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Visionstate Corp. — Management Reports 2025
Feb 27, 2025
44991_rns_2025-02-27_d9db185c-b8de-4b18-8aa7-9a439b93e7e5.pdf
Management Reports
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VISIONSTATE
Management Discussion and Analysis
Dated: February 27, 2025
The following management’s discussion and analysis of the financial condition and results of operations of Visionstate Corp. (the “Company”), for the quarter ended December 31, 2024, should be read in conjunction with the audited consolidated financial statements and the notes thereto for the fiscal year ending September 30, 2024.
The Company’s financial statements have been prepared using International Financial Reporting Standards (“IFRS”) that are applicable to a going concern which contemplates the realization of assets and settlement of liabilities in the norm al course of operations. The Company’s external auditors, Kenway Mack Slusarchuk Stewart LLP, have performed an audit of the consolidated financial statements.
All amounts have been expressed in Canadian dollars unless otherwise stated. Additional information relating to the Company can be found on SEDAR at www.sedar.com.
Forward-Looking Information
This MD&A may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein may be forward-looking statements. Generally, forward-looking statements may be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “proposed”, “is expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved.
These forward-looking statements reflect the Company’s current beliefs and are based on information currently available to the Company and on assumptions the Company believes are reasonable. These assumptions include, but are not limited to, demand for the Company’s products, meeting budgets and forecasts and future costs and expenses being based on historical costs and expenses, adjusted for inflation. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. Such risks and other factors may include, but are not limited to: the early stage development of the Company’s products; general business, economic, competitive, political and social uncertainties; an un-diversified customer base for the Company’s products; competition; delay or failure to receive board or regulatory approvals; changes in legislation affecting the Company; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; and lack of qualified, skilled labor or loss of key individuals.
Although the Company has attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE
reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.
Business Overview
Visionstate Corp. operates primarily through its subsidiary, Visionstate IoT Inc., which develops and markets the WANDA platform. WANDA has been on the market for several years, offering cutting-edge tools for tracking and verifying cleaning and maintenance tasks. Initially ahead of its time, the platform is now becoming a standard in facilities management as organizations increasingly adopt technology for analytics and reporting. This shift highlights WANDA's value proposition, especially in delivering actionable insights that drive efficiency and compliance in maintaining clean, safe environments.
Toward the end of fiscal year 2024, Visionstate Corp. executed its US expansion strategy. This included lead generation campaigns and participation in the ISSA Cleaning Show in Las Vegas in November. These efforts have resulted in a growing sales pipeline, culminating in the first contract through these initiatives scheduled to be signed in early 2025.
Strategic Expansion of WANDA's Capabilities
While WANDA was originally designed for monitoring cleaning tasks in facilities, the company has identified an opportunity to expand its capabilities to include tracking the status and maintenance of equipment. This significant initiative will be a key focus for 2025, representing a new revenue stream and a logical extension of WANDA's functionality.
Additionally, Visionstate plans to launch new technology to enhance inspections and auditing in the second fiscal quarter of 2025. This feature will enable organizations to manage and document compliance with greater precision, offering robust solutions for facility managers. The company already has a pipeline of potential sales for this enhanced WANDA feature.
Growth in the US Market
The US market remains a significant growth opportunity for Visionstate Corp. With the scalability of the WANDA platform and a structured onboarding framework for partners, the company is well-positioned for expansion. Efforts initiated in late 2024, such as direct marketing and attendance at industry events like the ISSA Cleaning Show, have laid the groundwork for sustained growth. The Company will continue on this path by establishing an office in the US and sourcing a distribution partner there as well.
AI Integration and Innovation
Visionstate continues to explore innovations that will enhance WANDA's capabilities. AI-driven functionalities, such as schedule optimization and predictive analytics, are under consideration, reflecting the company's commitment to staying ahead of industry trends.
Financial Performance and Outlook
Visionstate Corp. continues to strengthen its financial position, maintaining robust software margins exceeding 70% and exercising diligent cost control. Q2 2025 is expected to demonstrate significant momentum as new contracts with Canadian colleges and universities contribute to recurring SaaS
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE.COM
revenue.
In addition, the company anticipates new revenue from the development of WANDA’s auditing and inspection features and the expansion into equipment maintenance tracking. These initiatives align with Visionstate’s strategy to diversify its revenue streams and enhance its technology portfolio.
Overall Performance
During the fiscal years 2023 and 2024, Visionstate Corp. had focused on continuing to solidify its relationship with its distribution partner, Bunzl, and to expand the reach of its Wanda facility management technology into global markets. This focus continues to significantly advance the WANDA product’s footprint giving Visionstate the opportunity to entrench itself with major players in the facility management industry, and to continue the development of smart devices. This strategy continues to manifest in fiscal 2025 as sales opportunities continue to expand in the marketplace.
During the fiscal year 2024 the company invested resources into two main things – the integration of Artificial Intelligence (AI), and more specifically, artificial intelligence in the format of a chatbot, into its redesigned Vicci product – known as Vicci 3.0 and expanding the reach of the Wanda product through reseller and partner relationships.
During the quarter ended December 30, 2024, selling, general and administrative expenses increased to $242,761 from $217,685 in the quarter ended December 31, 2023. This was due to the funds spent on attend the ISS show in the US – the biggest facilities management show of the year – in order to expand the Company’s US reach.
Gross revenues for the quarter ended December 31, 2024 decreased by $41,444 to $153,908 from the previous year’s quarter of $195,352 (approximately 22%) because the Company sold more product in the previous year, however the gross margin percentage increased to 93.07% from 72.78% in the quarter ended December 31, 2023, an increase of almost 20.30%. This was a result of increased efficiency in setting up facilities and less hardware installation requiring less intervention by company staff. Management believes that the expanded capabilities of the technology will give the company expanded avenues for generating sales and profits through expanded market reach. Management believes this strategy, over the long term, will generate a greater amount of market penetration as it requires significantly less intervention at deployment and little to no inventory carrying costs.
Revenues are driven primarily by the sale of the Company’s IoT products and sustained from recurring licensing and software support fees, thus as the number of sales increase, so proportionally does the revenue as well as recurring license revenue from existing sales.
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE
Selected Annual Information
The following table details the company's previous three years performance (in Canadian dollars) based on audited financial results prepared in accordance with International Financial Reporting Standards.
| 2022 | 2023 | 2024 | |
|---|---|---|---|
| Total Revenue | $ 410,536 | $ 289,242 | $ 492,376 |
| Net Loss | $ (621,127) | $ (1,727,673) | $ (933,159) |
| Basic and Diluted Net Loss per Common Share | $ (0.01) | $ (0.01) | $ (0.05) |
| Total Assets | $ 976,751 | $ 386,624 | $ 826,073 |
| Total Long Term Financial Liabilities | $ 116,965 | $ 46,767 | $ 29,642 |
Results of Operations
The accompanying audited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary and operating division, Visionstate IoT Inc. and have been prepared in accordance with International Financial Reporting Standards ("IFRS") for financial statements and include all of the disclosures normally contained in the Company's annual financial statements.
Revenue
Total revenues for the quarter ended December 31, 2024 were $153,908 and $195,352 for the quarter ended December 31, 2023. The decrease in revenue from the previous year was mainly a result of a decrease in sales. This Company is now focused on the US market and recently opened an office in Seattle, Washington. In the quarter December 31, 2024, Management focused on expanding its US reach with the intent that sales from that effort will pay off in the following fiscal years.
The gross margin for the quarter ended December 31, 2024 was $136,732 and $142,172 for the prior year's quarter of December 31, 2023. The Gross Margin percentage for the quarter increased to 93.07% from the prior fiscal year quarter 1 ended December 31, 2023 of 72.78%. This was the result of less cost incurred in reselling the software. Cost of sales of the Wanda will be low as a result of the QR code adoption resulting in no costs for hardware. Management also believes that offloading the sales effort costs to distribution partners allows it to focus resources on research and expansion of the product
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE.COM
footprint without additional overhead. A distribution partner in the US market is currently being sought by management.
Selling, General and Administrative
Selling, general and administrative expenses for the quarter ended December 31, 2024 were $242,761 in the current fiscal quarter ending December 31, 2024. In the previous year's quarter ending December 31, 2023, selling, general and administrative was $217,685. These costs include research and development expenses, as well as marketing and sales expenses, public company costs including AGM costs, investor relations and market making activity costs, accounting and legal fees, staffing and general office expenses.
Selling, general and administrative expenses have increased as a result of increased public company costs as well as developer salary increases, cost to attend the ISS show in Las Vegas, and increased professional fees, governance costs and compliance fees.
Summary of Quarterly Results
| Description | Oct 24 – Dec 24 | Jul 24 – Sep 24 | Apr 24 – Jun 24 | Jan 24 – Mar 24 | Oct 23 – Dec 23 | Jul 23 – Sep 23 | Apr 23 – Jun 23 | Jan 23 – Mar 23 |
|---|---|---|---|---|---|---|---|---|
| Total Revenue | 146,908 | 68,239 | 87,928 | 140,857 | 195,352 | 49,048 | 59,690 | 93,322 |
| Net Profit (Loss) | (109,693) | (598,078) | (194,193) | (61,271) | (79,617) | (1,185,609) | (292,857) | (138,716) |
| Basic and Diluted Net Loss Per Common Share | (0.00) | (0.005) | (0.00) | (0.00) | (0.00) | (0.01) | (0.00) | (0.00) |
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE.COM
The quarterly results of the Company mainly fluctuate as a result of variations in revenue, amortization, public company costs and staffing included in selling, general and administrative expenses. Revenue varies directly on the number of units sold and the number of license renewals. In the final quarter the Company recorded a loss on its investments for fair value adjustment of investment and impairment loss. The Company also deferred revenue it had recorded in prior quarters to allow for portions of a development contract that were not completed as at year end. Revenue will be recorded in the new fiscal year once the project is completed.
Liquidity and Capital Resources
The Company has limited financial resources and its ability to continue as a going concern is dependent on attaining profitability. Visionstate continues to deploy its facility management software which has given the company a proprietary platform upon which to customize each client, and this has given the company the ability to deploy in much shorter periods of time to a larger and more varied customer base.
Furthermore, the company is beginning to receive requests for quotations from different market sectors and is beginning to see a definite increase in interest for its product in different areas of the marketplace as IoT becomes increasingly popular as a resource for analytics collection. The Company is also continuing to roll its products out into the US market and internationally, reaching a larger marketplace thereby getting a competitive advantage.
As at the quarter end, the Company had a working capital of $83,762 (2023 a working capital deficiency of $398,284) and is dependent on recurring licensing fees, sales of product and related party advances to ensure adequate cash flow to cover expenses and continue as a going concern. There are no assurances the Company will be able to raise additional funds or attain profitability. The company however continues to develop and deploy its products and establish strategic reseller and other relationships and expand its global penetration and is currently in discussions with its partner for a new product the Company is developing that is strategic to mass market penetration.
Related Party Transactions
The Company paid management fees and accounting fees in the amount of $12,300 in the current fiscal quarter ended December 31, 2024 (December 31, 2023 - $12,300) which is included in selling, general and administrative expenses to companies controlled by members of management.
The Company paid salaries to key management in the amount of $25,000 during the quarter ended December 31, 2024. (2023 - $25,000)
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE
Share Data
Shares Outstanding: 240,126,335 common shares as at February 28, 2025.
Stock Options Outstanding: Nil options to purchase common shares are outstanding as at February 28, 2025.
Common Share Purchase Warrants Outstanding: 119,775,000 as at February 28, 2025.
Adoption of new accounting standards
In January 2020, the IASB issued amendments to IAS 1, Presentation of Financial Statements to clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and is unaffected by expectations about whether or not an entity will exercise their right to defer settlement of a liability. The amendments further clarify that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services. The amendments are effective for annual reporting periods beginning on or after January 1, 2023 and must be applied retrospectively.
The Company is currently evaluating the impact of these amendments on its financial statements and will apply the amendments from the effective date.
Financial Instruments
The Company's financial instruments consist of cash, accounts receivable, investment, bank indebtedness, accounts payable and accrued liabilities, promissory note payable, convertible debentures, advances from related parties and long term debt.
The Company has designated its financial assets and liabilities as follows:
| Financial statement item | Original Classification (Measurement) | New Classification and measurement |
|---|---|---|
| IAS 39 | ||
| Cash and bank indebtedness | Fair Value through profit and loss (fair value) | Amortized cost |
| --- | --- | --- |
| Accounts receivable | Loans and receivables (amortized costs) | Amortized cost |
| Investment | Fair Value through profit and loss (fair value) | FVTPL |
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE.COM
| Equity Investments | Fair Value through Other Comprehensive Income | FVTOCI |
|---|---|---|
| Conversion feature of convertible debenture receivable | Fair Value through profit and loss (fair value) | N/A |
| Accounts payable and accrued liabilities | Other financial liabilities measured at amortized cost | Amortized cost |
| Convertible debentures | Other financial liabilities measured at amortized cost | Amortized cost |
| Advances from related parties | Other financial liabilities measured at amortized cost | Amortized cost |
| Promissory note payable | Other financial liabilities measured at amortized cost | Amortized cost |
| Long Term Debt | Other financial liabilities measured at amortized cost | Amortized cost |
Fair Value
The carrying values of accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these instruments. Financial instruments also include advances from related parties, convertible debentures, long term debt 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.
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) inactive 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.
The investment in a private company is measured based on recent share issuances which is a level 2 fair value measurement.
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE.COM
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 $64,140 at December 31, 2024 (2023 - $130,578). 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. At December 31, 2024, no accounts receivable are past due or impaired.
The aging of accounts receivable is as follows:
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Current | $ 52,333 | $ 124,193 |
| 31 – 90 days | 2,992 | 3,089 |
| 91+ days | 8,815 | 3,296 |
| Total | $ 64,140 | $ 130,578 |
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 95% of the Company's accounts receivable are due from 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 meet 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.
At December 31, 2024, the Company had cash of $389,395 and accounts receivable of $64,140 (2023 - $193,116 of cash and $130,578 of accounts receivable) with which to meet its obligations. At December 31, 2024 the Company had working capital of $83,762 (2023 – a deficit of $398,284)
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE
The contractual maturity of the Company's liabilities of $455,634 at December 31, 2024 (2023 - $898,184) 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 fair value risk on its fixed rate debt.
Capital Management
The Company considers the contributed surplus of $3,914,123 (December 31, 2023 - $2,666,681) share capital of $11,933,087 (December 31, 2023 - $11,104,725), warrant reserve of $1,065,783 (December 31, 2023 - $1,644,937), and convertible debentures of $100,000 (December 31, 2023 – $100,000) as capital. 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 Company is receiving greater interest from the Canadian, US and European marketplaces, including hospitals, airports and shopping centers, in its applications. As well, the Company has successfully entered into reseller agreements with the leading suppliers of facility management solutions which management feels will assist the Company to expand its market reach more expeditiously. 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 issuance of convertible debentures.
The Company's capital management objectives have remained unchanged over the years presented.
Critical Accounting Policies and Estimates
The preparation of the Company's consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes.
There is a full discussion and description of the Company's critical accounting policies in the audited consolidated financial statements for the fiscal year ended September 30, 2024.
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2
VISIONSTATE
Future Plans and Outlook
The company successfully closed a $600,000 financing in late fiscal 2024, ensuring adequate working capital for growth initiatives. These funds are allocated to US expansion, new technology development, and general operations.
Visionstate Corp. is optimistic about its growth trajectory, with plans to expand into new markets beyond Canada. The company will continue developing its core products, emphasizing the importance of analytics, compliance, and operational efficiency in facilities management.
With a clear strategy and a strong pipeline of opportunities, Visionstate Corp. is well-positioned to capitalize on emerging trends and drive sustainable growth.
Impact of COVID-19
COVID-19 has not significantly impacted Visionstate operations. Development staff have worked remotely since restrictions were first introduced and this has not impacted operations negatively. Although the Company has experienced delays in product delivery, specifically Wanda tablets, Visionstate IoT Inc. has pivoted toward WandaMOBILE sales which requires no additional hardware to activate. As such supply chain interruptions resulting from the pandemic have not affected the Company.
In 2024 the Company will continue to emphasize the importance of its Wanda technology in the front-line battle against COVID-19 and its variants. ants.
visionstate.com
780.425.9460
8634 53rd avenue
edmonton, ab, t6e 5g2