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RenoWorks Software Inc. — Management Reports 2026
Apr 22, 2026
45256_rns_2026-04-21_d1477e65-fb6a-459c-9af1-24efd761eb17.pdf
Management Reports
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RenoWorks Software Inc. Management’s Financial Discussion and Analysis (April 21, 2026)
This management discussion and analysis of RenoWorks Software Inc.’s (referred to in this discussion as “RenoWorks” or the “Company”) financial condition and results of operations focuses on key statistics from its financial statements for the year ended December 31, 2025 and pertains to known risks and uncertainties relating to its business. The following discussion and analysis should be read in conjunction with the year ended December 31, 2025 financial statements and accompanying notes thereto. Additional information about the Company can be obtained at www.sedarplus.ca.
Special Note Regarding Forward-Looking Information and Statements
This MD&A offers our assessment of RenoWorks’ future plans and operations and contains forward-looking statements as defined under applicable Canadian securities legislation including our sensitivity to technological obsolescence referred to under Research and Development on page 4, our sensitivity to the change in the value of the Canadian dollar versus the US dollar referred to under Foreign Exchange on page 5, capital expenditure projections included in investing activities on page 9, our sensitivity to changes in building products industry market conditions referred to under Cyclicality in the Construction and Renovation Industries on page 13, cloud hosting and infrastructure risks associated with our third-party hosting provider on page 14, and our dependence upon adoption of technology in the building products industry referred to under Dependence on the Adoption of Computers in the Construction Industry on page 13. These forward-looking statements typically contain the words “anticipate,” “believe,” “estimate,” “intend,” “expect,” “may,” “will,” “should,” “potential”, “plan” or other similar terms.
Readers are cautioned that our expectations, estimates, projections and assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. With respect to forward-looking statements contained within this MD&A, we have made the following key assumptions:
- our sensitivity to the change in the value of the Canadian dollar versus the US dollar was based on our forecast of sales in US dollars as well as the exchange rate for the Canadian dollar similar to the current market rate;
- our reliance on positive market conditions in both the remodelling and new home construction industries in both the US and Canada was based on our current strategic plan;
- our reliance on positive adoption of technology was based on our current strategic plan.
Certain statements, other than statements of historical fact, are forward-looking information that involves various risks and uncertainties. Such statements relating to, among other things, the prospects for the Company to enhance operating results, the ability of the Company to find customers for its artificial intelligence based solutions, 3D model and measurement solutions, the ability of the Company to find suppliers of aerial measurement data and its ability to successfully integrate such data into the Company’s technology platform, are necessarily subject to risks and uncertainties, which are significant in scope and nature.
Our actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. We can give no assurance that any of the events anticipated will transpire or occur or, if any of these events do occur, what benefits or costs we will derive from these events. By their nature, forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the impact of general economic conditions, changing domestic industry conditions, currency fluctuations, interest rates, competition from other industry participants (including new entrants), stock-market volatility, the ability to access sufficient capital from internal and external sources and additional risk factors discussed in other documents we file from time to time with securities regulatory authorities, which are available through the Internet on SEDAR at www.sedarplus.ca or, upon request, without charge from us.
The forward-looking information contained in this MD&A is expressly qualified by this cautionary statement. Our assumptions relating to the forward-looking statements referred to above are updated quarterly and, except as required by law, we do not undertake to update any other forward-looking statements.
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Throughout this document, reference is made to “working capital,” “Adjusted EBITDA,” and “Annual Recurring Revenue” (“ARR”), which are non-IFRS measures. Management believes that working capital, defined as current assets less current liabilities, is an indicator of the Company’s liquidity and its ability to meet its current obligations. Management believes that Adjusted EBITDA, which normalizes earnings to exclude certain amounts, is a useful measure for comparing results from one period to another. Management also believes that ARR, which represents the annualized value of recurring customer contracts in effect at a given point in time, is a useful indicator of the Company’s revenue visibility, sustainability, and growth trajectory. ARR excludes revenues that are non-recurring, variable, or one-time in nature and may not be indicative of future revenue. Readers are cautioned that these non-IFRS measures may not be comparable to similar measures used by other companies. Readers are also cautioned not to view these non-IFRS measures as an alternative to financial measures calculated in accordance with International Financial Reporting Standards (“IFRS”).
Company Overview
Renoworks has developed and distributes digital visualization software for the renovation and new home construction industry. Its sales and marketing efforts are presently focused on the United States and Canada.
Selected Annual Information
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| Revenue | $7,739,358 | $6,942,578 | $6,292,601 |
| Net Income (Loss) | $18,519 | $133,058 | ($497,771) |
| Net Income (Loss) per share | $0.00 | $0.00 | ($0.01) |
| Total Assets | $2,799,907 | $2,641,419 | $1,672,766 |
For the year ending December 31, 2025, revenue increased from the previous years ending in 2024 and 2023. This is mainly a result of a 33% increase in licensing and hosting revenue and a 38% increase in implementation revenue as compared to 2024.
The Company continues to invest in the development and enhancement of its artificial intelligence (“AI”) application suite. Sales and marketing initiatives remain centered on driving adoption of AI-based Licensing and hosting solutions among both new and existing customers, thereby reducing reliance on customized design services. This strategic direction gained traction commencing in the third quarter of 2025, as evidenced by higher Licensing and hosting revenues and a corresponding decrease in Design services revenue.
Net income for the year ended December 31, 2025, decreased by $114,539 compared to a net income of $133,058 in the year ended December 31, 2024. This decrease was primarily driven by increased overall expenditures to support the company’s growth as well as decreased foreign exchange gains.
The Company continues to make targeted investments in AI, data science, contractor solutions, and overall platform functionality to advance its long-term strategic objectives and strengthen relationships of strategic importance. Looking ahead, management expects continued customer adoption of scalable AI-driven technologies, leading to ongoing significant growth in recurring Licensing and hosting revenues and significant decreases in Design services revenue.
By design, this transition reduces non-annual recurring revenue (non-ARR) sources while expanding the Company’s annual recurring revenue (ARR) base. As this shift continues, management anticipates further improvements in gross profit margins, greater revenue predictability, and increased recurring revenues.
Results of Operations for the Year ended December 31, 2025
| 2025 | 2024 | |
|---|---|---|
| Revenue | $7,739,358 | $6,942,578 |
| Net Income (Loss) | $18,519 | $133,058 |
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Revenue
For the year ended December 31, 2025 the Company earned aggregate revenues of $7,739,358 comprised of $2,527,453 from design services, $3,662,811 from licensing and hosting, $851,575 for libraries, and $697,519 from implementation fees. This is a 12% increase from the $6,942,578 revenues earned in the year ended December 31, 2024 comprised of $2,962,942 from design services, $2,764,398 from licensing and hosting, $709,257 from libraries and $505,981 from implementation fees. The increased revenue is primarily attributable to an increase in licensing and hosting revenue of 33% in 2025 compared to 2024. Design services revenue decreased by 15% in 2025 compared to 2024. For the year ended December 31, 2025, 28%, (2024 - 34%) of the revenue was from one customer.
The Company continues to invest in its artificial intelligence ("AI") application suite, with sales and marketing efforts directed toward encouraging both new and existing customers to adopt AI-driven solutions and reduce their reliance on customized design services. This strategic shift is gaining traction, as evidenced by the 33% increase in Licensing and hosting revenues and a 15% decline in Design services revenue during the year ended December 31, 2025.
With respect to the Company's significant customer concentration of 28% of revenue in 2025 (34% - 2024), this customer has historically generated revenue primarily from Design services. During the fourth quarter of 2025, the Company successfully completed the full implementation of its AI application suite for this customer. As a result, management expects a material shift in the revenue composition attributable to this customer, characterized by a significant reduction in Design services revenue and a corresponding increase in Licensing revenue.
Commencing in 2026, the Company expects this transition to result in a relatively lower overall concentration of revenue from this customer, together with increased annual recurring revenue ("ARR") derived from enterprise Licensing and hosting arrangements and a corresponding decrease in non-recurring Design services revenue. Management believes this shift aligns with the Company's long-term strategic focus on scalable, recurring revenue streams and is expected to enhance revenue predictability and gross profit margins over time.
ARR is a non-IFRS financial measure and includes revenue attributable to enterprise Licensing and hosting arrangements and RW PRO contractor subscription licensing. ARR from these revenue sources totaled $3,662,811 in 2025, representing an increase of 33% from $2,764,398 in 2024.
The Company's Annual Recurring Revenue (ARR) continues to be driven primarily by enterprise licensing and hosting activities. In 2025, the enterprise segment delivered strong performance across key operating metrics, reflecting both sustained customer demand and improved retention dynamics. A comparison of enterprise ARR metrics for 2025 and 2024 is summarized below:
| 2025 | 2024 | |
|---|---|---|
| Enterprise ARR growth rate | 29% | 17% |
| Enterprise customer churn rate | 9% | 11% |
| Enterprise gross revenue retention rate | 88% | 88% |
| Enterprise net revenue retention rate | 119% | 108% |
Enterprise ARR growth accelerated to 29%, supported by lower customer churn and increased expansion activity within the existing customer base. Net revenue retention improved to 119%, reflecting higher adoption of add-on AI functionality. Gross revenue retention remained stable year-over-year at 88%.
A component of the Company's ARR in 2025 and 2024 is attributable to RW PRO subscription licensing. RW PRO, launched in November 2022, remains in an early and rapidly developing stage of its product lifecycle. The Company believes that the continued success of RW PRO subscription licensing is closely tied to contractor adoption. In 2025, new customer additions continued to grow and we experienced lower churn rates as the segment started to normalize following the initial stage of early adopters in 2023 - 2024.
Overall, the Company remains focused on driving sustainable ARR growth across both enterprise and contractor segments by enhancing product capabilities, expanding market reach, and improving customer retention.
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Net Income/Loss
The Company’s net income for the year ended Dec 31, 2024, was $18,519, a decrease of $114,539 compared to net income of $133,058 for the year ended December 31, 2024. The decrease in net income as compared to the previous fiscal year is primarily attributable to increased selling, general and administrative expenses as well as decreased foreign exchange gains. Licensing and hosting revenue in the fiscal year increased 33% compared to the previous fiscal year while design services revenue decreased by 15%. Software and licensing revenue has a higher gross margin than design services revenue resulting in an increase of 3% in gross margins in 2025 as compared to 2024. The Company has invested in activities to capitalize on opportunities to market its Contractor offerings, AI solutions, and data science and analytics to the North American remodel industry.
Adjusted EBITDA
This non-IFRS measure does not have a standardized meaning which may limit comparability. The Company calculates adjusted EBITDA as follows:
| 2025 | 2024 | |
|---|---|---|
| Net Income | $18,519 | $133,058 |
| Add: | ||
| Depreciation | $19,133 | $21,857 |
| Net finance income | ($34,288) | ($9,523) |
| Share-based compensation | $115,464 | $57,772 |
| Adjusted EBITDA | $118,828 | $203,164 |
The Company’s Adjusted EBITDA for the year ended December 31, 2025 was a positive $118,828, a decrease of $84,336 compared to a positive Adjusted EBITDA of $203,164 for the year ended in 2024, primarily attributable to increased overall company expenditures to support growth, as well as a decrease in foreign exchanges gains.
Expenditures
Cost of sales and gross margin
| 2025 | 2024 | |
|---|---|---|
| Salaries | $890,396 | $904,658 |
| Sales commissions | $308,353 | $220,113 |
| External third-party costs | $578,138 | $697,557 |
| Total cost of sales | $1,776,887 | $1,822,328 |
Cost of sales for the year ended December 31, 2025 totaled $1,776,887 yielding a gross margin of 77% on revenues compared to a total of $1,822,328 yielding a gross margin of 74% in the year ended December 31, 2024. The increase in gross margin percentage can be primarily attributed to an increase in software Licensing and hosting revenue of 33%, which has a higher gross margin percentage compared to Design services revenue. Cost of sales includes costs of photography of exterior building products, commissions, credit card processing fees, contractor fees, production costs of retail software, and an allocation of certain internal employees’ direct time incurred on provision of implementation services.
Research and development
Research and development costs of $1,886,276 for the year ended December 31, 2025, increased $143,618 compared to $1,742,658 incurred in the year ended December 31, 2024. Actual research and development costs for 2025 were $1,916,498 which were reduced by $30,222 which reflects the receipt of investment tax credits due to expenditures in scientific research and experimental development (“SR&ED”). Comparing actual costs incurred before SR&ED, the increase in research and development investment in 2025 is attributable to investing in AI, RW PRO, and Data Science and Analytics. The Company remains focused on building an enterprise and contractor software platform that can facilitate software and content as a service to the North American remodel industry. We continue to invest in areas including contractor offerings, AI solutions, data science and analytics, manufacturer product library database, and general platform functionality to facilitate our vision. The Company maintains its commitment to invest in its software development activities. The Company’s management believes that significant expenditures will be required long-term on an ongoing basis in order to minimize technological obsolescence risk and to accelerate customer acceptance and
adoption of the digital visualization products. It is management's belief that as revenues are earned from existing commercially-available products, that such revenues will be a significant source of funding for incremental product research and development expenditures.
Selling, general and administration
| 2025 | 2024 | |
|---|---|---|
| Salaries and wages | $1,630,008 | $1,630,287 |
| Government grant | - | (8,438) |
| Hosting and software | 831,930 | 770,846 |
| Sales and marketing | 676,366 | 594,519 |
| Professional fees | 665,544 | 314,732 |
| Other general and administrative | 145,258 | 95,758 |
| Share-based compensation | 115,464 | 57,772 |
| Office and rent | 38,231 | 32,412 |
| Depreciation | 19,133 | 21,857 |
| Bad debt expense | 31,963 | 15,002 |
| Training and development | 7,038 | 11,638 |
| Total general and administration | $4,160,935 | $3,536,385 |
Selling, general and administration costs of $4,160,935 for the year ended December 31, 2025 increased$ 624,550 compared to $3,536,385 incurred in the year ended December 31, 2024. To support overall company growth, overall expenditures increased primarily attributable to increased expenditures for professional fees, sales and marketing costs, share based compensation, other general and administration, hosting and software costs, and increased bad debt expense. As the Company expands the deployment of AI software applications, the requirement for hosting services expenditures increases. Professional fees increased as the Company utilized more external contractors to provide management services for marketing and software development programs as well as costs for investor relations and other financial advisory services. Included in other general and administrative costs is $39,495 of costs associated with US state sales tax. The company did not receive a government grant in 2025 (2024 - $8,438)
Foreign exchange
The Company experienced foreign exchange gains of $68,971 in the year ended December 31, 2025 compared to exchange gains of$ 282,328 for the comparable period in 2024 as a result of the exchange movement between the Canadian and United States dollars. Expenses for the year ended December 31, 2025 and 2024 include both United States and Canadian dollar-denominated expenditures. To the extent that the Canadian dollar strengthens against the United States dollar, expenses incurred in United States dollars will be recorded at a lower Canadian dollar equivalent on translation. The majority of the 2025 and 2024 revenues were received in United States dollars. As the Canadian dollar strengthens against the United States dollar, sales made in United States dollars are recorded at a lower Canadian dollar amount upon translation. It is anticipated that a substantial amount of the Company's future revenues will continue to be denominated in United States dollars. Movements in exchange rates may have a significant impact on financial results. The Company bills its United States customers in United States dollars, collects in United States dollars, holds deposits in United States dollars and converts cash into Canadian dollars as it deems appropriate. Timing differences on recording and collection of United States dollars versus conversion to Canadian dollars can result in exchange gains or losses on all monetary items including accounts receivable. To the extent the Company maintains United States dollar cash and other working capital balances, it is exposed to foreign exchange risk.
The Company has direct exposure to foreign currency exchange rate risk as many of the Company's customers are invoiced in US currency. As at December 31, 2025, if the Canadian dollar strengthened by $1\%$ with all other variables held constant, it would result in a decrease in net income by $\$36,395$ (December 31, 2024 - $\$14,424$ ). An equal and opposite impact would have occurred to net income had foreign exchange rates weakened by $1\%$ .
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Results of Operations for the Quarter ended December 31, 2025
| Q4 2025 | Q4 2024 | |
|---|---|---|
| Revenue | $1,723,794 | $1,732,703 |
| Net Income (Loss) | ($94,551) | $135,688 |
Revenue
For the three months ended December 31, 2025 the Company earned aggregate revenue of $1,723,794 compared to $1,732,703 of revenue earned in the three-months ended December 31, 2024. The 1% decrease in revenue is primarily attributable to decreased design services revenues. Revenue for the three months ended December 31, 2025, were comprised of $989,813 from Licensing and hosting, $301,947 from Design Services, $147,819 from Libraries, and $284,215 from Implementation fees. In comparison, revenues for the same period in 2024 included $599,215 from Design Services, $802,548 from Licensing and Hosting, $210,720 from Libraries, and $120,004 from Implementation fees.
The decrease in total revenue during the quarter was due to a decrease of $299,268 in Design services revenue which was partially offset by a $187,265 increase in Licensing and hosting revenue, consistent with the Company's ongoing strategic shift toward recurring, higher-margin revenue streams. The changes in the revenue mix reflect the Company's continued investment in its artificial intelligence application suite and its sales and marketing focus on expanding adoption of AI-driven solutions. This initiative encourages both new and existing customers to transition toward Licensing and Hosting arrangements and reduce reliance on custom Design services. The results of the fourth quarter of 2025 indicate that this strategy is gaining traction, as evidenced by higher Licensing and Hosting revenues and lower Design services revenues compared to the same period in 2024. Management expects this trend to continue in 2026 as the Company advances its sales and marketing efforts to promote scalable, AI-driven technology offerings. This transition is anticipated to result in further reductions in Design services revenue in 2026, offset by growth in Licensing and hosting revenue.
For the three months ended December 31, 2025, approximately 16% of total revenue (2024 – 28%) was derived from one major customer. Historically, this customer primarily utilized the Company's Design services. The customer has now been successfully integrated into the Company's AI application suite, which was fully implemented in the fourth quarter of 2025. This implementation is expected to materially alter the revenue composition from this customer, resulting in a reduction in Design services revenue and an increase in Licensing and hosting revenue.
The reduction in Design services revenue from this customer began in the third quarter of 2025 as part of their preparation for the AI application launch. Management anticipates that overall revenue dependence on this customer will decrease over time as their Licensing revenue grows. This shift is expected to increase the Company's annual recurring revenue from Licensing and hosting activities and reduce non-ARR Design services revenue, contributing to improved revenue predictability, increased ARR, and increased gross margin percentage going forward.
| Q4 2025 | Q4 2024 | % Change | |
|---|---|---|---|
| Licensing and Hosting | $989,813 | $802,764 | 23% |
| Design services | $301,947 | $599,215 | -50% |
| Libraries | $147,819 | $210,720 | -30% |
| Implementation Fees | $284,215 | $120,004 | 137% |
| Total | $1,723,794 | $1,732,703 | -1% |
Net Income/Loss
The Company's net loss for the three months ended December 31, 2025 was $94,551, a decrease of $230,482 compared to net income of $135,931 for the three months ended December 31, 2024. The decrease in profitability is primarily attributable to increased selling, general and administrative expenses and decreased foreign exchange gain. The Company is committed to furthering its data science and AI offerings and may face increased costs for contractors and staff to remain competitive in the market.
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Adjusted EBITDA
This non-IFRS measure does not have a standardized meaning which may limit comparability. The Company calculates adjusted EBITDA as follows:
| Q4 2025 | Q4 2024 | |
|---|---|---|
| Net Income (Loss) | ($94,551) | $135,688 |
| Add: | ||
| Depreciation | $4,996 | $5,612 |
| Net finance income | ($11,491) | ($5,857) |
| Share-based compensation | $22,953 | $18,225 |
| Adjusted EBITDA | ($78,093) | $153,668 |
The Company’s Adjusted EBITDA for the three-months ended December 31, 2025 was a negative $78,093, a decrease of $231,761 compared to a positive adjusted EBITDA of $153,668 for the fourth quarter of 2024. This decrease is primarily attributable to the net loss in the fourth quarter of 2025.
Expenditures
Cost of sales and gross margin
| Q4 2025 | Q4 2024 | |
|---|---|---|
| Salaries | $230,060 | $394,381 |
| Sales commissions | $41,132 | $57,287 |
| External third-party costs | $73,636 | $4,549 |
| Total cost of sales | $344,828 | $456,217 |
Cost of sales for the three-months ended December 31, 2025 totaled $344,828 yielding a gross margin of 80% on revenues compared to a total of $456,217 yielding a gross margin of 74% in the three-months ended December 31, 2024. The fourth quarter 2025 improved margin is due to the decrease in design services revenue, which has the lowest margin of all revenue sources, and the increased revenue from Licensing and hosting, which has a higher margin percentage. Cost of sales includes costs of photography of exterior building products, commissions, credit card processing fees, contractor fees, production costs of retail software, and an allocation of certain internal employees’ direct time incurred on provision of implementation services.
Research and development
Research and development costs of $478,373 for the three-months ended December 31, 2025 increased $30,162 compared to $448,211 incurred in the three-months ended December 31, 2024. The increase in research and development investment in the fourth quarter is attributable to increased personnel costs. We continue to see opportunities to make significant impacts in facilitating changes in how the industry operates and as such are investing in areas including contractor offering, AI, data science and analytics, manufacturer product library database, and general platform functionality to facilitate our vision. The Company maintains its commitment to invest in software development activities for the foreseeable future. The Company’s management believes that significant expenditures will be required in order to minimize technological obsolescence risk and to accelerate customer acceptance and adoption of the digital visualization products. It is management’s belief that as revenues are earned from existing commercially-available products, that such revenues will be a significant source of funding for incremental product research and development expenditures.
Selling, general and administration
| Q4 2025 | Q4 2024 | |
|---|---|---|
| Salaries and wages | $408,149 | $347,942 |
| Hosting and software | $192,175 | $212,750 |
| Sales and marketing | $184,694 | $153,295 |
| Professional fees | $131,476 | $84,629 |
| Other general and administrative | $75,760 | $32,853 |
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| Share-based compensation | $22,954 | $18,225 |
|---|---|---|
| Office and rent | $17,382 | $6,475 |
| Depreciation | $4,996 | $5,612 |
| Bad debt expense | $15,303 | $4,449 |
| Training and development | $2,264 | $3,085 |
| Total general and administration | $1,055,153 | $869,315 |
Selling, general and administration costs of $1,055,153 for the three-months ended December 31, 2025 increased $185,837 compared to $869,315 incurred in the three-months ended December 31, 2024, primarily attributable to increased costs for personnel, bad debt expense, other general and administrative costs, and professional fees.
Foreign exchange
The Company experienced foreign exchange gains of $47,900 in the three-months ended December 31, 2025 compared to an exchange gain of $181,424 for the three-months ended December 31, 2024 as a result of the exchange movement between the Canadian and United States dollars. Expenses for the three-months ended December 31, 2025 and 2024 include both United States and Canadian dollar-denominated expenditures. To the extent that the Canadian dollar strengthens against the United States dollar, expenses incurred in United States dollars will be recorded at a lower Canadian dollar equivalent on translation. The majority of the 2025 and 2024 revenues were received in United States dollars. As the Canadian dollar strengthens against the United States dollar, sales made in United States dollars are recorded at a lower Canadian dollar amount upon translation. It is anticipated that a substantial amount of the Company's future revenues will continue to be denominated in United States dollars. Movements in exchange rates may have a significant impact on financial results. The Company bills its United States customers in United States dollars, collects in United States dollars, holds deposits in United States dollars and converts cash into Canadian dollars as it deems appropriate. Timing differences on recording and collection of United States dollars versus conversion to Canadian dollars can result in exchange gains or losses on all monetary items including accounts receivable. To the extent the Company maintains United States dollar cash and other working capital balances, it is exposed to foreign exchange risk.
Liquidity and Capital Resources
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Total Assets | $2,799,907 | $2,641,419 |
| Total Long-Term Liabilities | $513,861 | $240,467 |
Total Assets
Total Assets were $2,799,907 as at December 31, 2025, an increase of $158,488 compared to $2,641,419 as at December 31, 2024. The increase is primarily due to increase in trade and other receivables and contract assets.
Total Long-Term Liabilities
The Company's long-term liabilities increased to $513,861 as at December 31, 2025 compared to $240,467 at December 31, 2024. The increase is attributable to an increase in deferred revenue.
Cash and Working Capital
The Company's cash at December 31, 2025 was $1,444,728 compared to cash of $1,536,671 at December 31, 2024, a decrease of $91,943.
The Company's working capital at December 31, 2025 was a positive $459,164 compared to a negative working capital of $121,451 at December 31, 2024 an increase of $580,615 primarily due to an increase in Trade and other receivables balances and decrease in deferred revenues balances. Current assets increased by $256,226 due primarily to increased trade and other receivables and contract assets. Current liabilities decreased by $324,389 primarily due to a decrease in deferred revenue balances.
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| Dec 31, 2025 | Dec 31, 2024 | |
|---|---|---|
| Total Current Assets | $ 2,540,089 | $ 2,283,863 |
| Total Current Liabilities | $ 2,080,925 | $ 2,405,314 |
| Working Capital | $ 459,164 | ($ 121,451) |
Excluding deferred revenue, a significant non-cash item included in working capital, the Company’s working capital at December 31, 2025 is positive $2,381,953 (Dec 31, 2024 - $2,157,879).
Cash Flow From Operations
During the year ended December 31, 2025 the Company realized a cash outflow from operations of $158,553, a decrease of $1,052,356 from the $893,823 cash inflow from operations in the year ended December 31, 2024. The decreased cash outflow used for operations is primarily attributable to decreased net profit, decrease in short-term deferred revenue balance which represents year-over-year increase in cash received in advance of project delivery. These changes were partially offset by increases in both trade and other receivables balances and contract assets.
Financing Activities
During the year ended December 31, 2025 the Company had $75,500 cash inflow from financing activities compared to no cash inflow from financing activities for the year ended December 31, 2024.
The Company received proceeds of $15,500 from the exercise of employee share options and $60,000 from the exercise of warrants during the year ended December 31, 2025.
Investing Activities
During the year ended December 31, 2025 the Company purchased capital assets of $17,890, an increase of $6,189 compared to purchases of $11,701 during the same period ending December 31, 2024. The Company estimates it will have capital expenditures of approximately $25,000 during 2026, with any requirement for expenditures dependent upon customer requirements and revenue generation as well as personnel staffing and software development needs. Without additional financing or increased revenues, the Company may defer or limit its purchase of capital assets.
In 2025 the Company received $9,000 (2024 - $9,000) associated with loan repayments.
Outstanding Shares
At December 31, 2025, there were 40,867,968 common shares outstanding. In addition, 3,189,667 stock options were outstanding at December 31, 2025. All unexercised warrants expired on October 20, 2025.
Related-Party Transactions
The Company has an unsecured non-interest-bearing loan agreement totaling $75,000 with a director and officer of the Company. The initial terms of the loan were 24 equal payments of $3,125 beginning on October 12, 2022.
In 2023 the loan agreement was amended. The loan was re-measured at fair value using an effective interest rate of 8.5% per annum. The principal balance of the loan is $60,750. A total of $13,161 (2024 - $14,139) is included in prepaid expenses representing the employee benefit portion of the loan amount. The new terms of the amended unsecured loan agreement are 105 equal monthly payments of $750 beginning on December 1, 2023.
Income tax expense
As at December 31, 2025, no recognition for the benefit of unutilized tax losses or unutilized research and development expenses carryforward for tax purposes has been recognized in the financial statements.
Subsequent events
During the month of April, 2025 employees and officers exercised 36,666 options for proceeds of $5,500.
During the month of February 2026. 30,000 options were awarded to employees. During the month of March 2026 150,000 options were awarded to a director of the Company.
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Summary of Quarterly Results
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | $1,732,794 | $2,002,749 | $2,164,834 | $1,847,981 | $1,732,703 | $1,894,911 | $1,835,791 | $1,479,390 |
| Net income (loss) | ($94,551) | $20,241 | $25,737 | $67,092 | $135,688 | $110,364 | $13,059 | ($125,753) |
| Income (loss) per share (Basic and diluted) | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | ($0.00) |
The table above is a summary of the last 8 quarters of results up to December 31, 2025.
The product mix of the Company is diverse and different revenue recognition criteria exist for each product. Recurring revenues, including hosting and licensing, are relatively consistent in nature and consistent quarter to quarter. However, the timing of revenue recognition due to implementation services has an impact on the variability of revenues each quarter. The product has to be completed, delivered to and accepted by the client prior to recognition of the revenues. If an anticipated delivery is delayed, this may have a material impact on the revenues recorded for the quarter.
Use of Estimates and Judgements
The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Information about critical estimates that have the most significant effect on the amounts recognized in the financial statements is included in Note 4: Determination of fair values.
Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the December 31, 2024 Financial Statements Note 3: Significant accounting policies. Determination of the separately identifiable performance obligations and the relative fair value and revenue recognition timing of the performance obligations is subject to critical judgements. Critical judgements are required to assess whether or not a deferred tax asset should be recognized for temporary tax differences.
Future changes to accounting standards:
Recent accounting pronouncements.
IFRS 18 Presentation and Disclosure in Financial Statements, new structure and disclosure requirements:
In April 2024, the International Accounting Standards Board issued IFRS 18, Presentation and Disclosure in Financial Statements, which establishes the overall requirements for financial statement presentation and disclosure. The standard introduces structured subtotals in the statement of profit or loss, including a standardized 'operating profit' measure to enhance comparability. IFRS 18 replaces IAS 1, Presentation of Financial Statements, though much of IAS 1's substance remains. The new standard is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted. Management is currently assessing its impact and does not expect a material effect on the financial statements.
In May 2024, the International Accounting Standards Board issued Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7). The narrow-scope amendments are to address diversity in accounting practice in respect of: the classification of financial assets with environmental, social and corporate governance and similar features; and to clarify the date on which a financial asset or financial liability
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is to be de-recognized when using electronic payment systems. The new standard is effective for annual reporting periods beginning on or after January 1, 2026, with earlier adoption permitted. We are currently assessing the impacts of the new standard but do not expect to be materially affected by the application of the amendments.
Financial Instruments
Financial instruments are measured at fair value on initial recognition, which is typically the transaction price unless a significant financing component is present. Subsequent measurement is dependent on whether the instrument is classified as “amortized cost”, “fair value through profit or loss” or “fair value through other comprehensive income”. The classification of financial assets is determined by their characteristics and their context in the Company's business model.
The Company classifies financial assets and liabilities as follows:
Amortized cost: Cash and cash equivalents, trade and other receivables, loans receivable, trade and other payables, lease liabilities and shareholder loan are held by the Company to collect or pay contractual cash flows and are measured at amortized cost. Financial instruments measured at amortized cost are recognized initially at fair value adjusted for any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortized cost using the effective interest rate method, less any impairment losses.
Fair value through profit or loss: The Company has no financial instruments held to both collect contractual cash flows and to sell the asset, and accordingly, no financial instruments are measured at fair value through profit or loss.
Fair value through other comprehensive income: The Company has no financial instruments that do not meet the criteria to be measured at amortized cost or fair value through profit or loss and, accordingly, no financial instruments are measured at fair value through other comprehensive income.
The Company derecognizes a financial asset when the contractual right to the cash flow expires, or the right to receive the contractual cash flows from the financial asset and substantially all the risks and rewards of ownership of the financial asset are transferred. The Company derecognizes a financial liability when the contractual obligations are discharged, cancelled, or expired.
Risks and Uncertainties
The Company is subject to each of, and the cumulative effect of all, the risk factors outlined below.
Not Receiving An Adequate Or Any Return On Invested Capital
The exact effect of these risk factors cannot be accurately predicted, but they may result in the Company not receiving an adequate or any return on invested capital.
Recoup The Investment Or Pay Dividends
There is no assurance that the Company will produce sufficient revenues to allow the Company to recoup the investment or pay dividends to the investors. The Company has never paid any dividends on its securities and does not anticipate the payment of dividends in the foreseeable future. Any decisions regarding the payment of dividends will depend on the Company’s earnings, financial position and such other factors, as the Board of Directors of the Company deems relevant.
RenoWorks Is Not Fully Insured
RenoWorks’ operations are subject to the risks normally incident to the high technology, Internet and computer industries. In accordance with customary industry practice, RenoWorks is not, and it is not anticipated that the Company will be, fully insured against all of these risks, nor are all such risks fully insurable.
Marketability And Price
The marketability and price of the Company's products and services will be affected by numerous factors beyond the control of the Company.
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Competition
RenoWorks is subject to competition from companies with different products, greater financial resources, and larger marketing capabilities. There can be no assurance that the Company will be able to continue to compete successfully with existing competitors or will be able to compete successfully with new competition. The digital visualization software imaging industry is currently in its infancy and there are very few independent participants. The industry is characterized by rapid technological change. Many of the companies, both domestic and foreign, with which the Company competes are well established, substantially larger and have substantially greater resources than will be available to the Company. Although management of RenoWorks believes that it will compete successfully, there can be no assurance that the Company will be able to maintain a high level of name recognition and prestige within the marketplace. Moreover, the Company's success will depend on maintaining strong promotion, increasing visibility within the construction and renovation industry and on the Internet, and providing informative content. Management of RenoWorks believes that sales and marketing are key to the Company's success. The lack of availability of talented, creative sales and marketing personnel or the Company's inability to attract and retain such key employees could adversely affect the business of the Company.
Fluctuations In Monetary Exchange
Fluctuations in the United States and Canadian monetary exchange rates could negatively affect the Company's profits.
No Assurances That The Company Will Become Profitable or Maintain Profitability
RenoWorks has been primarily engaged in research and development activities for market penetration in the past and has historically incurred losses. There can be no assurances that the Company will achieve profitability.
Uncertain Cash Flow to Meet Obligations
Whether and when the Corporation can generate sufficient operating cash flows to pay for its expenditures and settle its obligations due after June 30, 2025 as obligations fall due subsequent to June 30, 2025 is uncertain. Until this time, management will have to raise funds by way of debt or equity issuances or improve profitability.
Industry Subject To Technological Advancement And Obsolescence
RenoWorks is operating within an industry subject to a very rapid pace of technological advancement and obsolescence. The ability of the Company to establish and maintain a position at the leading edge of technological innovation in the industry cannot be assured. Failure to do so may compromise the attainment of the Company's commercial objectives.
Limited Professional Liability Insurance
RenoWorks has limited commercial general liability insurance. There is no assurance that such insurance will be sufficient to protect itself against claims connected with the provision of its services or that the Company will continue to carry this insurance.
Reliance Upon Third-Party Agents
To the extent that the Company also relies upon third-party agents to sell its services on the Company's behalf, the Company will be subject to risks associated with the performance of these third parties, in addition to their security arrangement, insurance, reputations, and professionalism in the provision of services.
Dependence Upon, and Need for, Key Personnel
RenoWorks is, and will be, dependent upon the performance and a limited number of key personnel. The loss of a key individual or a reduction in the time devoted by such person to the Company's business could have a material adverse effect on the Company's business. The Company's future success will depend in part upon its ability to attract and retain highly qualified personnel. The Company faces competition for such personnel from other companies, academic institutions and other organizations, many of which have significantly greater resources that the Company. There can be no assurance that the Company will be able to attract and retain the necessary personnel on acceptable terms or at all.
Management of Expanding Operations
The Company's ability to manage any future expansion effectively will require it to attract, train, motivate, and manage new employees successfully, to integrate new management and employees into its overall operations and to continue to improve its operational, financial and management systems. The Company's failure to manage any expansion
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effectively, including any failure to integrate management and employees or failure to implement and improve financial, operational and management controls, systems and procedures could have a material adverse effect on the Company's business, operating results and financial condition. For the Company to expand its business operations, it must continue to improve and expand the expertise of its personnel and must attract, train, and manage qualified managers and employees to oversee and manage its contemplated expanded operations. As the Company realizes revenue growth, it is the intention of the Company to significantly expand its existing business operations. Current management of RenoWorks anticipates that significant expansion of its operations will continue to be required in order to address potential market opportunities. Such expansion will subject the Company to a variety of risks associated with rapidly growing companies. In particular, the Company's growth may place a significant strain on its accounting systems, internal controls, and oversight of its day-to-day operations. To manage its growth, the Company must implement, improve, and effectively utilize its operational, management, marketing and financial systems and train and manage its future employees. These individuals will not have previously worked together and would be required to integrate as a management team. There can be no assurance that the Company will be able to manage effectively the expansion of its operations or that RenoWorks' current personnel, systems, procedures and controls will be adequate to support the Company's operations. Any failure of management to manage effectively the Company's growth could have a material adverse effect on the Company's business, results of operations, and financial condition. Although management of RenoWorks intends to ensure that its internal controls remain adequate to meet the demands of further growth, there can be no assurance that its systems, controls, or personnel will be sufficient to meet these demands. Inadequacies in these areas could have a material adverse effect on the Company's business, financial condition, and results of operations.
Fluctuations in Operating Results
The Company may experience significant fluctuations in operating results. These fluctuations may be caused by several factors, many of which are beyond the control of the Company. These include: the cost of acquiring and the availability of content; the overall level of demand for content and product implementation services; seasonal trends and advertising placements; the amount of increased expenditures for expansion of operations, including the hiring of new employees, capital expenditures and related costs; the Company's ability to continue to enhance, maintain and support its technology; the introduction of new or enhanced services by the Company; price competition or pricing changes in products and services such as the Company's technical difficulties, system downtime, system failures; political or economic events and governmental actions affecting operations; and general economic conditions and economic conditions specific to the industry. If one or more of these factors or other factors occur, the Company's business could suffer. In addition, the market for services such as those which RenoWorks provides is volatile making it very difficult to predict future financial results.
Cyclicality in the Construction and Renovation Industries
The residential construction and renovation industries are cyclical. The industry tends to be sensitive to economic conditions. When economic conditions are prosperous, construction and renovation industry revenues increase; conversely, when economic conditions are unfavorable, construction and renovation industry revenues decline. The Company will continuously monitor trends in its clients' tastes and preferences so that, if necessary, it can change operations and services to accommodate the changes in such trends. Any significant decline in general corporate conditions or the economy that affect consumer spending could have a material adverse effect on the Company's business.
Subscription licensing revenues of RenoWorks are anticipated to be cyclical and dependent upon general economic conditions. However, management of RenoWorks believes that RenoWorks' pricing strategies, distribution, production cost structure, marketing strategy, and management's experience mitigate, to some degree, the effects of an economic downturn to the extent such downturn is regional.
Dependence on the Adoption of Computers in the Construction Industry
The Company's future success is substantially dependent upon continued growth in the adoption of computers in the construction industry and, as it relates to the Company, in the acceptance of digital visualization software usage. There can be no assurance that the number of computers used in the construction industry will continue to grow or that adoption of digital visualization software will occur. The construction industry may not prove to be a viable commercial marketplace for a number of reasons, including lack of computer use and ease of software use.
Risk Of Technological Change
The market for computer and software usage is characterized by rapid technological developments, frequent new product introductions, increased development of artificial intelligence techniques, and evolving industry standards. The emerging character of these products and services and their rapid evolution will require the Company to effectively use leading technologies, continue to develop its technological expertise, enhance its current services including
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artificial intelligence, and continue to improve the performance, features and reliability of its visualization software and Internet destination (www.renoworks.com). Changes in network infrastructure, transmission and content delivery methods and underlying software platforms and the emergence of new artificial intelligence and broadband technologies, could dramatically change the structure and competitive dynamic of the market. In particular, technological developments or strategic partnerships that accelerate the adoption of broadband access technologies may require the Company to expend resources to address these developments. There can be no assurance that the Company will be successful in responding quickly, cost-effectively, and sufficiently to these or other such developments. A failure by the Company to rapidly respond to technological developments could have a material adverse effect on the Company's business, results of operations and financial condition.
Intellectual Property Risks
RenoWorks regards its copyright, trademarks, and similar intellectual property as critical to its success. In that context, the Company relies on a combination of copyright and trademark laws, trade secret protection, confidentiality and non-disclosure agreements and contractual provisions. There is no guarantee that these efforts will be adequate; that the Company will be able to secure trademark registrations for all of its trademarks in the United States or other countries; or that third parties will not infringe upon or misappropriate the Company's copyrights, trademarks, service marks and similar proprietary rights. In addition, effective copyright and trademark protection may be unenforceable or limited in certain countries, and the global nature of the Internet makes it impossible to control the ultimate destination of the Company's website. Since trademark and copyright protections are not "self-enforcing", future litigation may be necessary to enforce and protect the Company's trademarks, copyrights and other intellectual property rights.
The Company may also be subject to litigation to defend against claims of infringement of the rights of others or to determine the scope and validity of the intellectual property rights of others. If competitors of the Company prepare and file applications in the United States or Canada that claim trademarks used or registered by the Company are infringing on their rights, the Company may oppose those applications and be required to participate in the proceedings before the United States Patent and Trademark Office or Canadian Intellectual Property Office to determine the priority and scope of rights to the trademark, which could result in substantial costs to the Company. An adverse outcome could require the Company to license disputed rights from third parties or to cease using such trademark. Any litigation regarding the Company's proprietary rights could be costly and divert management's attention, result in the loss of certain of the Company's proprietary rights, require the Company to seek licenses from third parties and prevent the Company from selling its services, any one of which could have a material adverse effect on the Company's business, results of operations, and financial condition.
The Company pursues the registration of trademarks based upon anticipated use internationally. There can be no assurance that the Company will be able to secure adequate protection for these trademarks in foreign countries. Many countries have a "first-to-file" trademark registration system and thus the Company may be prevented from registering its marks in certain countries if third parties have previously filed applications to register or have registered the same or similar marks. It is possible that competitors of the Company or others will adopt service names similar to the Company's, thereby impeding the Company's ability to build brand identity and possibly leading to customer confusion. In addition, there could be potential trademark or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of the Company's trademarks. The inability of the Company to protect its marks adequately could have a material adverse effect on the Company's business, results of operations and financial condition.
Cloud Hosting and Infrastructure Risks
Our SaaS platform depends heavily on third-party cloud hosting providers to deliver reliable, secure, and scalable services to our customers. Any disruption, degradation, or change in the performance of these providers could materially affect our business, financial condition, and operating results. Our reliance on cloud infrastructure exposes us to several risks, including, but not limited to, service interruptions and downtime, security vulnerabilities and breaches, cost increases and pricing changes, vendor concentration and limited alternatives, scalability and performance constraints, regulatory and compliance risks associated with the provider that impact our operations, and systemic failures the provider experiences that impact our business continuity.
April 21, 2026