,189 |
| Expenses and other items | 2,001,159 | 2,171,773 | 1,670,039 | 1,570,391 | 1,574,328 | 3,318,924 | 1,539,575 | 1,627,662 |
| Net comprehensive income (loss) | (610,584) | (902,102) | 296,799 | 257,956 | (418,549) | (1,920,631) | 172,304 | (92,669) |
| Gain (loss) per share, basic | (0.06) | (0.09) | 0.03 | 0.03 | (0.04) | (0.20) | 0.02 | (0.01) |
| Gain (loss) gain per share, diluted | (0.06) | (0.09) | 0.03 | 0.03 | (0.04) | (0.19) | 0.02 | (0.01) |
5. RELATED PARTY TRANSACTIONS
Interest recorded on related party loans were as follows:
| Three months ended | March 31, 2025 | March 31, 2024 |
|---|---|---|
| Interest on related party loans | $ 69,988 | $ 66,005 |
Codix Management Ltd ("Codix") is a private Canadian (BC) company which performs financial reporting, consulting, and management services for the Company. Codix is jointly controlled by Mr. Laurie Baggio (CEO, director) and Mr. Lance Tracey (director). The Company pays Codix monthly fees as follows:
a) a monthly retainer of $19,000 for accounting, CFO, and related administrative services recorded within management and consulting expenses; and
b) monthly office rent and storage fees of $1,950 recognized as a capital lease.
Payments to companies controlled by key management and directors during the periods ended March 31, 2025 and 2024 were as follows:
| Three months ended | March 31, 2025 | March 31, 2024 |
|---|---|---|
| Fees to a company with common directors | $ 71,383 | $ 71,162 |
| Lease payments made to a company with common directors | 11,753 | 5,850 |
| Interest accrued to a company with common directors | 2,350 | 2,135 |
| Total | $ 85,486 | $ 79,148 |
Payments made to companies controlled by key management and directors were included in management and consulting on the condensed interim consolidated statements of loss and comprehensive loss.
Included in accounts receivable and other receivables at March 31, 2025 is an amount of $213,060 (December 31, 2024 - $291,000) owing from companies controlled by directors of the Company. Amounts receivable from related parties are unsecured, non-interest bearing and have terms of repayment of net 30.
Included in accounts payable and accrued liabilities at March 31, 2025 is an amount of $334,644 (December 31, 2024 - $430,805) owing to companies controlled by directors of the Company. Amounts payable to related parties are unsecured, non-interest bearing and have no specified terms of repayment.
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
6. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, restricted cash, accounts and other receivables, customer deposits, trade and other payables, financing liability, and related party loans. The Company's financial instruments measured at fair value consist of cash and restricted cash. Accounts and other receivables, trade and other payables, customer deposits, related party loans and financing liabilities are measured at amortized cost. Upon recognition, the fair values of the related party loans are estimated by discounting cash flows using interest rates of debt instruments with similar terms, maturities, and risk profile. With the rise in interest rates in 2025 and 2024, the fair value of related party loans would result in a $199,684 (December 31, 2024 - $203,083) lower value than the current carrying value.
Fair Value
Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy based on the degree to which the inputs used to determine the fair value are observable.
The three levels of the fair value hierarchy are:
- Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and
- Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Board of Directors approves and monitors the risk management processes. The Company has exposure to the following risks from its use of financial instruments:
- Interest rate risk
- Credit risk
- Liquidity risk
- Currency risk
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. All of the Company's related party loans payable and financing liabilities have a fixed interest rate therefore the Company is not currently exposed to interest rate risk.
Credit Risk
Credit risk is the risk of potential loss to the Company if the counter party to a financial instrument fails to meet its contractual obligations. The Company holds its cash balances in reputable financial institutions in both Canada and USA and considers their credit risk to be low. The Company's receivables consist of trade receivables and receivables from a related party. Based on the evaluation of receivables at March 31, 2025 and December 31, 2024, the Company believes that its receivables are collectable, and has determined credit risk to be low. During the period ended March 31, 2025 the Company recognized bad debt expense of $4,137 (March 31, 2024 - $43,005).
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities. The Company manages liquidity risk by maintaining sufficient cash to enable settlement of transactions on the due date. Management monitors the Company's contractual obligations and other expenses to ensure adequate liquidity is maintained.
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
Currency Risk
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. The Company is exposed to foreign currency exchange risk as it has cash, receivables, payables, and related party loans denominated in currencies other than the functional currency of the Company.
The Company's reporting currency is the Canadian dollar and as such the Company is exposed to foreign currency fluctuations on its US dollar denominated financial instruments. As at March 31, 2025, the Company had US dollar denominated cash of US$145 (December 31, 2024 – US$145), US dollar denominated trade payables of US$12,974 (December 31, 2024 – US$6,821), and loan payable of US$75,000 (December 31, 2024 – US$75,000). As at March 31, 2025, a 10% change in exchange rates between US dollars and Canadian dollars would impact the Company's net income by approximately $16,429 (December 31, 2024 – $15,207).
7. RISK FACTORS AND UNCERTAINTIES
Management is responsible for the evaluation and management of risk factors affecting the Company. While management is unable to eliminate risks, the Company is intent on identifying and mitigating such risks as much as is reasonably possible. These risk factors are not a definitive list of all risk factors associated with the Company and its business.
Market risk
The Company relies on activity in the housing market as a means to drive franchise system revenue, particularly in single family homes. When there is demand in the housing market, the opportunity to perform moves increases. Interest rate changes made by central banks in Canada and the United States could negatively impact the demand for home sales. Any decline in home sales may have a material adverse effect on the Company's financial results.
Inflation
As inflation continues to rise, the Company will experience pressure on its costs including, but not limited to, wages, gas, supplies, marketing, office, truck, professional fees, travel, meals and entertainment. Any sustained increases without a corresponding increase in revenues may have a material adverse effect on the Company's financial results.
Interest rates
Central banks in Canada and the United States have been steadily increasing interest rates during the period. Should the Company require additional 3rd party financing in the future, the Company will incur higher interest expense.
Reliance on key personnel
The success of the Company depends on the abilities, experience, efforts and knowledge of respective senior management and other key employees, including its ability to retain and attract effective management and employees. The loss of services from key personnel could have a material adverse effect on the Company's business, financial condition, results of operations or future prospects, particularly since it does not enter into non-compete arrangements with senior management and other key employees in certain circumstances. Future growth plans may require hiring of additional employees, increase the demands on management, and produce risks in both productivity and retention levels. The Company may not be able to attract and retain additional qualified management and employees as needed in the future. There can be no assurance that the Company will be able to manage its growth, and any failure to do so could have a material adverse effect on its business, financial condition, and future prospects.
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
Truck availability risk
We currently have relationships with a small number of truck vendors over which we have no operational or financial control and no influence in how these vendors conduct their businesses. Suppliers to truck vendors could among other things, extend delivery times, raise prices and limit supply due to their own shortages and business requirements. Interruption in the supply of trucks from these vendors could delay our ability to maintain, grow and expand our corporate location footprint. If our relationships with any of these truck vendors were to terminate, there is no guarantee that our remaining truck vendors would be able to handle the increased equipment supply required to maintain and grow our network at our desired rates. There is also no guarantee that business relationships with other key truck vendors could be entered into on terms desirable or favorable to us, if at all. Such equipment supply issues could adversely affect our business, results of operations and financial condition.
Systems price risk
The Company relies on certain software programs to run its call center and operations that may have few alternatives or competitors in the market. The Company does try to enter into longer term arrangements to lock in a particular price, however it cannot anticipate whether on contract renewal the vendor will want to increase the price it would like to charge. There may be a material adverse effect on the Company's results of operations should it not have a viable alternative to migrate to or use as a negotiating point.
Competition risk
The market for residential and commercial moving services is highly competitive. One or more of the Company's competitors could offer services similar to those offered by the Company at significantly lower prices, which would cause downward pressure on the prices the Company would be able to charge for its services. If the Company is not able to charge the prices it anticipates charging for its services, there may be a material adverse effect on the Company's results of operations and financial condition.
Return on investment in associate is not guaranteed
The amount of return on Karve, if any, is highly variable and not guaranteed. Karve may be successful and generate significant returns, or may not be successful and only generate small returns, if any at all. Investment returns that the Company may receive will be variable in amount, frequency, and timing.
Litigation risk
From time to time, we may be subject to litigation or dispute resolution relating to any number or type of claims, including claims for damages related to undetected errors or malfunctions of our services and products, claims related to previously-completed acquisition transactions or claims relating to applicable securities, franchise and transportation laws. Litigation may seriously harm our business because of the costs of defending the lawsuit, diversion of employees' time and attention and potential damage to our reputation. We may also have disputes with key suppliers for damages incurred which, depending on resolution of the disputes, could impact the ongoing quality, price or availability of the services or products we procure from the supplier. Limitation of liability provisions in certain third-party contracts may not be enforceable under the laws of some jurisdictions. As a result, we could be required to pay substantial amounts of damages in settlement or upon the determination of any of these types of claims and incur damage to our reputation and products. The likelihood of such claims and the amount of damages we may be required to pay may increase as our customers increasingly use our services. Our insurance may not cover potential claims or may not be adequate to cover all costs incurred in defense of potential claims or to indemnify us for all liability that may be imposed. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby harming our operating results and leading analysts or potential investors to lower their expectations of our performance, which could reduce the trading price of our common shares.
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
Cyber security risks
As the Company continues to increase its dependence on information technologies to conduct its operations, the risks associated with cyber security also increase. The Company relies on management information systems and computer control systems. Business and supply chain disruptions, plant and utility outages and information technology system and network disruptions due to cyber-attacks could seriously harm its operations and materially adversely affect its operation results, Cyber security risks include attacks on information technology and infrastructure by hackers, damage or loss of information due to viruses, the unintended disclosure of confidential information, the issue or loss of control over computer control systems, and breaches due to employee error. The Company's exposure to cyber security risks includes exposure through third parties on whose systems it places significant reliance for the conduct of its business. The Company has implemented security procedures and measures in order to protect its systems and information from being vulnerable to cyber-attacks. The Company believes these measures and procedures are appropriate. To date, it has not experienced any material impact from cyber security events. However, it may not have the resources or technical sophistication to anticipate, prevent, or recover from rapidly evolving types of cyber-attacks. Compromises to its information and control systems could have severe financial and other business implications.
8. OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this MD&A, the Company has not entered into any off-balance sheet arrangements.
9. SIGNIFICANT JUDGEMENTS AND ESTIMATES
The most significant accounting judgements and estimates are described in Note 2 with the associated significant accounting policies in Note 2 to our consolidated financial statements for the year ended December 31, 2024.
10. OUTSTANDING SHARE DATA
As of March 31, 2025 and the date of this report, the Company had 10,000,000 Class A Shares issued and outstanding.
During the year ended December 31, 2020, the Company established a pioneer stock option plan (the "Plan"). The purpose of the Plan is to enhance the value of the franchise system and to align the interests of the franchisor and franchisees in the system by having the Company offer opportunities to early franchisees and other contributors to the system to participate in the Company's growth and success by acquiring and maintaining stock ownership in the Company. The aggregate number of shares that may be issued pursuant to the exercise of options awarded under the pioneer stock option plan is 500,000 Class A shares. Upon initial recognition, the Company had issued 333,330 pioneer stock options to early franchisees of the system exercisable at a price of $0.01 per share. On February 14, 2025, the Company issued an additional 166,670 pioneer stock options to its franchise partners under the pioneer stock option plan. In contemplation of a corporate transaction with Mobio Technologies Inc. ("Mobio") all of the 500,000 outstanding options were exercised and as a result 500,000 of the Class A Shares of the Company were issued in exchange for cash at an exercise price of $0.01 per share. There were no pioneer stock options outstanding at March 31, 2025.
Tracksuit Movers Inc.
Management's Discussion and Analysis
Three months ended March 31, 2025 and 2024
11. SUBSEQUENT EVENTS
On April 24, 2025, Mobio has completed a reverse takeover transaction by acquiring 100% of the Company via a five-to-one share exchange. Mobio exchanged 50,000,000 of its shares at a value of $0.20 per share for all of the outstanding shares of the Company (the "Transaction"). As part of the Transaction, Mobio completed a private placement of $1,800,000 at a price of $0.20 per share and settled related party loans with the balance of $1,454,497 for 7,272,486 Mobio shares at a price of $0.20 per share. The acquisition of the Company was subject to approval by disinterested shareholders of Mobio and acceptance of the transaction by the TSX Venture Exchange.
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