Visionstate Corp. — Audit Report / Information 2025

Jan 21, 2026

VISIONSTATE CORP.
Consolidated Financial Statements
Years Ended September 30, 2025 and 2024
(Expressed in Canadian Dollars)

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Index to Consolidated Financial Statements

VISIONSTATE CORP.

Years Ended September 30, 2025 and 2024

page number	3	Report of Management
	4-5	Independent Auditors' Report
	6	Consolidated Balance Sheets
	7	Consolidated Statements of Net Loss and Comprehensive Loss
	8	Consolidated Statements of Changes in Equity
	9	Consolidated Statements of Cash Flows
	10-30	Notes to the Consolidated Financial Statements

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3

Report of Management

January 21, 2026

To the Shareholders of Visionstate Corp.

We are responsible for the preparation and fair presentation of the Consolidated Financial Statements, as well as the financial reporting process that gives rise to such Consolidated Financial Statements. This responsibility requires us to make significant accounting judgments and estimates. For example, we are required to choose accounting principles and methods that are appropriate to the Company's circumstances, and we are required to make estimates and assumptions that affect amounts reported. Fulfilling this responsibility requires the preparation and presentation of our Consolidated Financial Statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).

We are responsible for developing and implementing internal controls over the financial reporting process. These controls are designed to provide reasonable assurance that relevant and reliable financial information is produced. To gather and control financial data, we have established accounting and reporting systems supported by internal controls over financial reporting. We believe that our internal controls over financial reporting provide reasonable assurance that our assets are safeguarded against loss from unauthorized use or disposition, that receipts and expenditures of the company are made only in accordance with authorization of management and directors of the company and that our records are reliable for preparing our Consolidated Financial Statements and other financial information in accordance with applicable International Financial Reporting Standards and in accordance with applicable securities rules and regulations. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

We have established disclosure controls and procedures, internal controls over financial reporting and corporate-wide policies to ensure that the Company's consolidated financial position, results of operations and cash flows are presented fairly. Our disclosure controls and procedures are designed to ensure timely disclosure and communication of all material information required by regulators. We oversee, with assistance from the Audit Committee, these controls and procedures and all required regulatory disclosures.

Our Board of Directors is responsible for reviewing and approving the Consolidated Financial Statements and for overseeing management's performance of its financial reporting responsibilities. Their financial statement-related responsibilities are fulfilled mainly through the Audit Committee. The Audit Committee is responsible for the appointment and compensation of the independent registered Chartered Professional Accountants and also considers their independence, reviews their fees and (subject to applicable securities laws) pre-approves their retention for any permitted non-audit services and their fee for such services. The independent registered Chartered Professional Accountants have full and unlimited access to the Audit Committee, with and without the presence of management.

(signed) “John Putters”
Chief Executive Officer

(signed) “Randa Kachkar”
Chief Financial Officer

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KMSS

Kenway Mack Slusarchuk Stewart LLP Chartered Professional Accountants

Colebrotting 35 years

Independent Auditor's Report

To: The Shareholders of Visionstate Corp.

Opinion

We have audited the consolidated financial statements of Visionstate Corp. and its subsidiaries (collectively, the "Company"), which comprise the consolidated balance sheets as at September 30, 2025 and 2024 and the consolidated statements of net loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as at September 30, 2025 and 2024, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the consolidated financial statements which indicates that at September 30, 2025 the Company had a net loss of $1,077,568 and a negative cash flow from operations of $876,530. This condition, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not qualified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and not otherwise addressed in our report. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Material Uncertainty Related to Going Concern section of our report, we have determined that there are no key audit matters to be communicated in our auditors' report.

Information Other than the Consolidated Financial Statements and Auditor's Report Thereon

Management is responsible for the other information. The other information comprises the information included in Management's Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged With Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

150 13 Avenue SW, Suite 300 Calgary AB T2R 0V2 Tel: 403.233.7750 Fax: 403.266.5267

714 10 Street, Suite 3 Canmore AB T1W 2A6 Tel: 403.675.1010 Fax: 403.675.6789

www.kmss.ca

An independent member of

DFK

International

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Independent Auditors' Report (continued)

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore key audit matters.

We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Scott Reinarz, CPA, CA.

Kennedy Mack Susarchuk Stewart

January 21, 2026

Calgary, Alberta

Chartered Professional Accountants

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Consolidated Balance Sheets

VISIONSTATE CORP.

ASSETS		September 30, 2025 $	September 30, 2024 $
	CURRENT ASSETS
	Cash	75,818	456,480
	Accounts receivable	12,699	13,728
	Prepaid expenses	25,367	87,505
	Subscription receivable	-	175,000
	TOTAL CURRENT ASSETS	113,884	732,713
	DEPOSITS (Note 6)	53,282	53,282
	RIGHT OF USE ASSET (Note 9)	24,047	40,078
	TOTAL ASSETS	191,213	826,073
LIABILITIES	CURRENT LIABILITIES
	Accounts payable and accrued liabilities (Note 7)	287,643	296,928
	Promissory notes payable (Note 8)	25,431	23,992
	Convertible debentures (Note 10)	100,000	100,000
	Deferred revenue (Note 17)	62,122	49,443
	Current portion of lease obligation (Note 9)	19,193	17,125
	TOTAL CURRENT LIABILITIES	494,389	487,488
	LEASE OBLIGATION (Note 9)	10,449	29,642
	TOTAL LIABILITIES	504,838	517,130
SHAREHOLDERS' EQUITY (DEFICIENCY)	SHARE CAPITAL (Note 11)	12,172,561	11,933,087
	WARRANT RESERVE (Note 11)	1,260,867	1,146,495
	CONTRIBUTED SURPLUS	3,934,565	3,833,411
	DEFICIT	(17,681,618)	(16,604,050)
	TOTAL SHAREHOLDERS' (DEFICIENCY) EQUITY	(313,625)	308,943
	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	191,213	826,073

Going Concern (Note 1)

APPROVED BY THE BOARD

John Putters Director

James Duke Director

See accompanying notes to the consolidated financial statements

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Consolidated Statements of Net Loss and Comprehensive Loss

VISIONSTATE CORP.

Years Ended September 30, 2025 and 2024

	2025 $	2024 $
REVENUE
Development contracts	282,156	281,852
Technical support and service contracts	117,214	112,486
Product sales	33,711	98,038
TOTAL REVENUE	433,081	492,376
EXPENSES
Selling, general and administrative expenses	580,503	672,572
Salaries	566,978	510,533
Direct expenses	242,130	137,240
Finance costs	22,507	32,847
Depreciation of right of use asset (Note 9)	16,031	16,031
TOTAL EXPENSES	1,428,149	1,369,222
LOSS FROM OPERATIONS	(995,068)	(876,846)
OTHER INCOME AND EXPENSE
Forgivable portion of CEBA Loan	-	20,000
Interest and other	-	1,154
Loss on loans receivable (Note 5)	(82,500)	(85,000)
TOTAL OTHER INCOME AND EXPENSE	(82,500)	(63,846)
LOSS BEFORE INCOME TAXES	(1,077,568)	(940,692)
INCOME TAXES RECOVERY (Note 12)	-	(7,533)
NET LOSS AND COMPREHENSIVE LOSS	(1,077,568)	(933,159)
BASIC & DILUTED NET LOSS PER COMMON SHARE (Note 13)	(0.004)	(0.005)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES	249,899,486	187,423,280

See accompanying notes to the consolidated financial statements

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Consolidated Statements of Changes in Equity

VISIONSTATE CORP.

Years Ended September 30, 2025 and 2024

	Shares		Warrant Reserve		Contributed
	Number	Amount	Number	Amount	Total	Surplus	Deficit	Total
Balance, October 1, 2024	240,126,335	$ 11,933,087	129,820,000	$ 1,146,495	$ 13,079,582	$ 3,833,411	$(16,604,050)	$ 308,943
Private placement (March, 2025)	18,200,000	239,474	18,200,000	215,526	455,000	-	-	455,000
Warrants expired	-	-	(12,845,000)	(101,154)	(101,154)	101,154	-	-
Net loss	-	-	-	-	-	-	(1,077,568)	(1,077,568)
Balance, September 30, 2025	258,326,335	$ 12,172,561	135,175,000	$ 1,260,867	$ 13,433,428	$ 3,934,565	$(17,681,618)	$ (313,625)
	Shares		Warrant Reserve		Contributed
---	---	---	---	---	---	---	---	---
	Number	Amount	Number	Amount	Total	Surplus	Deficit	Total
Balance, October 1, 2023	171,126,335	$ 11,104,725	109,283,734	$ 1,644,937	$ 12,749,662	$ 2,666,581	$(15,670,891)	$ (254,648)
Private placement (February, 2024)	20,000,000	238,095	20,000,000	161,905	400,000	-	-	400,000
Private placement (June, 2024)	9,515,000	114,180	9,515,000	76,120	190,300	-	-	190,300
Private placement (August, 2024)	15,485,000	175,966	15,485,000	133,734	309,700	-	-	309,700
Private placement (September, 2024)	24,000,000	303,371	24,000,000	296,629	600,000	-	-	600,000
Warrants expired	-	-	(48,463,734)	(1,166,830)	(1,166,830)	1,166,830	-	-
Share issuance costs	-	(3,250)	-	-	-	-	-	(3,250)
Net loss	-	-	-	-	-	-	(933,159)	(933,159)
Balance, September 30, 2024	240,126,335	$ 11,933,087	129,820,000	$ 1,146,495	$ 13,079,582	$ 3,833,411	$(16,604,050)	$ 308,943

See accompanying notes to the consolidated financial statements

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Consolidated Statements of Cash Flows

VISIONSTATE CORP.

Years Ended September 30, 2025 and 2024

| | 2025
$ | 2024
$ |
| --- | --- | --- |
| CASH FLOWS FROM OPERATING ACTIVITIES | | |
| Net loss for the year | (1,077,568) | (933,159) |
| Items not affecting cash | | |
| Depreciation of right of use asset (Note 9) | 16,031 | 16,031 |
| Loss on loans receivable | 82,500 | 85,000 |
| Finance costs | 22,507 | 32,847 |
| Forgiven portion of CEBA loan | - | (20,000) |
| Expenses settled with shares (Note 11) | 80,000 | 134,700 |
| Net cash flows from operating activities before net change in non-cash working capital items | (876,530) | (684,581) |
| Changes in non-cash working capital items | | |
| Accounts receivable | 1,029 | 39 |
| Prepaid expenses | 62,138 | 64,196 |
| Accounts payable and accrued liabilities | (9,284) | (88,772) |
| Deferred revenue | 12,679 | 37,457 |
| Net cash flows used in operating activities | (809,968) | (671,661) |
| CASH FLOWS FROM INVESTING ACTIVITIES | | |
| Loans advanced | (82,500) | (85,000) |
| Loan repayment | - | 22,000 |
| Net cash flows used in investing activities | (82,500) | (63,000) |
| CASH FLOWS FROM FINANCING ACTIVITIES | | |
| Interest paid | (16,594) | (24,074) |
| Repayments on lease obligation (Note 9) | (21,600) | (21,600) |
| Private placement | 375,000 | 1,362,050 |
| Subscription receivable | 175,000 | (175,000) |
| Repayment of CEBA Loan | - | (40,000) |
| Net cash flows from financing activities | 511,806 | 1,101,376 |
| Decrease in cash | (380,662) | 366,715 |
| Cash at beginning of year | 456,480 | 89,765 |
| Cash at end of year | 75,818 | 456,480 |

See accompanying notes to the consolidated financial statements

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 1

Going Concern

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) that are applicable to a going concern which contemplates the realization of assets and settlement of liabilities in the normal course of operations. There are material uncertainties that may cast significant doubt on the validity of this assumption. For the year ended September 30, 2025, the Company incurred a net loss of $1,077,568 and a negative cash flow from operations of $809,968. Visionstate Corp. (the "Company" or "Visionstate") has been unable to generate a profit from operations up to September 30, 2025. The Company's current credit facilities are not sufficient to fund working capital, convertible debenture repayment including arrears interest, and other cash requirements for future years. The Company's ability to continue as a going concern is dependent on accessing additional funding and achieving profitable operations.

These consolidated financial statements do not reflect adjustments in the carrying value of the assets and liabilities, the reported revenues and expenses and the consolidated balance sheet classifications that would be necessary if the going concern assumption were not appropriate. Such adjustments could be material.

Note 2

General

The Company was incorporated under the Alberta Business Corporations Act and is traded on the TSX Venture Exchange ("TSX-V") under the symbol VIS-V. The head office and principal address are located at 8634 - 53 Avenue, Edmonton, Alberta, Canada, T6E 5G2.

The Company provides interactive electronic business solutions in the form of touchscreen and mobile way finding and efficiency applications, as well as consulting, graphic and web design and related services and support.

The main focus of the Company is its Visionstate IoT Inc. division. This division is focused on building interactive smart applications into digital display networks that incorporate proprietary facility management software, bundled into a touchscreen computer with integrated computing capacity (WAnDA units) and digital efficiency products. Visionstate is actively marketing these products to large customers such as shopping centres, hospitals, office buildings, airports, schools and other places that require efficiency applications, in several different target areas.

These consolidated financial statements were approved by the Board of Directors on January 21, 2026.

Note 3

Basis of Presentation

Statement of Compliance

These consolidated financial statements have been prepared in accordance and compliance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB").

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 3

Basis of Presentation
Continued...

Basis of Measurement

The consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments at fair value as described in the accounting policies noted below.

Functional Currency

The consolidated financial statements are presented in Canadian dollars, which is the Company's and its subsidiaries' functional currency.

Use of Estimates and Judgements

The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The estimates and judgments that are critical to the determination of the amounts reported in the consolidated financial statements relate to the following:

Loans receivable

The loans receivable are assessed for impairment using available information on current financial conditions and results of the companies.

Income taxes

The amounts recorded for deferred income taxes are based on estimates as to the timing of the reversal of temporary differences and tax rates currently substantively enacted. They are also based on estimates of the probability of the Company utilizing certain assets. To the extent assumptions regarding future probability change, there can be a change in the amounts recognized in respect of deferred tax assets as well as the amounts recognized in profit or loss in the period in which the change occurs.

Financial Instruments

The Company estimates and discloses the fair value of financial instruments. When fair value cannot be derived from an active market, it is determined using valuation techniques, namely the discounted cash flow method. If possible, data is derived from observable markets and, if not, judgment is required to determine fair value.

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 3

Basis of Presentation
Continued...

Lease Obligation

The incremental borrowing rate is based on estimates made by management taking into consideration economic environment, terms, and underlying risk inherent to the asset. The carrying balance of the right of use asset, lease obligation and interest expense may vary due to changes in market conditions. Judgments are required to determine if a contract is, or contains, a lease. These judgements require an assessment of whether the contract conveys the right to control the use of identified asset for a period of time in exchange for consideration. Determining the term of a lease contract used to discount lease payments, requires significant estimates by management to determine the likelihood of renewal, cancellation, or termination of lease agreement upon inception of the lease.

Right of use assets

Right of use assets are amortized over the term of the lease or the estimated useful life of the assets. Changes in the estimated useful lives could significantly increase or decrease the amount of amortization recorded during the year. When there are indicators that right of use assets may be impaired, the Company is required to access the asset's recoverable amount. Recoverable amount is the greater of value in use and fair value less costs of disposal. Determining the value in use requires the Company to estimate expected future cash flows associated with the assets and a suitable discount rate in order to calculate present value.

Warrant Reserve

The amounts recorded for the warrant-reserve is based on assumptions used in the Black-Scholes option pricing model. The assumptions for future volatility, market price of the Company's shares, expected lives of the options, expected forfeiture rates, and expected dividends is based on management's best estimate at the time the options are issued.

Going Concern

The assessment of the Company's ability to continue as a going concern through achieving profitable operations, continued financial support from related parties or accessing additional funding involves judgment based on historical experience and expectation of future events.

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries Visionstate IoT Inc., and Next Vision AI Inc. (formerly Next Vision IoT Inc.) All intercompany balances and transactions have been eliminated on consolidation.

Impairment of Non-Financial Assets

The carrying value of non-financial assets are reviewed when events or changes in circumstances suggest their carrying value may not be recoverable and at each reporting period. Management considers assets to be impaired if the carrying value exceeds the estimated recoverable amount. If the recoverable amount cannot be estimated for an asset, the recoverable amount of the cash generating unit to which the asset belongs is determined. A cash generating unit is the smallest identifiable group of assets which generate cash inflows which is largely independent of cash inflows generated from other assets or group of assets. The recoverable amount is the greater of the asset's or cash generating unit's value in use or its fair value less cost of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money. If impairment is determined to exist, the loss is measured based on the amounts by which the assets carrying values exceed their fair values. Impairment losses are recognized in the statement of loss and comprehensive loss. Impairment losses recognized in prior years are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.

Equity Instruments

Equity instruments issued by the Company are recorded at the proceeds received net of direct issuance costs. If an equity instrument is comprised of a common share and a warrant, the gross proceeds are allocated between the common share and warrant on a relative fair value basis where the value of the warrants is estimated using a Black-Scholes valuation model.

Right of Use Asset and Lease Obligation

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. For the leases of property, the Company has elected to separate non-lease components.

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 4

Material Accounting Policy Information Continued...

Right of Use Asset and Lease Obligation, continued

The Company recognizes a right of use asset and a lease obligation at the lease commencement date. The right of use asset is initially measured at cost, which comprises the initial amount of the lease obligation adjusted for any lease payments made at or before the commencement date, less any lease incentives received.

The right of use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of asset leased.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right of use asset, or is recorded in profit or loss if the carrying amount of the right of use asset has been reduced to zero.

Provisions

A provision is recognized in the consolidated balance sheet when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 4

Material Accounting Policy Information Continued...

Income Taxes

Income tax expense is comprised of current and deferred income taxes. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneous.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

The Company's financial instruments are measured initially at fair value and thereafter based on their classification. The classification depends on the purpose for which the financial instruments were acquired or issued, their characteristics, and the Company's designation of such instruments. At initial recognition financial instruments are classified in the following categories depending on the nature and purpose for which the instruments were acquired:

Financial Assets and Liabilities at Fair Value though Profit or Loss ("FVTPL")

Financial assets and financial liabilities purchased or incurred, respectively, with the intention of generating earnings in the near term are classified as FVTPL. For items classified as FVTPL, the Company initially recognizes such financial assets or liabilities on the consolidated balance sheet at fair value and recognizes subsequent changes in the consolidated statements of operations. Transaction costs incurred are expensed in the consolidated statements of operations. The Company does not currently hold any assets or liabilities designated as FVTPL.

15

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 4

Material Accounting Policy Information Continued...

Financial Assets at Fair Value through Other Comprehensive Income ("FVTOCI")

Equity investments that are held for trading are classified as FVTPL. For other equity investments, on the day of acquisition the Company can make an irrevocable election to designate them as FVTOCI. Elected investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses recognized in other comprehensive income (loss). The Company does not currently hold any assets or liabilities designated as FOCI.

Amortized Cost

The Company classifies financial assets held to collect contractual cash flows at amortized cost, including cash and accounts receivable. The Company initially recognizes the carrying amount of such assets on the consolidated balance sheet at fair value plus directly attributable transaction costs, and subsequently measures these at amortized cost using the effective interest rate method, less any impairment losses.

Other Financial Liabilities

This category is for financial liabilities that are not classified as FVTPL and includes accounts payables and accrued liabilities, promissory notes payable and convertible debentures. These financial liabilities are recorded at amortized cost on the consolidated balance sheet.

Impairment of Financial Assets

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company shall recognize in the consolidated statements of operations, as an impairment gain or loss, the amount of expected credit losses reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Derecognition

Financial Assets:

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in profit or loss. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).

16

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 4

Material Accounting Policy Information Continued...

Financial Liabilities:

The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets, is recognized in profit or loss.

Convertible Debentures

A convertible debenture is a compound financial instrument that can be converted to common shares at the option of the holder, and the number of shares to be issued does not vary with the changes in fair value. The liability component of a compound financial liability is recognized initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognized as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component.

Finance Costs

Finance costs are comprised of interest expense on borrowings, accretion expense on the convertible debentures and interest expense on the lease obligation.

Revenue Recognition

The Company generates revenue from product sales, development contracts, technical support and service contracts. Revenue is measured based on the consideration specified in a contract with a customer. Revenue is recognized as performance obligations are satisfied.

Product Sales

Product sales consist of contracts to provide customers with hardware products such as plasma and LCD touchscreens, CSA-approved housings with integrated computing capacity (ViCCi and WAnDA units) and digital efficiency products and software licenses to use the Company's Wanda software, a software for monitoring cleaning of facilities. The Company generally considers these types of contracts to contain a single performance obligation satisfied at a point in time. The following factors are considered in determining when to recognize revenue:

• whether the Company has a present right to payment
• whether the buyer has legal title to the asset, if physical possession of the asset has transferred to the buyer and whether the buyer has the significant risks and rewards of ownership
• whether the buyer has accepted the asset

Generally, the buyer obtains control at the time goods have been delivered.

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 4

Material Accounting Policy Information Continued...

Technical Support and Service Contracts

A technical support and service contract includes software licensing and maintenance services. The Company generally considers these types of contracts to contain two separate performance obligations which are satisfied over time. Each performance obligation is treated separately for revenue recognition purposes with the total transaction price allocated to each obligation based on the standalone selling price of each performance obligation and recognized as revenue over the term of the contract.

Development Contracts

A development contract includes customizations or modifications to existing Visionstate product. The Company generally considers these types of contracts to contain a single performance obligation which is satisfied over time. Development revenue is recognized by measuring the progress towards complete satisfaction of the performance obligation using costs incurred to date related to total estimated costs.

Net Loss Per Common Share

Basic net loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share amounts reflect the potential dilution that could occur if warrants and convertible debt were converted to common shares. Any proceeds from the conversion of warrants or convertible debt that are in the money are assumed to be used to purchase common shares of the Company at the average market price during the period. When the Company is in a net loss position, the conversion of warrants and debt is anti-dilutive.

Government Assistance

The Company receives grants from different government incentive programs. These grants are recognized initially when there is a reasonable assurance that they will be received and when the Company has intentions to comply with the conditions associated with the grants. The grant received for expenditures incurred are recognized on a systematic basis and in the same accounting period in which the expenditures are incurred.

New standards, interpretations and amendments adopted

The following IFRS standards have been recently issued by the IASB and the Company is currently evaluating the potential impacts on the consolidated financial statements of such pronouncements. Pronouncements that are not applicable or are not expected to have a significant impact on the Company's consolidated financial statements have been excluded.

IFRS 18 Presentation and disclosure in the financial statements (replacement of IAS 1)

This new standard maintains many of the current requirements for the presentation of financial statements and adds new requirements concerning the statement of profit or loss, management-defined performance measures, and the principles of aggregation and disaggregation of information.

18

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 4

Material Accounting Policy Information Continued...

Note 5

Loans Receivable

Note 6

Deposits

Note 7

Accounts Payable and Accrued Liabilities

New standards, interpretations and amendments adopted, continued

The new requirements concerning the statement of profit or loss include requiring entities to classify income and expenses included in the statement of profit or loss in one of five categories (operating, investing, financing, income taxes, discontinued operations), and prescribing that subtotals for operating profit or loss and profit or loss before financing and income taxes are presented. The new requirements concerning management-defined performance measures involve explanation of the purpose, calculation of and reconciliation to the most closely related performance measure prescribed in an IFRS accounting standard. Management-defined performance measures are defined as a subtotal of income and expenses used in public communications by entities outside of the financial statements that are not a measure specifically required to be presented or disclosed by an IFRS accounting standard. The amendment is effective for annual reporting periods beginning on or after January 1, 2027 and is to be applied retrospectively.

During fiscal 2025, the Company advanced a loan of $82,500 (2024 - $85,000) to an early development stage private company with a complementary product. The amount is non-interest bearing and has no specified term of repayment. An expected credit loss provision of $82,500 (2024 - $85,000) has been taken as at current year-end due to the early stage of the private company.

Amount includes a deposit of $50,750 (2024 - $50,750) paid for the development of a wireless sensor package for monitoring plant growth.

Accounts payable and accrued liabilities are comprised of the following items:

	September 30, 2025	September 30, 2024
Trade payables	$ 95,188	$ 31,353
Accrued liabilities	178,538	235,645
Accrued payroll remittances	12,772	11,635
Goods and Services Tax payable	1,145	18,295
	$ 287,643	$ 296,928

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 7

Accounts Payable and Accrued Liabilities Continued...

Included in trade payables are the following related party balances:

	September 30, 2025	September 30, 2024
Due to directors	$ 9,500	$ 14,500
Due to officers	4,720	6,745
Due to company owned by officer	-	2,042
	$ 14,220	$ 23,287

Note 8

Promissory Notes Payable

	September 30, 2025	September 30, 2024
Promissory note payable is unsecured, interest payable at 6% per annum, with full amount and accrued interest due on demand	$ 25,431	$ 23,992
	$ 25,431	$ 23,992

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 9

Lease Obligation and Right of Use Asset

The Company has a lease for its office premises until March 31, 2027. The associated lease obligation and right of use asset information is summarized below. There is no renewal option in the lease agreement and therefore it has been excluded from the calculation. The lease was renewed for a term of 5 years on January 12, 2022 for five years commencing April 1, 2022.

	September 30, 2025	September 30, 2024
Right of use Asset
Balance, beginning of year	$ 40,078	$ 56,109
Less: depreciation	(16,031)	(16,031)
	$ 24,047	$ 40,078
	September 30, 2025	September 30, 2024
Lease Obligation
Balance, beginning of year	$ 46,767	$ 62,048
Less: lease payments	(21,600)	(21,600)
finance expense	4,475	6,319
Total lease liability	29,642	46,767
Less: current portion	(19,193)	(17,125)
	$ 10,449	$ 29,642
Lease Commitments – undiscounted cash flow
2026	21,600
2027	10,800
Finance expense	(2,758)
	$ 29,642

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 10
Convertible Debentures

Balance, September 30, 2023, 2024 and 2025

Liability	Equity
$ 100,000	$ -

The Company issued convertible debentures in the amount of $100,000 on May 2, 2008 which expired on May 2, 2011. The Company is currently negotiating with the debenture holders to extend the terms on the convertible debentures. The convertible debentures bear interest at a rate of 8.0% per annum, payable quarterly in arrears and due on demand. The Company is in arrears on the interest payments relating to the debentures in the amount of $170,526 (September 30, 2024 - $161,633), which is reflected in accounts payable and accrued liabilities. As a result of being in arrears with the interest payments, the Company is obligated to pay interest on the interest in default.

Note 11
Share Capital

Authorized Share Capital:
Unlimited number of common, voting shares and unlimited number of preferred shares

Private Placements:
February, 2024

On February 21, 2024, the Company completed a private placement of 20,000,000 units ("Units") at a price of $0.02 per Unit, for gross proceeds of $400,000. Each Unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.05 per common share for a period of twenty-four months following the date of closing. The gross proceeds of $238,095 and $161,905 were allocated to the common shares and warrants, respectively. Warrants were valued as of February 21, 2024 using the Black-Scholes model using the following assumptions: expected dividend rate of 0%; expected volatility of 171%; risk free rate of 3.30%; and expected life of 2 years.

June, 2024

On June 28, 2024, the Company completed a private placement of 9,515,000 units ("Units") at a price of $0.02 per Unit, for gross proceeds of $190,300. Each Unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.05 per common share for a period of twenty-four months following the date of closing. The gross proceeds of $114,180 and $76,120 were allocated to the common shares and warrants, respectively. Warrants were valued as of June 28, 2024 using the Black-Scholes model using the following assumptions: expected dividend rate of 0%; expected volatility of 181%; risk free rate of 3.30%; and expected life of 2 years.

22

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 11
Share Capital
Continued...

August, 2024

On August 26, 2024, the Company completed a private placement of 15,485,000 units ("Units") at a price of $0.02 per Unit, for gross proceeds of $309,700. Each Unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.05 per common share for a period of twenty-four months following the date of closing. The gross proceeds of $175,966 and $133,734 were allocated to the common shares and warrants, respectively. Warrants were valued as of August 26, 2024 using the Black-Scholes model using the following assumptions: expected dividend rate of 0%; expected volatility of 184%; risk free rate of 3.30%; and expected life of 2 years.

September, 2024

On September 27, 2024, the Company completed a private placement of 24,000,000 units ("Units") at a price of $0.025 per Unit, for gross proceeds of $600,000. Each Unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.05 per common share for a period of sixty months following the date of closing. The gross proceeds of $303,371 and $296,629 were allocated to the common shares and warrants, respectively. Warrants were valued as of September 27, 2024 using the Black-Scholes model using the following assumptions: expected dividend rate of 0%; expected volatility of 195%; risk free rate of 3.30%; and expected life of 5 years.

March, 2025

On March 18, 2025, the Company completed a private placement of 18,200,000 units ("Units") at a price of $0.025 per Unit, for gross proceeds of $455,000. Each Unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.05 per common share for a period of sixty months following the date of the closing. The gross proceeds of $239,474 and $215,526 were allocated to the common shares and warrants, respectively. Warrants were valued as of March 18, 2025 using the Black-Scholes model using the following assumptions: expected dividend rate of 0%; expected volatility of 164%; risk free rate of 2.80%; and expected life of 5 years.

During 2025, there were director and officer stipends of $60,000 (2024 - $85,700) and other expenses of $20,000 (2024 - $49,000) settled with shares.

Stock options outstanding and stock-based compensation:

The Company has no stock option plan presently.

Warrants

On December 11, 2024, 10,045,000 warrants exercisable at a price of $0.05 expired. As a result, their value was adjusted to contributed surplus.

On March 4, 2025, 2,800,000 warrants exercisable at a price of $0.05 expired. As a result, their value was adjusted to contributed surplus.

23

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 11
Share Capital
Continued...

Warrant Exercises

During fiscal 2025 and 2024, no warrants have been exercised.

Warrants outstanding:

A summary of the warrants outstanding as at September 30, 2025 and September 30, 2024 is presented below:

	September 30, 2025		September 30, 2024
	Warrants	Weighted Average Exercise price	Warrants	Weighted Average Exercise price
Warrants outstanding, beginning of year	129,820,000	$ 0.05	109,283,734	$ 0.06
Issued	18,200,000	0.05	69,000,000	0.05
Expired	(12,845,000)	0.05	(48,463,734)	0.07
Total Warrants	135,175,000	$ 0.05	129,820,000	$ 0.05

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 12

Income Taxes

The Company has accumulated non-capital losses carried forward for income tax purposes of $11,350,721 benefit of which has not been reflected in these consolidated financial statements. These losses may be applied against future taxable income within the limitations prescribed by the Income Tax Act and expire as follows:

2026	$ 573,408
2027	542,878
2028	369,743
2029	200,827
2030	250,733
2031	332,532
2032	358,142
2033	236,235
2034	530,162
2035	999,261
2036	332,033
2037	711,418
2038	777,125
2039	787,004
2040	753,621
2041	347,237
2042	536,292
2043	871,794
2044	846,562
2045	993,714

Total non-capital losses carried forward
$ 11,350,721

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 12
Income Taxes
Continued...

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

	September 30, 2025	September 30, 2024
Non-capital losses	$ 2,610,700	$ 2,382,100
Share issue costs	15,800	15,900
Property and equipment	28,800	30,300
Unrealized investment losses (gains)	268,600	259,100
Right of use asset	1,300	1,500
Unrecognized deferred tax asset	(2,925,200)	(2,688,900)
	$ -	$ -

The Company's consolidated income tax position comprises tax benefits and provisions arising from the respective tax positions of its taxable entities. The Company's income tax provision differs from that calculated by applying statutory rates for the following reasons:

	2025	2024
Income tax recovery based on federal and provincial statutory income tax rate of 23.00% (2024 – 23.00%)	$ (247,841)	$ (216,359)
Adjustments and other	11,541	4,626
Unrecognized deferred tax asset	236,300	204,200
	$ -	$ (7,533)

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 13

Net Loss per Common Shares

Basic net loss per common share is determined by dividing net loss available to common shareholders as reported in the Consolidated Statements of Net Loss and Comprehensive Loss by the weighted average number of common shares outstanding for the period.

	2025	2024
Net loss	$ (1,077,568)	$ (933,159)
Weighted average number of common shares outstanding	249,899,486	187,423,280
Basic net loss per common share	$ (0.004)	$ (0.005)

The effect of all anti-dilutive shares was excluded from the diluted net loss per common share calculation.

Note 14

Related Party Transactions

Key management of the Company includes the Chief Executive Officer and Chief Financial Officer. Remuneration paid to key management during the year is as follows:

The Company paid salaries to key management in the amount of $184,000 (2024 - $179,000) during the year ended September 30, 2025.

The Company paid management fees and accounting fees for the year ended September 30, 2025 in the amount of $61,050 (2024 - $66,252) which is included in selling, general and administrative expenses to companies controlled by members of management.

For the year ended September 30, 2025, the Company paid officer and director stipends of $123,000 (2024 - $99,784), which were partially settled with shares (Note 11).

Note 15

Financial Instruments

Financial Instruments

The Company's financial instruments consist of cash, accounts receivable, loans receivable, accounts payable and accrued liabilities, promissory notes payable and convertible debentures.

Fair Value

The carrying values of accounts receivable, loans receivable and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these instruments. Financial instruments also include convertible debentures and promissory notes payable. Management considers that no events have occurred subsequent to the inception of these financing arrangements that would indicate that fair value differs substantially from carrying value.

27

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 15

Financial Instruments
Continued...

The following provides an analysis of financial instruments that are measured at fair value, grouped into levels 1 to 3 based on the degree to which the fair value is observable:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities.
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are not observable for the assets or liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the assets or liabilities that are not based on observable market data.

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consists of accounts receivable. The maximum exposure to credit risk as represented by the carrying amount of the financial asset is $12,699 at September 30, 2025 (2024 - $13,728). In the normal course of business, the Company evaluates the financial condition of its customers on a continuing basis and reviews the credit worthiness of all new customers. Management assesses the need for allowances for potential credit losses by considering the credit risk of specific customers and historical trends for collection of past due accounts. No accounts receivable at September 30, 2025 are impaired.

The aging of accounts receivable is as follows:

	September 30, 2025		September 30, 2024
Current	$	11,200	$	3,843
31-90 days		-		537
91+ days		1,499		9,348
	$	12,699	$	13,728

Concentration of credit risk

Concentration of credit risk is the risk that a customer has more than ten percent of the total accounts receivable balance and thus is a higher risk to the business in the event of a default by one of these customers. Approximately 93% (2024 - 48%) of the Company's accounts receivable are due from one company (2024 – one company). The Company reduces this risk by regularly assessing the credit risk associated with these accounts and closely monitoring overdue balances.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company's objective in managing liquidity risk is to ensure that it has sufficient liquidity available to its liabilities when due. The $100,000 convertible debentures are due on demand. The Company is currently negotiating with the debenture holders to extend the terms or convert their debentures to shares. The Company is actively working towards increasing marketing activities to improve sales of its software to meet future working capital requirements, but it may have to seek additional debt or equity financing.

28

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 15
Financial Instruments
Continued...

Liquidity Risk, continued

At September 30, 2025, the Company had accounts receivable of $12,699 (2024 - $13,728) with which to meet its obligations. At September 30, 2025, the Company had a negative (2024 – positive) working capital of $380,506 (2024 – $245,225).

The contractual maturity of the Company's financial liabilities of $413,075 at September 30, 2025 (2024 - $420,920) is due within twelve months.

Interest Rate Risk

Interest rate risk is the risk that the fair value or the future cash flows of financial instruments will fluctuate due to changes in interest rates. The Company is susceptible to interest rate price risk on its fixed rate debt.

Note 16
Capital Disclosures

The Company's objectives when managing its capital structure are to provide sufficient capital to maintain its current operations and to continue with the development of new and existing products. The Company has no externally imposed capital restrictions.

The Company's officers and senior management take full responsibility for managing the Company's capital and do so through regular meetings and review of financial information. The Company's Board of Directors is responsible for overseeing this process.

The capital structure consisted of the following:

	September 30, 2025		September 30, 2024
Convertible debentures	$	100,000	$	100,000
Contributed surplus		3,934,565		3,833,411
Share capital		12,172,561		11,933,087
Warrant reserve		1,260,867		1,146,495
Deficit		(17,681,618)		(16,604,050)
	$	213,625	$	408,943

The Company plans to focus on its partnerships to generate software sales with licenses that will create residual revenues over time in order to generate more positive cash flows. Management believes that successful execution of its business plan will result in sufficient cash flow to meet its objectives and current obligations.

Methods used by the Company to manage its capital include the issuance of new share capital and financing from related parties.

The Company's capital management objectives have remained unchanged over the years presented.

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Notes to the Consolidated Financial Statements
Years Ended September 30, 2025 and 2024

VISIONSTATE CORP.

Note 17

Revenue

The Corporation disaggregates revenue by three major service lines: (1) "Technical support and service contracts", (2) "Product Sales" and (3) Development contracts revenue. Technical support and service contracts include software license and maintenance.

Estimate of future revenue:

As at September 30, 2025, revenues allocated to remaining performance obligations from software and maintenance agreements extending through to 2026 (2024 - 2025), total approximately $62,122 (2024 - $49,443).

Note 18

Subsequent event

Subsequent to September 30, 2025, the Company has received an advance of $300,000 under the terms of a convertible debenture agreement. The amount is repayable by December 2, 2026. The debenture has an interest rate of 10% per annum, commencing on December 2, 2025. Interest shall be payable annually by the issuance of common shares of the Company at a deemed price of $0.05 per share. At the maturity date, the principal amount shall automatically convert into common shares of the Company at a price of $0.05 per share.

30