(VVS) Versatile Systems
Summary
|
|||||||||||||||||||||||||||||||||||||||||
| Headline | Source | |
|---|---|---|
|
||
| 03-01-12 | RNS |
|
|
RNS Number : 8138U AIM 03 January 2012 NOTICE
03/01/2012 7:00am
CANCELLATION OF ADMISSION OF SECURITIES TO TRADING ON AIM
Versatile Systems Inc.
At the request of the company trading on AIM for the under-mentioned securities have been cancelled from 03/01/2012 7:00am
Common Shares of No Par Value, fully paid, (DI) (B1W3489)(CA92531V1067)
If you have any queries or require further information, please contact the company's nominated adviser on 020 7776 6550.
This information is provided by RNS The company news service from the London Stock Exchange More |
||
| 19-12-11 | RNS |
|
|
FOR: VERSATILE SYSTEMS INC. TSX VENTURE SYMBOL: VV AIM SYMBOL: VVS December 19, 2011 Versatile Reports First Quarter Results VANCOUVER, CANADA--(Marketwire - Dec. 19, 2011) - Versatile Systems Inc. (TSX VENTURE:VV)(AIM:VVS) announces its results for the first quarter of the 2012 fiscal year. Revenue for the three months ended September 30, 2011 was $9,039,212 generating a gross profit of $1,790,378 or 19.8% of sales compared to $9,219,050 generating a gross profit of $2,103,827 or 22.8% of sales for the same quarter last year. The Net Loss for the quarter amounted to $359,911 ($0.00 per share) compared to a Net Loss of $89,314 ($0.01 per share) for the same period last year. "As a result of economic events occurring mid-quarter, several key customers reduced spending, which negatively impacted both revenue and gross profit," said John Hardy, Chairman and CEO of Versatile. "Nevertheless, we managed to be effectively cash flow neutral. In addition, we obtained a new credit facility of $4.5 million, and reduced operating expenses with a strategic relocation of our Mechanicsburg facility. We are in the process of adding new sales resources and remain committed to improving profitability, while carefully managing our expenses." Highlights for the quarter included: /T/ -- Revenue for the three months ended September 30, 2011 was $9,039,212 compared to $9,219,050 for the same quarter last year, a decrease of $179,838; -- The cash flow used in operations amounted to $51,134 for the three months ended September 30, 2011 compared to cash flow generated from operations of $150,269 for the same period last year; -- The research and development expense for the quarter amounted to $244,110 compared to $192,268 for the same quarter last year; -- Deferred revenue at September 30, 2011 was $6,047,097 (of which $5,449,475 is expected to be recognized in the next four quarters) compared to $6,320,199 at June 30, 2011; and -- In order to save costs, the Company relocated to a smaller facility in Mechanicsburg, PA incurring a one-time cost of $65,040. This move will lead to a reduction in premise costs of approximately $200,000 per annum. /T/ During the current quarter, the Company incurred $129,294 for research and development activities related to Mobiquity Route(TM), DEX and related mobile software products and $72,362 related to Mobiquity Transaction Engine 3.0(TM) and Mobiquity Kiosk(TM). During the current quarter the Company changed its banking facilities for its U.S. based operations to a new financial institution, which is providing a credit facility for up to $4,500,000 on more favorable terms than the former bank. "While the Company incurred a loss of $359,911 the cash used in operations amounted to $51,134," said Fraser Atkinson, CFO of Versatile. "Excluding the one-time moving costs the Company would have generated positive cash flow from operations. In addition, restoring the gross profit of 19.8% to the historical average of 21% to 22% will have a positive impact on cash flow." The Company adopted IFRS during the current reporting period. The Company has applied the transitional exceptions and exemptions to full retroactive application of IFRS in its preparation of an opening IFRS consolidated statement of financial position at July 1, 2010. The most significant changes include the reclassification of deferred contract costs to intangible assets and the reclassification of current deferred income taxes to long term. Further details of the conversion to IFRS are provided in Management's Discussion and Analysis and in the Notes to the Company's unaudited, Condensed Consolidated Financial Statements, as at and for the three months ended September 30, 2011. About Versatile Versatile provides business solutions that enable companies to improve sales, marketing and distribution of their products. Versatile also provides information technology services for the implementation, maintenance and security of mission-critical computer environments. Versatile has the ability to architect solutions involving both proprietary and third party components. For more information: www.versatile.com. Forward-Looking Statements This document may contain forward-looking statements relating to Versatile's operations or to the environment in which it operates, which are based on Versatile's operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict or are beyond Versatile's control. A number of important factors including those set forth in other public filings could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward- looking statements relate to the date on which they are made. Versatile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. All amounts are expressed in U.S. dollars unless otherwise stated. (C) 2011 Versatile Systems Inc. All rights reserved. Versatile Systems Inc. Consolidated Financial Statements September 30, 2011 (unaudited - prepared by management) Consolidated Statements of Financial Position Consolidated Statements of Operations and Comprehensive Loss Consolidated Statements of Changes in Shareholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements The interim consolidated financial statements as at and for the period ended September 30, 2011 have not been reviewed or audited by the Company's auditor. /T/ Versatile Systems Inc. Consolidated Statements of Financial Position (Unaudited - Prepared by Management) Expressed in U.S. September 30, June 30, July 1, dollars 2011 2011 2010 --------------------------------------------------- ASSETS Current Assets Cash and cash equivalents $ 563,999 $ 978,656 1,738,036 Investment in Equus (note 3) 1,810,369 2,311,109 2,203,043 Accounts receivable 5,535,268 7,134,328 10,580,706 Prepaid expenses 253,291 228,062 236,993 Inventory 1,910,121 1,849,635 1,719,477 ------------------------------------------------- 10,073,048 12,501,790 16,478,255 Long-term accounts receivable 312,339 401,742 265,612 Capital Assets 221,587 270,437 519,391 Intangible assets (note 4) 5,123,645 5,048,776 6,392,005 Deferred income tax assets (note 9) 7,136,316 7,001,156 6,965,850 Goodwill 9,914,350 9,914,350 9,914,350 ------------------------------------------------- $ 32,781,285 $ 35,138,251 40,535,463 ------------------------------------------------- ------------------------------------------------- LIABILITIES Current Liabilities Line of credit (note 5) $ 724,981 1,007,767 1,353,312 Accounts payable and accrued liabilities 5,878,754 6,823,643 9,955,342 Current portion of deferred revenue 5,449,475 5,670,932 7,432,210 ------------------------------------------------- 12,053,210 13,502,342 18,740,864 Deferred Revenue 597,622 649,267 710,269 ------------------------------------------------- 12,650,832 14,151,609 19,451,133 ------------------------------------------------- SHAREHOLDERS' EQUITY Share Capital (note 6) 54,433,709 54,433,709 54,433,709 Warrants (note 7) 42,000 42,000 186,367 Equity Reserve 4,582,940 4,578,470 4,231,539 Deficit (37,424,509) (37,064,598) (36,965,836) Accumulated other comprehensive loss (1,503,687) (1,002,939) (801,449) ------------------------------------------------- 20,130,453 20,986,642 21,084,330 ------------------------------------------------- $ 32,781,285 $ 35,138,251 40,535,463 ------------------------------------------------- ------------------------------------------------- Approved on behalf of the Board on December 13, 2011: DIRECTOR: John Hardy DIRECTOR: Fraser Atkinson See Notes to Consolidated Financial Statements Versatile Systems Inc. Consolidated Statements of Operations and Comprehensive Loss (Unaudited - Prepared by Management) Expressed in U.S. dollars Three months ended September 30 2011 2010 ---------------------------------------- SALES $ 9,039,212 $ 9,219,050 COST OF SALES 7,248,834 7,115,223 ---------------------------------------- 1,790,378 2,103,827 ---------------------------------------- EXPENSES Selling and marketing 1,019,931 1,008,567 General and administrative 961,127 890,450 Research and development 244,110 192,268 Non recurrring expenses - 20,668 Stock-based compensation 4,470 - Foreign exchange loss 824 2,333 ---------------------------------------- 2,230,462 2,114,286 ---------------------------------------- OPERATING LOSS (440,084) (10,459) Amortization of capital assets 48,419 71,161 Interest expense 5,223 14,970 ---------------------------------------- LOSS BEFORE INCOME TAXES (493,726) (96,590) Current income tax expense (1,345) (995) Deferred income tax benefit 135,160 8,271 ---------------------------------------- NET LOSS (359,911) (89,314) ---------------------------------------- ---------------------------------------- LOSS PER SHARE (basic and diluted) ($0.00) ($0.00) ---------------------------------------- ---------------------------------------- Net loss (359,911) (89,314) Other comprehensive loss Net change in fair value of available-for-sale investments (500,748) (246,609) ---------------------------------------- Total comprehensive loss (860,659) (335,923) ---------------------------------------- ---------------------------------------- See Notes to Consolidated Financial Statements Versatile Systems Inc. Consolidated Statements of Changes in Shareholders' Equity (Unaudited - Prepared by Management) Expressed in U.S. dollars Accumu- lated other compreh- Share Warr- Equity ensive Capital ants Reserve Deficit loss Total ---------------------------------------------------------------- Balance, July 1, 2010 54,433,709 186,367 4,231,539 (36,965,836) (801,449) 21,084,330 Net loss (89,314) (89,314) Net change in fair value of available- for-sale invest- ments (246,609) (246,609) ---------------------------------------------------------------- Balance, September 30, 2010 54,433,709 186,367 4,231,539 (37,055,150) (1,048,058) 20,748,407 ---------------------------------------------------------------- ---------------------------------------------------------------- Balance, June 30, 2011 54,433,709 42,000 4,578,470 (37,064,598) (1,002,939) 20,986,642 Net loss (359,911) (359,911) Net change in fair value of available- for-sale investment s (500,748) (500,748) Share-based compens- ation expense - - 4,470 - - 4,470 ---------------------------------------------------------------- Balance, September 30, 2011 54,433,709 42,000 4,582,940 (37,424,509) (1,503,687) 20,130,453 ---------------------------------------------------------------- ---------------------------------------------------------------- See Notes to Consolidated Financial Statements Versatile Systems Inc. Consolidated Statements of Cash Flows (Unaudited - Prepared by Management) Expressed in U.S. dollars Three months ended September 30 2011 2010 ---------------------------------------- OPERATING ACTIVITIES Net loss $ (359,911) $ (89,314) Items not affecting cash Amortization of capital assets 52,509 74,252 Stock-based compensation 4,470 - Unrealized foreign exchange gain - 495 Deferred income taxes (135,160) (8,271) ---------------------------------------- Cash flow used in operations before other items (438,092) (22,838) Net change in non-cash working capital (note 11) 386,958 173,107 ---------------------------------------- (51,134) 150,269 INVESTING ACTIVITIES Proceeds from disposition of capital assets 1,341 73,094 Intangible assets - contract cost additions (1,355,780) (1,629,194) Amortization of intangible assets 1,280,911 1,604,148 Purchase of capital assets (7,209) (39,825) ---------------------------------------- (80,737) 8,223 ---------------------------------------- FINANCING ACTIVITIES Repayment of line of credit (282,786) (433,031) ---------------------------------------- (282,786) (433,031) ---------------------------------------- Decrease in cash and cash equivalents (414,657) (274,539) Cash and cash equivalents, beginning of period 978,656 1,738,036 ---------------------------------------- Cash and cash equivalents, end of period $ 563,999 $ 1,463,497 ---------------------------------------- ---------------------------------------- Supplemental cash flow information (note 11) See Notes to Consolidated Financial Statements /T/ Versatile Systems Inc. Notes to Consolidated Financial Statements For the period ended September 30, 2011 (Unaudited - Prepared by Management) 1. Consolidated financial statement presentation: The Company previously prepared its financial statements in accordance with Canadian generally accepted accounting principles ("Canadian GAAP") as set out in Part V of the Handbook of the Canadian Institute of Chartered Accountants ("CICA Handbook"). In 2010, the CICA Handbook was revised to incorporate International Financial Reporting Standards ("IFRS"), and required publicly accountable enterprises to apply such standards effective for years beginning on or after January 1, 2011, with early adoption permitted. Accordingly, these unaudited interim consolidated financial statements are prepared in accordance with IFRS, as issued by the International Accounting Standards Board ("IASB"). In these unaudited interim consolidated financial statements, the term "Canadian GAAP" refers to Canadian GAAP before the Company's adoption of IFRS. As these financial statements represent the Company's initial presentation of its financial position, financial performance and cash flows in accordance with IFRS, they have been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting, and IFRS 1, "First- Time Adoption of International Financial Reporting Standards" ("IFRS 1"). Subject to certain transition elections disclosed in Note 16, the Company has consistently applied the same accounting policies in its opening IFRS statement of financial position as at July 1, 2010 and throughout all periods presented, as if these policies had always been in effect. Note 11 discloses the impact of the transition to IFRS on the Company's reported financial position and results from operations, including the nature and effect of significant changes in accounting policies from those used in its Canadian GAAP consolidated financial statements for the three months ended September 30, 2010 and the year ended June 30, 2011. The results of operations for the period ended September 30, 2011 are not necessarily indicative of the results for the full year ending June 30, 2012. Significant Accounting Policies (a) Principles of consolidation These consolidated financial statements are prepared in accordance with IFRS and include the accounts of the Company and all its wholly-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation. All amounts are expressed in U.S. dollars, unless otherwise stated. (b) Cash and cash equivalents Cash and cash equivalents consist of cash on deposit and highly liquid short-term interest bearing securities with maturities at the date of purchase of three months or less. Interest earned during the year is recognized in the statement of operations. (c) Inventory Inventory consists of kiosk hardware, handheld devices and peripherals used in sales force automation systems. Inventory is valued at the lower of cost and net realizable value, determined on a first-in, first-out basis. (d) Deferred service contract costs Deferred service contract costs are amortized on a straight-line basis over the life of the contracts, which range from three months to three years. These deferred amounts relate to third party maintenance costs for third party equipment installed at customer sites and sales commission costs, which have been paid for in advance. (e) Capital assets The Company records capital assets at acquisition cost. The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. changes in the expected useful life or the expected pattern of consumption of future economic benefits embodies in the asset are accounted for by changing the depreciation period and are treated as changes in accounting estimates. The capital assets are amortized using the straight-line method over the following estmated useful lives: /T/ Automobiles 20% per annum Computer and office 20% - 33-1/3% per annum Computer software 33-1/3% per annum Demonstration 50% per annum Tenant improvements Over the remaining term of lease /T/ (f) Goodwill and intangible assets Goodwill represents the excess of the purchase price of an acquired business over the fair values of the identifiable net assets acquired. Research costs are charged to operations when they are incurred. Development costs are charged to operations in the period incurred unless the Company can demonstrate that a development project meets certain criteria for capitalization and amortization under IFRS. The Company has not capitalized any development costs during 2010 or 2011. Intangible assets acquired, either individually or with a group of assets, are initially recognized and measured at cost. Intangible assets acquired in a business combination that meet the specified criteria for recognition, apart from goodwill, are initially recognized and measured at fair value. All of the Company's intangible assets have finite lives and are amortized over their estimated useful lives using the straight-line method at the following rates: /T/ Deferred contract costs Average contract term Purchased technology 3 years Customers - Perfect 5 years Intellectual property 18 months Licences 4 years /T/ Goodwill is not amortized and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is carried out in two steps. In the first step, the carrying amount of a reporting unit is compared with its fair value. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired and the second step of the impairment test is unnecessary. The second step is only required when the carrying amount of the reporting unit exceeds its fair value, in which case the implied fair value of a reporting unit's goodwill is compared with its carrying amount to measure the amount of the impairment loss. When the carrying amount of a reporting unit's goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess and is presented as a separate line item in the statement of operations before extraordinary items and discontinued operations. (g) Income taxes Deferred income tax is recognized using the liability method, based on temporary differences between consolidated financial statement carrying amounts of assets and liabilities and their respective income tax bases. Deferred income tax is determined using tax rates that have been enacted or substantively enacted by the date of the statement of financial position and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. The amount of deferred income tax recognized is based on the expected manner and timing of realization or settlement of the carrying amount of assets and liabilities. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax assets are reviewed at each date of the statement of financial position and amended to the extent that it is no longer probable that the related tax benefit will be realized. (h) Foreign currency translation The U.S. dollar is the reporting and functional currency for the Company. The functional currency of all of the Company's subsidiaries is the U.S. dollar. The consolidated financial statements are presented in U.S. dollars, which is the functional currency of the Company. Foreign currency transactions, including U.S. dollar, Canadian dollar and Great Britain pound operating transactions, are translated to U.S. dollars at the average exchange rate for the month. Monetary assets and liabilities are translated at period-end exchange rates. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss in the period in which they arise. (i) Financial Instruments The Company's classification and measurement basis of its financial instruments are as follows: /T/ Instrument Classification Measurement basis --------------------------------------------------------------------------- Cash and cash equivalents Held for trading Fair value Investment in Equus Available for sale Fair value Accounts receivable Loans and receivables Amortized cost Line of credit and bank overdraft Other liabilities Amortized cost Accounts payable and accrued liabilities Other liabilities Amortized cost /T/ Changes in fair value of instruments classified as held for trading are recorded in the statement of operations. Changes in fair value of instruments classified as available for sale are recorded in other comprehensive income unless the change in fair value is considered other than temporary, in which case it is recorded in the statement of operations. All amounts carried at amortized cost are calculated using the effective interest rate method. Available-for-sale securities are reviewed periodically for possible other-than-temporary impairment and more frequently when economic or market concerns warrant such evaluation. The review includes an analysis of the facts and circumstances of the investment including the severity of loss, the financial position and near term prospects of the investment, the length of time the fair value has been below cost, management's intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value and management's market view and outlook. The Company classifies and discloses the fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: /T/ -- Level 1 - Valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities; -- Level 2 - Valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and -- Level 3 - Valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs). /T/ The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value. (j) Revenue recognition Revenue on sales of hardware products is recognized when delivered to the customer. The Company recognizes revenue from the sale of software products on delivery of the product or performance of the services if persuasive evidence of an agreement with the customer exists, the price is fixed and determinable, collection is probable, and there are no ongoing obligations of the Company to provide future services. Revenue from projects which include significant modification or customization of software is recognized using the percentage of completion method of accounting, whereby revenue and profit in the period are based on the ratio of costs incurred to total estimated costs of the project. Costs include all direct costs and certain indirect costs related to the projects. A provision is made for the entire amount of future estimated losses, if any, for contracts in progress. Revenue from professional services is recognized on a percentage of completion basis. Maintenance revenue is recognized over the term of the related agreement on a straight-line basis. Deferred revenues represent amounts invoiced in excess of revenues recognized. Post-contract support, or maintenance, revenue associated with certain of the Company's products is recognized on a straight-line basis over the maintenance term, which is generally within the next fiscal year. Revenue not recognized in profit or loss under this policy is classified as deferred revenue in the statement of financial position when amounts have been billed in advance. (k) Warranty costs Warranty costs that are not otherwise covered by suppliers are accrued upon the recognition of the related revenue, based on the Company's best estimate, with reference to past experience. (l) Sales and Marketing The primary components of sales and marketing are employee compensation, employee benefits, office and communications, travel, and professional services. (m) Research and development The primary components of research and development expenses are employee compensation, employee benefits, professional services, communications, and travel. (n) General and administration The primary components of general and administration are premise costs, employee compensation, employee benefits, communications, travel, public company administration, insurance, and professional services. (o) Stock-based compensation The Company has an employee stock option plan ("Option Plan"). The Company records the estimated fair value of the grants as compensation expense over the benefit period with a corresponding credit to equity reserve. The Company recognizes the stock-based compensation expense for all employee and non- employee stock-based compensation transactions using a fair value based method. The fair value of stock-based payments to non-employees is periodically re-measured until the earlier of: completion of the services provided a firm commitment to complete the services or the vesting date and any change therein is recognized over the service period. For stock options exercised, consideration paid plus the fair value of options previously recorded as equity reserve are recorded as share capital on exercise of the options. (p) Significant accounting estimates The preparation of these interim consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual outcomes could differ from these estimates. The interim consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the interim consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and the revision affects both current and future periods. (q) Adoption of Future Accounting Standards The IASB has issued the following standards, which have not yet been adopted by the Company. Each of the new standards is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company has not yet begun the process of assessing the impact that the new and amended standards will have on its interim consolidated financial statements or whether to early adopt any of the new requirements. The following is a description of the new standards: IFRS 9 - "Financial Instruments" ("IFRS 9") IFRS 9 was issued in November 2009 and contained requirements for financial assets. This standard addresses classification and measurement of financial assets and replaces the multiple category and measurement models in IAS 39 Financial Instruments - Recognition and measurement for debt instruments, with a new mixed measurement model having only two categories: amortized cost and fair value through profit or loss. IFRS 9 also replaces the models for measuring equity instruments and such instruments are either recognized at fair value through profit or loss or at fair value through other comprehensive income (loss). Where such equity instruments are measured at fair value through other comprehensive income (loss), dividends are recognized in profit or loss to the extent not clearly representing a return of investment; however, other gains and losses (including impairments) associated with such instruments remain in accumulated comprehensive income (loss) indefinitely. Requirements for financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS 39, except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income (loss). The Company has not yet assessed the impact of the adoption of IFRS 9 on its results from operations or its financial position. IFRS 10 - "Consolidation" ("IFRS 10") IFRS 10 requires an entity to consolidate an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Under existing IFRS, consolidation is required when an entity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. IFRS 10 replaces SIC-12 "Consolidation-Special Purpose Entities" and parts of IAS 27, "Consolidated and Separate Financial Statements". The Company does not believe the adoption of IFRS 10 will materially affect its results from operations or its financial position. IFRS 11 - "Joint Arrangements" ("IFRS 11") IFRS 11 requires a venture to classify its interest in a joint arrangement as a joint venture or joint operation. Joint ventures will be accounted for using the equity method of accounting, whereas for a joint operation, the venture will recognize its share of the assets, liabilities, revenue and expenses of the joint operation. Under existing IFRS, entities have the choice to proportionately consolidate or equity account for interests in joint ventures. IFRS 11 supersedes IAS 31, "Interests in Joint Ventures", and SIC-13, "Jointly Controlled Entities-Non-monetary Contributions by Ventures". The Company does not believe the adoption of IFRS 10 will materially affect its results from operations or its financial position. IFRS 12 - "Disclosure of Interests in Other Entities" ("IFRS 12") IFRS 12 establishes disclosure requirements for interests in other entities, such as joint arrangements, associates, special purpose vehicles and off-balance sheet vehicles. The standard carries forward existing disclosures and also introduces significant additional disclosure requirements that address the nature of, and risks associated with, an entity's interests in other entities. The Company does not believe the adoption of IFRS 10 will materially affect its results from operations or its financial position. IFRS 13 - "Fair Value Measurement" ("IFRS 13") IFRS 13 is a comprehensive standard for fair value measurement and disclosure requirements for use across all IFRS. The new standard clarifies that fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. It also establishes disclosures about fair value measurement. Under existing IFRS, guidance on measuring and disclosing fair value is dispersed among the specific standards requiring fair value measurements and, in many cases, does not reflect a clear measurement basis or consistent disclosures. The Company has not yet assessed the impact of the adoption of IFRS 13 on its results from operations or its financial position. 3. Investment in Equus The Investment in Equus consists of 962,962 shares of Equus Total Return, Inc. which is a public company trading on the NYSE under the symbol EQS. The share price as at September 30, 2011 was $1.88 so the unrealized loss for the quarter was $500,748 and the cumulative unrealized loss was $1,211,900. 4. Intangible Assets Intangible assets consists of deferred service contract costs, which is comprised of third party maintenance costs and deferred sales commissions. 5. Line of Credit The Company has a credit line facility for up to $4,500,000, which is limited to 80% of eligible accounts receivable of a U.S. subsidiary from a U.S. based financial institution. At September 30, 2011 this amounted to $3,548,623. The line of credit bears interest at the prime rate of lending as published in the Wall Street Journal plus one-half percent and is secured with a first charge on the assets of the U.S. subsidiary. 6. Share Capital /T/ Authorized Unlimited common shares without par value Issued and outstanding Number of shares Amount -------------------------------- Issued and outstanding - June 30, 2011 157,285,643 $ 54,433,709 Issued during the period - - -------------------------------- Balance - September 30, 2011 157,285,643 $ 54,433,709 -------------------------------- /T/ 7. Warrants /T/ Issued and outstanding: Exercise Number of Expiry date Price CDN$ Warrants Cost ------------------------------------------------------------------------- January 22, 2012 $ 0.30 600,000 $ 42,000 ------------------------ Balance - September 30, 2011 600,000 $ 42,000 ------------------------ ------------------------ /T/ The effect of any adjustment to the carrying value of the warrants under IFRS would not be material to these financial statements. 8. Stock Options /T/ Weighted average Number of exercise Stock Options price CDN$ -------------------------------- Balance - June 30, 2011 10,948,100 $ 0.12 Granted during the period - Forfeited during the period - Expired during the period - -------------------------------- Balance - September 30, 2011 10,948,100 $ 0.12 -------------------------------- -------------------------------- Exerciseable - September 30, 2011 10,506,433 $ 0.12 -------------------------------- -------------------------------- /T/ The estimated fair value of the stock options granted during the year ended June 30, 2011 was estimated on the date of the grant using the Black-Scholes option pricing model with an expected dividend yield of Nil, expected volatility of 84.6%, risk free interest rate of 3.0% and an expected average option term of 1.1 years. 9. Income taxes The Company follows the asset and liability method of accounting for income taxes. Under this method of tax allocation, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities and are measured using substantively enacted tax rates expected to be in effect when the differences are expected to be reversed. A valuation allowance is recorded against any deferred tax asset to the extent that it is probably that taxable profit will be available against which the deductible temporary difference can be utilized. /T/ September 30, June 30, 2011 2011 -------------------------------------- Deferred income tax assets Tax losses and deductions $ 9,322,507 $ 9,185,997 Capital assets 964,355 969,879 Share issuance costs 4,278 4,609 Other 240,346 194,619 -------------------------------------- Deferred income tax assets 10,531,486 10,355,104 Valuation allowance (2,639,519) (2,598,297) -------------------------------------- Net deferred income tax asset 7,891,967 7,756,807 Deferred income tax liabilities - Goodwill (755,651) (755,651) -------------------------------------- Deferred income tax asset 7,136,316 7,001,156 -------------------------------------- -------------------------------------- /T/ During the three months ended September 30, 2011 the Company recorded a deferred income tax benefit of $135,160 related to the recognition of deferred income tax assets compared to a deferred income tax benefit of $8,271 for the comparable period last year. 10. Segmented Information The Company's only reportable segment is the development and sales of computer software, hardware and system integration services. The Company's assets and sales by geographic area are as follows: /T/ Three months ended September 30 June 30 September 30 2011 2011 2011 2010 ---------------------------------------------------------- Capital Capital assets, assets, intangible intangible assets assets and goodwill and goodwill Revenue Revenue U.S. companies United States $ 15,253,802 $ 15,224,790 $ 8,296,498 $ 8,983,332 Canada - - 327,363 31,931 Netherlands - - 8,256 6,775 France - - 30,389 24,418 United Kingdom - - 149,122 36,987 Australia - - 17,413 27,803 Other - - 6,109 6,955 UK and Canadian companies United Kingdom 968 3,588 229,731 100,849 Canada 4,812 5,185 - - ---------------------------------------------------------- 15,259,582 15,233,563 9,039,212 9,219,050 ---------------------------------------------------------- ---------------------------------------------------------- /T/ During the three months ended September 30, 2011 the Company generated revenue of $1,234,533 from American Eagle representing 13.7% of the revenue for that period. During the three months ended September 30, 2010 the Company generated revenue of $1,181,577 from Comcast Cable representing 12.8% of the revenue for that period. During the three months ended September 30, 2011 the Company purchased products and services from two vendors for $2,082,484 and $1,129,619 respectively (2010 - $3,616,381) representing 28.7% and 15.6% (2010 - 50.8%) of the cost of sales. 11. Supplemental cash flow information /T/ 2011 2010 ------------------------------ Cash paid for interest expense $ 12,374 $ 12,064 Cash paid for income taxes 1,423 1,419 The net changes in the non-cash working capital: Accounts receivable 1,599,060 3,898,946 Prepaid expenses (25,229) (77,209) Inventory (60,486) 41,607 Long-term accounts receivables 89,403 38,102 Accounts payable and accrued liabilities (942,688) (3,821,833) Deferred revenue (273,102) 93,494 ------------------------------ 386,958 173,107 ------------------------------ ------------------------------ /T/ 12. Adoption of IFRS Overview The effect of the Company's transition to IFRS, as described in note 2, is summarized as follows: (a) transition elections; (b) reconciliation of equity and comprehensive income (loss) as previously reported under Canadian GAAP to IFRS; (c) explanatory notes; (d) adjustments to the consolidated interim statements of cash flows; and (e) additional IFRS information and disclosures for the year ended June 30, 2011. Transition elections The adoption of IFRS requires the application of IFRS 1, "First-time Adoption of International Financial Reporting Standards" ("IFRS 1"), which provides guidance for an entity's initial adoption of IFRS. IFRS 1 generally requires retrospective application of IFRS effective at the end of the Company's first annual IFRS reporting period. However, IFRS 1 also provides certain optional exemptions and mandatory exceptions to this retrospective treatment. The Company has applied the following transitional exceptions and exemptions to full retrospective application of IFRS in its preparation of an opening IFRS consolidated statement of financial position at July 1, 2010 (the Company's "Transition Date"): i) To apply IFRS 2, "Share-based Payments", retrospectively only to awards that were issued after November 7, 2002 and where any portion of said awards had not vested by the Transition Date; and ii) To apply IFRS 3, "Business Combinations", prospectively from the Transition Date and, therefore, not restate business combinations that took place prior to the Transition Date. As such, Canadian GAAP balances relating to business combinations entered into before the Transition Date, including acquired intangible assets, have been carried forward without adjustment. The Company's Transition Date IFRS consolidated statement of financial position is included as comparative information in the consolidated interim statements of financial position in these interim consolidated financial statements. Reconciliation of Statement of Financial Position at July 1, 2010 /T/ IFRS Canadian Reclassifi- Notes GAAP cations IFRS ---------------------------------------------------- ASSETS Current Assets Cash and cash equivalents 1,738,036 1,738,036 Investment in Equus 2,203,043 2,203,043 Accounts receivable 10,580,706 10,580,706 Current portion of deferred contract costs (a) 5,793,180 (5,793,180) - Prepaid expenses 236,993 236,993 Inventory 1,719,477 1,719,477 Future income tax benefits (b) 721,975 (721,975) - --------------------------------------------- 22,993,410 (6,515,155) 16,478,255 Long-term accounts receivable 265,612 265,612 Deferred contract costs (a) 598,366 (598,366) - Capital Assets 519,391 519,391 Intangible assets (a) 459 6,391,546 6,392,005 Future income tax benefits (b) 6,243,875 721,975 6,965,850 Goodwill 9,914,350 9,914,350 --------------------------------------------- 40,535,463 - 40,535,463 --------------------------------------------- --------------------------------------------- LIABILITIES Current Liabilities Line of credit 1,353,312 1,353,312 Accounts payable and accrued liabilities 9,955,342 9,955,342 Current portion of deferred revenue 7,432,210 7,432,210 --------------- --------------- 18,740,864 18,740,864 Deferred Revenue 710,269 710,269 --------------- --------------- 19,451,133 19,451,133 SHAREHOLDERS' EQUITY Share Capital 54,433,709 54,433,709 Warrants (c) 186,367 186,367 Contributed surplus (d) 4,231,539 4,231,539 Deficit (36,965,836) (36,965,836) Accumulated other comprehensive loss (801,449) (801,449) --------------- --------------- 21,084,330 21,084,330 40,535,463 40,535,463 --------------- --------------- --------------- --------------- /T/ Reconciliation of Statement of Financial Position at June 30, 2011 /T/ IFRS Canadian Reclassifi- Notes GAAP cations IFRS ---------------------------------------------------- ASSETS Current Assets Cash and cash equivalents $ 978,656 $ 978,656 Investment in Equus 2,311,109 2,311,109 Accounts receivable 7,134,328 7,134,328 Current portion of deferred contract costs (a) 4,469,066 (4,469,066) - Prepaid expenses 228,062 228,062 Inventory 1,849,635 1,849,635 Future income tax benefits (b) 546,252 (546,252) - --------------------------------------------- 17,517,108 (5,015,318) 12,501,790 Long-term accounts receivable 401,742 401,742 Deferred contract costs (a) 579,710 (579,710) - Capital Assets 270,437 270,437 Intangible assets (a) - 5,048,776 5,048,776 Future income tax benefits (b) 6,454,904 546,252 7,001,156 Goodwill 9,914,350 9,914,350 --------------------------------------------- 35,138,251 - 35,138,251 --------------------------------------------- --------------------------------------------- LIABILITIES Current Liabilities Line of credit 1,007,767 1,007,767 Accounts payable and accrued liabilities 6,823,643 6,823,643 Current portion of deferred revenue 5,670,932 5,670,932 --------------- --------------- 13,502,342 13,502,342 Deferred Revenue 649,267 649,267 --------------- --------------- 14,151,609 14,151,609 SHAREHOLDERS' EQUITY Share Capital 54,433,709 54,433,709 Warrants (c) 42,000 42,000 Contributed surplus (d) 4,578,470 4,578,470 Deficit (37,064,598) (37,064,598) Accumulated other comprehensive loss (1,002,939) (1,002,939) --------------- --------------- 20,986,642 20,986,642 35,138,251 35,138,251 --------------- --------------- --------------- --------------- /T/ Explanatory notes /T/ a. Intangible assets. Under Canadian GAAP, the Company deferred and amortized deferred contract costs, consisting of third party maintenance costs and deferred sales commissions. These costs were split into their current and long-term portions on the statement of financial position as deferred contract costs. Under IFRS, these costs continue to be deferred; however, they are now presented as a portion of intangible assets. On the Transition Date, $5,793,180 was reclassified from current deferred contract costs and $598,366 was reclassified from long-term deferred contract costs to intangible assets. Amortization of those assets remained the same under IFRS as it was under Canadian GAAP. b. Deferred income taxes. Under Canadian GAAP, deferred income taxes (future income taxes) were classified as current or long term based on the underlying classification of the item in the statement of financial position on which it was calculated. Under IFRS, deferred income taxes are all long-term. At the Transition Date, the Company reclassified $721,975 from current to long-term deferred tax assets. c. Warrants. Under Canadian GAAP the Warrants were valued at the time that they were issued. IFRS requires that these be revalued at the end of each reporting period. On the Transition Date, the change was not material so no adjustment was made. d. Share-based compensation. Under Canadian GAAP, each stock option grant was treated as a single arrangement and compensation expense was determined at the time of grant and amortized over the vesting period, generally 48 months, on a straight-line basis. IFRS requires a separate calculation of compensation expense for awards that vest in instalments. Under Canadian GAAP, forfeitures of the share-based compensation awards could be accounted for in the period in which the forfeitures occurred. Under IFRS, compensation expense differs from Canadian GAAP based on the changing fair values used for each instalment, the application of the forfeiture rate and the timing of recognizing compensation expense. Generally, this results in accelerated expense recognition under IFRS. On the Transition Date, the amount of the additional compensation expense was not material so no adjustment was made. /T/ Versatile Systems Inc. Management Discussion and Analysis Three months ended September 30, 2011 The following management discussion and analysis of the consolidated results of operations and financial condition of Versatile Systems Inc. (the "Company" or "Versatile") is made as of December 13, 2011 on the unaudited interim consolidated financial statements and notes for the three months ended September 30, 2011. The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are stated in United States dollars unless otherwise specified. The unaudited interim consolidated financial statements and management discussion and analysis have been reviewed and approved by the Company's Audit Committee as directed by the Company's Board of Directors. The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions, which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. Forward-Looking Statements This document may contain forward-looking statements relating to Versatile's operations or to the environment in which it operates, which are based on Versatile's operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict or are beyond Versatile's control. A number of important factors including those set forth in other public filings could cause actual outcomes and results to differ materially from those expressed in these forward looking statements. Consequently readers should not place any undue reliance on such forward-looking statements. In addition, these forward looking statements relate to the date on which they are made. Versatile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Non-GAAP Disclosure EBITDA is defined by the Company as net earnings before interest, income taxes, depreciation and amortization. The Company has included information concerning EBITDA because it believes that it may be used by certain investors as one measure of the Company's financial performance. EBITDA is not a measure of financial performance under IFRS and is not necessarily comparable to similarly titled measures used by other companies. EBITDA should not be construed as an alternative to operating income or to cash flows from operating activities (as determined in accordance with IFRS) as a measure of liquidity. In addition, the Company has included information concerning its cash flow from operations before the net change in non-cash operating balance sheet items as it may be used by certain investors as a measure of the Company's financial performance. Overview The Company's core business is developing solutions that solve customers' problems in the storage, security, transmission and collection of mission critical data. The Company's proprietary software applications, the Mobiquity(TM) Solution Suite, are a key component of this solution. This enables companies to improve the sales, marketing and distribution of their products. The Company delivers wireless/wired solutions to the consumer packaged goods, retail, financial, pharmaceutical, healthcare, and logistics verticals through an integrated combination of licensed software, professional services, and the re-sale of mobile and storage related hardware. The Company also offers maintenance and support via a 24 hour call centre. Adoption of International Financial Reporting Standards (IFRS) The Company adopted IFRS during the current reporting period. The effect of the Company's transition to IFRS, as described in the notes to the interim consolidated financial statements as at and for the period ended September 30, 2011, is summarized as follows: (a) transition elections; (b) reconciliation of equity and comprehensive income (loss) as previously reported under Canadian GAAP to IFRS; (c) explanatory notes; (d) adjustments to the consolidated interim statements of cash flows; and (e) additional IFRS information and disclosures for the year ended June 30, 2011. Transition elections The adoption of IFRS requires the application of IFRS 1, "First-time Adoption of International Financial Reporting Standards" ("IFRS 1"), which provides guidance for an entity's initial adoption of IFRS. IFRS 1 generally requires retrospective application of IFRS effective at the end of the Company's first annual IFRS reporting period. However, IFRS 1 also provides certain optional exemptions and mandatory exceptions to this retrospective treatment. The Company has applied the following transitional exceptions and exemptions to full retrospective application of IFRS in its preparation of an opening IFRS consolidated statement of financial position at July 1, 2010 (the Company's "Transition Date"): /T/ -- To apply IFRS 2, "Share-based Payments", retrospectively only to awards that were issued after November 7, 2002 and where any portion of said awards had not vested by the Transition Date; and -- To apply IFRS 3, "Business Combinations", prospectively from the Transition Date and, therefore, not restate business combinations that took place prior to the Transition Date. As such, Canadian GAAP balances relating to business combinations entered into before the Transition Date, including acquired intangible assets, have been carried forward without adjustment. /T/ The following provides a reconciliation of the Company's working capital under IFRS and under the previous Canadian GAAP /T/ 30-Sep-11 30-Jun-11 01-Jul-11 ------------------------------------------ Current Assets - IFRS 10,073,048 12,501,790 16,478,255 Add back deferred contract costs 4,588,704 4,469,066 5,793,180 Add back deferred income taxes 539,701 546,252 721,975 ------------------------------------------ Current Assets - Canadian GAAP 15,201,453 17,517,108 22,993,410 Current Liabilities - IFRS and Canadian GAAP - 12,053,210 - 13,502,342 - 18,740,864 ------------------------------------------ Working Capital - Canadian GAAP 3,148,243 4,014,766 4,252,546 ------------------------------------------ ------------------------------------------ Reconciliation of Statement of Financial Position at July 1, 2010 IFRS Canadian Reclassifi- Notes GAAP cations IFRS -------------------------------------------------- ASSETS Current Assets Cash and cash equivalents 1,738,036 1,738,036 Investment in Equus 2,203,043 2,203,043 Accounts receivable 10,580,706 10,580,706 Current portion of deferred contract costs (a) 5,793,180 (5,793,180) - Prepaid expenses 236,993 236,993 Inventory 1,719,477 1,719,477 Future income tax benefits (b) 721,975 (721,975) - ------------------------------------------ 22,993,410 (6,515,155) 16,478,255 Long-term accounts receivable 265,612 265,612 Deferred contract costs (a) 598,366 (598,366) - Capital Assets 519,391 519,391 Intangible assets (a) 459 6,391,546 6,392,005 Future income tax benefits (b) 6,243,875 721,975 6,965,850 Goodwill 9,914,350 9,914,350 ------------------------------------------ 40,535,463 - 40,535,463 ------------------------------------------ ------------------------------------------ LIABILITIES Current Liabilities Line of credit 1,353,312 1,353,312 Accounts payable and accrued liabilities 9,955,342 9,955,342 Current portion of deferred revenue 7,432,210 7,432,210 -------------- -------------- 18,740,864 18,740,864 Deferred Revenue 710,269 710,269 -------------- -------------- 19,451,133 19,451,133 SHAREHOLDERS' EQUITY Share Capital 54,433,709 54,433,709 Warrants (c) 186,367 186,367 Contributed surplus (d) 4,231,539 4,231,539 Deficit (36,965,836) (36,965,836) Accumulated other comprehensive loss (801,449) (801,449) -------------- -------------- 21,084,330 21,084,330 40,535,463 40,535,463 -------------- -------------- -------------- -------------- Reconciliation of Statement of Financial Position at June 30, 2011 IFRS Canadian Reclassifi- Notes GAAP cations IFRS -------------------------------------------------- ASSETS Current Assets Cash and cash equivalents $ 978,656 $ 978,656 Investment in Equus 2,311,109 2,311,109 Accounts receivable 7,134,328 7,134,328 Current portion of deferred contract costs (a) 4,469,066 (4,469,066) - Prepaid expenses 228,062 228,062 Inventory 1,849,635 1,849,635 Future income tax benefits (b) 546,252 (546,252) - ------------------------------------------ 17,517,108 (5,015,318) 12,501,790 Long-term accounts receivable 401,742 401,742 Deferred contract costs (a) 579,710 (579,710) - Capital Assets 270,437 270,437 Intangible assets (a) - 5,048,776 5,048,776 Future income tax benefits (b) 6,454,904 546,252 7,001,156 Goodwill 9,914,350 9,914,350 ------------------------------------------ 35,138,251 - 35,138,251 ------------------------------------------ ------------------------------------------ LIABILITIES Current Liabilities Line of credit 1,007,767 1,007,767 Accounts payable and accrued liabilities 6,823,643 6,823,643 Current portion of deferred revenue 5,670,932 5,670,932 ---------------- -------------- 13,502,342 13,502,342 Deferred Revenue 649,267 649,267 ---------------- -------------- 14,151,609 14,151,609 SHAREHOLDERS' EQUITY Share Capital 54,433,709 54,433,709 Warrants (c) 42,000 42,000 Contributed surplus (d) 4,578,470 4,578,470 Deficit (37,064,598) (37,064,598) Accumulated other comprehensive loss (1,002,939) (1,002,939) ---------------- -------------- 20,986,642 20,986,642 35,138,251 35,138,251 -------------- -------------- -------------- -------------- /T/ Explanatory Notes: (a) Intangible assets. Under Canadian GAAP, the Company deferred and amortized deferred contract costs, consisting of third party maintenance costs and deferred sales commissions. These costs were split into their current and long-term portions on the statement of financial position as deferred contract costs. Under IFRS, these costs continue to be deferred; however, they are now presented as a portion of intangible assets. On the Transition Date, $5,793,180 was reclassified from current deferred contract costs and $598,366 was reclassified from long-term deferred contract costs to intangible assets. Amortization of those assets remained the same under IFRS as it was under Canadian GAAP. (b) Deferred income taxes. Under Canadian GAAP, deferred income taxes (future income taxes) were classified as current or long term based on the underlying classification of the item in the statement of financial position on which it was calculated. Under IFRS, deferred income taxes are all long-term. At the Transition Date, the Company reclassified $721,975 from current to long-term deferred tax assets. (c) Warrants. Under Canadian GAAP the Warrants were valued at the time that they were issued. IFRS requires that these be revalued at the end of each reporting period. On the Transition Date, the change was not material so no adjustment was made. (d) Share-based compensation. Under Canadian GAAP, each stock option grant was treated as a single arrangement and compensation expense was determined at the time of grant and amortized over the vesting period, generally 48 months, on a straight-line basis. IFRS requires a separate calculation of compensation expense for awards that vest in instalments. Under Canadian GAAP, forfeitures of the share-based compensation awards could be accounted for in the period in which the forfeitures occurred. Under IFRS, compensation expense differs from Canadian GAAP based on the changing fair values used for each instalment, the application of the forfeiture rate and the timing of recognizing compensation expense. Generally, this results in accelerated expense recognition under IFRS. On the Transition Date, the amount of the additional compensation expense was not material so no adjustment was made. Highlights of the First quarter Highlights of the Company's operations for the quarter included: /T/ -- Revenue for the three months ended September 30, 2011 was $9,039,212 compared to $9,219,050 for the same quarter last year, a decrease of $179,838; -- The cash flow used in operations amounted to $51,134 for the three months ended September 30, 2011 compared to cash flow generated from operations of $150,269 for the same period last year; -- The research and development expense for the quarter amounted to $244,110 compared to $192,268 for the same quarter last year; -- In order to save costs, the Company relocated to a smaller facility in Mechanicsburg, PA incurring a one-time cost of $65,040. This move will lead to a reduction in premise costs of approximately $200,000 per annum; -- Deferred revenue at September 30, 2011 was $6,047,097 (of which $5,449,475 is expected to be recognized in the next four quarters) compared to $6,320,199 at June 30, 2011; -- The Investment in Equus consists of 962,962 shares of Equus Total Return, Inc. which is a public company trading on the NYSE under the symbol EQS; and -- The Company generated revenue of $1,234,534 from American Eagle, $672,263 from Motorola, $530,643 from Comcast, $400,701 from Thermo Fisher, $399,989 from Eastman Kodak, and $304,193 from a school district. /T/ Review of the first quarter Revenue for the three months ended September 30, 2011 was $9,039,212 compared to $9,219,050 for the same quarter last year, a decrease of $179,838. During the current quarter the Company generated revenue of $1,234,534 from American Eagle, $672,263 from Motorola, $530,643 from Comcast, $400,701 from Thermo Fisher, $399,989 from Eastman Kodak, and $304,193 from a school district. The Company also had repeat business from its existing customer base consisting of various retailers, universities and government organizations. The EBITDA loss for the quarter was $440,084 compared to an EBITDA loss of $10,459 for the same quarter last year. During the quarter the Company had a deferred income tax benefit of $135,160 compared to a deferred income tax benefit of $8,271 for the same quarter last year. The Net Loss for the quarter amounted to $359,911 ($0.00 per share) compared to a Net Loss of $89,314 ($0.01 per share) for the same period last year. Cost of sales Cost of sales for the quarter amounted to $7,248,834 resulting in a gross profit of $1,790,378 or 19.8% of sales as compared to $7,115,223 resulting in a gross profit of $2,103,827 or 22.8% of sales for the same quarter last year. The lower gross profit was due to several larger orders with lower margins. At September 30, 2011 the Company had an inventory provision of $173,508 (June 30, 2011 - $168,364). General and administrative General and administrative expenses for the quarter amounted to $961,127 compared to $890,450 for the same quarter last year. The increase of $70,677 relates to the moving costs of $65,040 that were incurred during the quarter for the move of the premises in Mechanicsburg, PA. As a percentage of sales the general and administrative expenses were 10.6% in the quarter compared to 9.7% in the same quarter last year. Technology Investment Over the past ten years the Company has made a significant investment in the form of expenses to advance the abilities of its technology and resulting service offering. This investment does not contribute directly to revenues during the period that the research and development expenses are incurred. Research and development expense for the quarter amounted to $244,110 compared to $192,268 for the same quarter last year. The significant expense item in this category is salary and benefit costs. As a percentage of sales the research and development expenses are 2.7% in the quarter compared to 2.1% in the same quarter last year. During the current quarter the Company's technology investment related to enhanced product functionality and requirements from various partners: For the Mobiquity Route(TM) these included the following: /T/ -- Developing return tracking, which allows users to record totes and quantity of boxes for credit transactions on pick up items; -- Improving the management console; -- Improving the mobile application; and -- Developing a Bluetooth wand scanner to allow the device to be used with the route accounting software. /T/ For Self-service, these included the following: /T/ -- Developing a new operating system for the Versatile Self-Service platform providing improved performance, stability and hardware/application support; -- Developing enhanced text formatting and font control, localized content and security controls for the Versatile Smart Sign interactive digital signage platform; and -- Improving video performance and stability for the Versatile Smart Sign platform. /T/ For the Mobiquity Transaction Engine 3.0(TM) these included the following: /T/ -- Implementing a more flexible reporting engine that allows users to quickly create and customize reports; -- Enhancing the audit of data capture and display and providing instant feedback to authorized users of changes to data; and -- Implementing additional alert capture functionality to meet specific requirements from security departments. /T/ During the current period, the Company incurred $129,294 for research and development activities related to Mobiquity Route(TM) and related mobile software products. During the current period, the Company incurred $72,362 for research and development activities related to Mobiquity Transaction Engine 3.0(TM), Mobiquity Kiosk(TM) and Autostore. Selling and marketing expenses Selling and marketing expense for the quarter amounted to $1,019,931 compared to $1,008,567 for the same quarter last year, an increase of $11,364. Selling and marketing expenses includes salaries, commissions, advertising, trade shows and promotion costs to support the various sales initiatives. As a percentage of sales the selling and marketing expenses are 11.2% in the quarter compared to 10.9% in the same quarter last year. There were no significant changes in the selling and marketing activities during the quarter. Deferred Income Tax Assets For the three months ended September 30, 2011 the Company recorded a deferred income tax benefit of $135,160 compared to a deferred income tax benefit of $8,271 for the same quarter last year. In accordance with IFRS all of the deferred income tax assets have been classified as long term. Amortization The amortization of capital assets for the quarter amounted to $52,509 (2010 - $74,252), which includes $4,090 of amortization classified with the cost of sales for Kiosks deployed pursuant to various subscription agreements. Foreign Exchange Loss The foreign exchange loss for the quarter amounted to $824 compared to a foreign exchange loss of $2,333 for the same quarter last year. The loss was primarily due to the fluctuation in the U.S. dollar against the Canadian dollar in the quarter. Summary of Quarterly Results The table below provides a summary of certain selected unaudited financial information from the Consolidated Statements of Operations for the most recent eight fiscal quarters comprising the Company's preceding two years: /T/ Q2 2010 Q3 2010 Q4 2010 Q1 2011 Dec 09 Mar 10 Jun 10 Sept 10 -------------------------------------------------- Revenue 11,259,292 9,795,481 11,517,023 9,219,050 Cost of Sales 8,599,212 7,493,702 9,097,685 7,115,223 -------------------------------------------------- Gross Profit 2,660,080 2,301,779 2,419,338 2,103,827 -------------------------------------------------- Expenses: General and administrative (including foreign exchange) 1,010,991 1,007,964 1,141,838 892,783 Non recurring expenses 28,219 525,656 (214,924) 20,668 Research and Development 247,084 185,289 177,744 192,268 Selling and Marketing 1,619,075 1,490,778 1,497,988 1,008,567 Stock-based compensation 23,242 23,585 23,887 - -------------------------------------------------- 2,928,611 3,233,272 2,626,533 2,114,286 -------------------------------------------------- Earnings (loss) before interest taxes and amortization (268,531) (931,493) (207,195) (10,459) Amortization (152,962) (152,631) (128,065) (71,161) Interest (10,441) (7,781) (10,248) (14,970) Goodwill impairment - - (63,309) - Gain (loss) on sale 4,952 - - - Income taxes 346,321 275,055 116,482 7,276 -------------------------------------------------- Net Earnings (loss) (80,661) (816,850) (292,335) (89,314) -------------------------------------------------- -------------------------------------------------- Per share, basic and diluted (0.00) (0.01) (0.00) (0.00) -------------------------------------------------- Q2 2011 Q3 2011 Q4 2011 Q1 2012 Dec 10 Mar 11 Jun 11 Sept 11 -------------------------------------------------- Revenue 15,460,033 11,044,100 10,180,289 9,039,212 Cost of Sales 12,491,896 8,368,414 7,798,561 7,248,834 -------------------------------------------------- Gross Profit 2,968,137 2,675,686 2,381,728 1,790,378 -------------------------------------------------- Expenses: General and administrative (including foreign exchange) 1,018,146 851,603 938,841 961,951 Non recurring expenses 37,503 235,486 199,293 - Research and Development 278,909 278,226 210,996 244,110 Selling and Marketing 1,327,878 1,136,728 1,186,724 1,019,931 Stock-based compensation - 60,906 141,658 4,470 -------------------------------------------------- 2,662,436 2,562,949 2,677,512 2,230,462 -------------------------------------------------- Earnings (loss) before interest taxes and amortization 305,701 112,737 (295,784) (440,084) Amortization (48,108) (54,485) (51,473) (48,419) Interest (666) 1,826 (2,616) (5,223) Goodwill impairment - - - - Gain (loss) on sale (2,575) (625) (1,410) - Income taxes (75,387) (26,615) 130,032 133,815 -------------------------------------------------- Net Earnings (loss) 178,965 32,838 (221,251) (359,911) -------------------------------------------------- -------------------------------------------------- Per share, basic and diluted 0.00 0.00 (0.00) (0.00) -------------------------------------------------- /T/ The Company's revenues and earnings fluctuate from quarter to quarter. A number of factors can cause such fluctuations, including the timing of substantial orders, the timing of releases of new products, timing of the deployment of solutions and delays by customers. Because the Company's operating expenses are determined based on anticipated sales, are generally fixed and are incurred throughout each fiscal quarter, any of the factors listed above can cause significant variations in the Company's revenues and earnings in any given quarter. Thus, the Company's quarterly results are not necessarily indicative of the Company's overall business, results of operations and financial condition. Over the past three years the Company has improved its financial position while maintaining selling, marketing, general and administration expenses at relatively the same level as revenue. Financial position Cash and cash equivalents at September 30, 2011 was $563,999 compared to $978,656 at June 30, 2011. As at September 30, 2011 the Company had a credit line facility of $4,500,000, which was limited to 80% of eligible accounts receivable of the Company's subsidiary Versatile Systems, Inc. from a U.S. based financial institution. The line of credit bears interest at the prime rate of lending as published in the Wall Street Journal plus one-half percent and is secured with a first charge on the assets of Versatile Systems, Inc. At September 30, 2011 the amount drawn on the line of credit was $724,981, a decrease of $282,786 from the amount drawn at June 30, 2011 of $1,007,767. The amount that may be advanced under the credit line is limited to 80% of eligible accounts receivable of VSI less than 90 days from the invoice date. At September 30, 2011 this amounted to $3,548,623. The cash flow used in operations amounted to $51,134 for the three months ended September 30, 2011 compared to cash flow generated from operations of $150,269 for the same period last year. Investment in Equus The Investment in Equus is held by the Company's wholly owned subsidiary, Mobiquity Investments Limited ("Mobiquity") and consists of 962,962 shares of Equus Total Return, Inc. which is a public company trading on the NYSE under the symbol EQS (the "Fund"). The share price as at September 30, 2011 was $1.88 so the unrealized loss for the quarter was $500,748 and the cumulative unrealized loss was $1,211,900. The Company believes that the cumulative unrealized loss is temporary and is not a permanent impairment in the value of the Investment. On August 13, 2010 Equus released its results for the second quarter of the 2010 fiscal year. The net asset value of Equus at June 30, 2010 was $4.28 per share. On November 11, 2010 Equus released its results for the third quarter of the 2010 fiscal year. The net asset value of Equus at September 30, 2010 was $3.55 per share. Between November 24, 2010 and December 21, 2010 Mobiquity purchased an additional 140,931 shares of Equus at a cost of $309,556. On March 18, 2011 Equus released its results as at and for the year ended December 31, 2010. The net asset value of Equus at December 31, 2010 was $4.29 per share. On June 2, 2011, Equus appointed Alessandro Benedetti the Fund's Executive Chairman and John Hardy the Chief Executive Officer. On August 15, 2011 Equus released its results for the second quarter of the 2011 fiscal year. The net asset value of Equus at June 30, 2011 was $3.92 per share. On November 14, 2011 Equus released its results for the third quarter of the 2011 fiscal year. The net asset value of Equus at September 30, 2011 was $3.69 per share. Capital Expenditures During the three months ended September 30, 2011 the additions to capital assets amounted to $7,209 (2010 - $39,825). The decrease in the capital expenditures relate to the decline in the Kiosks that have been deployed under subscription agreements. Share Capital As of December 13, 2011 the Company had 157,285,643 common shares issued and outstanding. Stock Options The Company can grant up to 15,728,564 of the issued shares pursuant to its stock option plan. /T/ Weighted Number of average exercise shares price CDN$ -------------------------------------------------------------------------- Outstanding - June 30, 2011 10,948,100 0.12 Granted - Forfeited - Expired - -------------------------------- Outstanding - September 30, 2011 10,948,100 0.12 -------------------------------- /T/ For the three months ended September 30, 2011 there was no activity with stock options. Warrants The Company has 600,000 issued and outstanding warrants at September 30, 2011 with an exercise price of CDN $0.30, which expire on January 22, 2012. Off Balance Sheet Arrangements The Company has not entered into any off balance sheet arrangements other than standard office lease arrangements. Related Party Transactions During the current quarter, the Company paid consulting fees and salaries, which are included in the general and administration expense, of $153,284 to three Directors and Officers of the Company (2010 - $242,364 was paid to four Directors and Officers of the Company). Risk Factors The securities of the Company should be considered a highly speculative investment and investors should carefully consider all of the information disclosed in this Management Discussion & Analysis prior to making an investment in the Company. In addition to the other information presented in this Management Discussion & Analysis, the following risk factors should be given special consideration when evaluating an investment in the Company's securities. Operating History The Company's predecessor company commenced operations in March 1987 to distribute and sell Maximizer products in European countries, as well as provide consulting services and Customer Relationship Management ("CRM") solutions to companies. In January 1997, the Company changed its focus to research and development of CRM software. The Company purchased Versatile Mobile Systems on September 19, 2000, Perfect Order, Inc. and Versatile Systems, Inc. on April 26, 2005 and Sagent Solutions on December 28, 2007. The Company may face many of the risks and uncertainties encountered by early-stage companies in rapidly evolving markets. History of Losses The Company had a history of losses up to September 30, 2005 and since that time has had varying results, but has an accumulated deficit of $37,424,509 to September 30, 2011. Although the Company has decreased its operating expenses the Company cannot be assured that it can consistently maintain profitable operations. No Certainty of Future Profitability The Company's product revenues are not predictable with any significant degree of certainty and future product revenues may differ from historical patterns. If customers cancel or delay orders, it can have a material adverse impact on the Company's revenues and results of operations from quarter to quarter. Because the Company's results of operations may fluctuate from quarter to quarter, investors should not assume that results of operations in future periods can be predicted based on results of operations in past periods. Even though the Company's revenues are difficult to predict, the Company's expense levels are based in part on future revenue projections. Many of the Company's expenses are fixed and, accordingly, the Company cannot quickly reduce spending if revenues are lower than expected. Competitive Market The market for the Company's software is intensely competitive, fragmented and rapidly changing. Some of the Company's actual and potential competitors are larger, established companies that have greater technical, financial and marketing resources. In addition, as the Company develops new products, particularly applications focused on electronic commerce or specific industries, it may begin competing with companies with whom it has not previously competed. It is also possible that new competitors will enter the market or that the Company's competitors will form alliances that may enable them to rapidly increase market share. Increased competition may result in price reductions, lower gross margins or loss of the Company's market share, any of which could materially adversely affect its business, financial condition and operating results. Technological Change The market for the Company's solutions is characterized by rapidly changing technology and evolving industry standards. The market is affected by changes in end user requirements and frequent new product introductions and enhancements. The Company's products embody complex technology and may not always be compatible with current and evolving technical standards and products, developed by others. Failure or delays by the Company to meet or comply with the requisite and evolving industry or user standards could have a material adverse effect on the Company's business, results of operations and financial condition. The Company's ability to anticipate changes in technology, technical standards and product offerings will be a significant factor in the Company's ability to compete. There can be no assurance that the Company will be successful in identifying, developing, manufacturing and marketing products that will respond to technological change, evolving standards or individual wireless communications service provider standards or requirements. The Company's business will be adversely affected if the Company incurs delays in developing new products or enhancements or if such products or enhancements do not gain market acceptance. In addition, there can be no assurance that products or technologies developed by others will not render the Company's products or technologies non-competitive or obsolete. Limited Sales and Support Infrastructure The Company's future revenue growth will depend in large part on its ability to successfully expand its direct sales force and its customer support capability. The Company may not be able to successfully manage the expansion of these functions or to recruit and train additional direct sales, consulting and customer support personnel. If the Company is unable to hire and retain additional highly skilled direct sales personnel, it may not be able to increase its license revenue to the extent necessary to achieve profitability. If the Company is unable to hire highly trained consulting and customer support personnel, it may be unable to meet customer demands. The Company is unlikely to be able to increase its revenues as planned if it fails to expand its direct sales force or its consulting and customer support staff. Even if the Company is successful in expanding its direct sales force and customer support capability, the expansion may not result in revenue growth. Dependence on Business Alliances A key element of the Company's business strategy is the formation of corporate alliances with leading companies. The Company is currently investing and plans to continue to invest significant resources to develop these relationships. The Company believes that its success in penetrating new markets for its products will depend in part on its ability to maintain these relationships and to cultivate additional or alternative relationships. There can be no assurance that the Company will be able to develop additional corporate alliances with such companies, that existing relationships will continue or be successful in achieving their purposes or that such companies will not form competing arrangements. Dependence on Key Personnel The Company's success depends largely upon the continued service of its executive officers and other key management, sales and marketing and technical personnel. The loss of the services of one or more of the Company's executive officers or other key employees could have a material adverse effect on its business, results of operations or financial condition. The Company's future success also depends on its ability to attract and retain highly qualified personnel. The competition for qualified personnel in the computer software and Internet markets is intense, and the Company may be unable to attract or retain highly qualified personnel in the future. In addition, due to intense competition for qualified employees, it may be necessary for the Company to increase the level of compensation paid to existing and new employees to the degree that operating expenses could be materially increased. Management of Growth The Company expects to experience a period of significant growth in the number of personnel that will place a strain upon its management systems and resources. The Company's future will depend in part on the ability of its officers and other key employees to implement and improve its financial and management controls, reporting systems and procedures on a timely basis and to expand, train and manage its employee workforce. There can be no assurance that the Company will be able to effectively manage such growth. The Company's failure to do so could have a material adverse effect upon the Company's business, prospects, results of operation and financial condition. Integration of Newly Acquired Businesses or Technology The Company may expand its operations through acquisitions of additional businesses or technology. There can be no assurance that the Company will be able to identify, acquire or profitably manage additional businesses or technology or successfully integrate acquired businesses or technology into the Company without substantial expense, delay or other operational or financial problems. Further, acquisitions may involve a number of additional risks, including diversion of management's attention, failure to retain key acquired personnel, unanticipated events or circumstances, legal liabilities and amortization of acquired intangible assets, some or all of which could have a material adverse effect on the Company's business, financial condition and results of operation. In addition, there can be no assurance that acquired businesses, if any, will achieve anticipated revenues and earnings. The failure of the Company to manage its acquisition strategy successfully could have a material adverse effect on the Company's business, financial condition and results of operation. Potential Fluctuations in Quarterly Financial Results The Company's quarterly financial results may be affected by the timing of new releases of its products and/or substantial customer orders. The Company's operating expenses are based on anticipated revenue levels in the short term, are relatively fixed, and are incurred throughout the quarter. As a result, if expected revenues are not realized on a timely basis as anticipated, the Company's financial results could be materially and adversely affected. These or other factors, including possible delays in the shipment of new products, may influence quarterly financial results in the future. Accordingly, there may be significant variation in the Company's quarterly financial results. International Sales Sales outside of the United States currently represent less than 10% of the Company's total gross revenues. The Company believes that its continued growth and profitability will require additional expansion of its sales in international markets. To the extent that the Company is unable to expand international sales in a timely and cost effective manner, the Company's business, results of operations and financial condition could be materially and adversely affected. In addition, even with the successful recruitment of additional personnel and international resellers, there can be no assurance that the Company will be successful in maintaining or increasing international market demand for the Company's products. Currency Exchange Rate Risk The Company's results have been stated in U.S. dollars as a substantial portion of the Company's revenues and a material portion of its expenses are denominated in US dollars. Dependence on Proprietary Technology and Limited Patent and Trademark Protection The Company relies on a combination of copyright and trademark laws, trade secret, confidentiality procedures and contractual provisions to protect its proprietary rights. Unauthorized parties may attempt to copy aspects of the Company's products or obtain and use information that the Company regards as proprietary. Policing unauthorized use of the Company's product is difficult, time- consuming and costly as is the pursuing of patents in each jurisdiction in which the Company carries on business. Although the Company is unable to determine the extent to which piracy of its software product exists, software piracy is a possibility. In addition, the laws of certain countries in which the Company's products may be licensed do not protect its product and intellectual property rights to the same extent as the laws do in Canada or the United States. There is no assurance that the Company's means of protecting its proprietary rights will be adequate or the Company's competitors will not independently develop similar technology, the effect of either of which may be materially adverse to the Company's business, results of operations and financial condition. Risk of Third Party Claims for Infringement The Company is not aware that its product infringes the proprietary rights of third parties. There can be no assurance, however, that third parties will not claim such infringement by the Company or its licensees with respect to current or future products. The Company expects that software product developers will increasingly be subject to such claims as the number of products and competitors in the Company's industry segment grows and the functionality of products in different industry segments overlaps. Any such claims, with or without merit, could be time-consuming, result in costly litigation, cause product shipment delays or require the Company to enter into royalty or licensing agreements which, if required, may not be available on terms acceptable to the Company. Any of the foregoing could have a materially adverse effect on the Company's business, results of operations and financial condition. Lengthy Sales and Implementation Cycle The adoption of the Company's product generally involves a significant commitment of resources by potential customers. As a result, the Company's sales process is often subject to delays associated with lengthy approval processes by potential customers. For these and other reasons, the sales cycle associated with the license of the Company's product varies substantially from customer to customer and typically lasts between 6 to 12 months during which time the Company may devote significant time and resources to a prospective customer, including costs associated with multiple site visits, product demonstrations and feasibility studies, and experience a number of significant delays over which the Company has no control. Any significant or ongoing failure by the Company to ultimately achieve such sales could have a material adverse effect on the Company's business, results of operations and financial condition. In addition, following license sales, the implementation period is expected to involve a time period for customer training and integration with the customer's existing systems. A successful implementation program requires a close working relationship between the Company, the customer and, generally, third party consultants and system integrators who assist in the process. There can be no assurance that delays or difficulties in the implementation process for any given customer will not have a material adverse effect on the Company's business, results of operations and financial condition. Risk of System Defects System development involves the integration of the Company's proprietary software and software of others into the customer's operating systems. There can be no assurance that defects and errors will not be found in the Company's product when integrated with other products or systems. Any such defects and errors could result in adverse customer reactions, negative publicity regarding the Company and its product or damages. Consequently, there could be a material adverse effect on the Company's business, results of operations and financial condition. Requirements for New Capital As a growing business, the Company typically needs more capital than it has available to it or can expect to generate through the sale of its products. In the past, the Company has had to raise, by way of debt and equity financing, considerable funds to meet its capital needs. There is no guarantee that the Company will be able to continue to raise funds needed for its business. Failure to raise the necessary funds in a timely fashion will limit the Company's growth. Critical Accounting Estimates General Unless otherwise specified in the discussion of the specific critical accounting estimates, the Company is not aware of trends, commitments, events, or uncertainties that it reasonably expects to materially affect the methodology or assumptions associated with the critical accounting estimates, subject to the circumstances identified above. Changes are made to assumptions underlying all critical accounting estimates to reflect current economic conditions and updating of historical information used to develop the assumptions, where applicable. Unless otherwise specified in the discussion of the specific critical accounting estimates, it is expected that no material changes in overall financial performance and financial statement line items would arise either from reasonably likely changes in material assumptions underlying the estimate or within a valid range of estimates, from which the recorded estimate was selected. All critical accounting estimates are uncertain at the time of making the estimate. Accounts Receivable Allowance for doubtful accounts The Company considers the business area that gives rise to the accounts receivable, maintains procedures for granting credit terms on sales transactions and performs specific account identification when determining its allowance for doubtful accounts. This accounting estimate is in respect of the accounts receivable line item on the Company's consolidated balance sheet comprising approximately 18% of total assets as at September 30, 2011. In the event the future results were to adversely differ from management's best estimate of the allowance for doubtful accounts, the Company could experience a bad debt charge in the future. Such a bad debt charge would not result in a cash outflow. The estimate of the Company's allowance for doubtful accounts could materially change from period to period due to the allowance being a function of the balance and composition of accounts receivable, which can vary on a month-to-month basis. The variance in the balance of accounts receivable can arise from a variance in the amount and composition of operating revenues and from variances in accounts receivable collection performance. Inventories Provision for inventory obsolescence The Company determines its provision for inventory obsolescence based upon historical experience, expected inventory turnover, inventory aging and current condition, and current and future expectations with respect to product offerings. Assumptions underlying the provision for inventory obsolescence include the activity levels over previous fiscal years, and the expected inventory requirements and inventory composition necessary to support these future sales and offerings. The estimate of the Company's provision for inventory obsolescence could materially change from period to period due to changes in product offerings and consumer acceptance of those products. This accounting estimate is in respect of the inventory line item on the Company's consolidated balance sheet comprising approximately 6% of total assets as at September 30, 2011. If the provision for inventory obsolescence was inadequate, the Company could experience a charge to direct cost of sales in the future. Such an inventory obsolescence charge would not result in a cash outflow. Long-Lived Assets The accounting estimates for long-lived assets that include capital assets, deferred service contracts, purchased technology, intellectual property, customer contracts and licenses, in aggregate, represent approximately 16% of the Company's total assets as at September 30, 2011, presented in its consolidated balance sheet. If the Company's estimated useful lives of assets were different as a result of changes in facts and circumstances, the Company could experience increased or decreased charges for amortization and the Company could potentially experience future material impairment charges in respect of its recovery of long-lived assets. The estimated useful lives of capital assets are determined by a continuing program of asset life studies. The recoverability of capital assets is significantly impacted by the estimated useful lives. Assumptions underlying the estimated useful lives of capital assets include timing of technological obsolescence, competitive pressures and future infrastructure utilization plans. In the event management's best estimate of the useful lives of capital assets was adversely affected, the Company could potentially experience a charge to amortization expense in the future. Such a charge to amortization would not result in a cash outflow. The purchased technology, intellectual property, customer contracts and licenses were fully amortized in the 2010 fiscal year. Deferred Income Tax Benefits The amount recorded for Deferred Income Tax Assets represents approximately 22% of the Company's assets as at September 30, 2011, presented in its consolidated financial position. If the Company determines that the valuation allowances relating to the loss carry forwards and tax deductions should be increased, the Company could experience a reduction in the recorded future income tax benefits. The Company determined that because VSI, POI, VAC and VMS-US were expected to generate sufficient profits that it was probable that the losses would be fully utilized and the deductions attributable to these companies would be fully utilized. Consequently, there is no valuation allowance for these companies. The difference between the value of these tax benefits less the valuation allowance is the amount of the deferred income tax asset that is recorded by the Company. Goodwill The accounting estimates for goodwill represents approximately 30% of the Company's total assets as at September 30, 2011, presented in its consolidated balance sheet. If the future were to adversely differ from management's best estimate to recover the Company's investments in its goodwill, the Company could potentially experience future material impairment losses in respect of its goodwill. The impairment losses would be recognized and presented as a separate line item in the consolidated statements of loss and deficit. Impairment losses to goodwill would not result in a cash outflow. Changes in accounting policies Adoption of future accounting standards: The IASB has issued the following standards, which have not yet been adopted by the Company. Each of the new standards is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company has not yet begun the process of assessing the impact that the new and amended standards will have on its interim consolidated financial statements or whether to early adopt any of the new requirements. The following is a description of the new standards: IFRS 9 - "Financial Instruments" ("IFRS 9") IFRS 9 was issued in November 2009 and contained requirements for financial assets. This standard addresses classification and measurement of financial assets and replaces the multiple category and measurement models in IAS 39 Financial Instruments - Recognition and measurement for debt instruments, with a new mixed measurement model having only two categories: amortized cost and fair value through profit or loss. IFRS 9 also replaces the models for measuring equity instruments and such instruments are either recognized at fair value through profit or loss or at fair value through other comprehensive income (loss). Where such equity instruments are measured at fair value through other comprehensive income (loss), dividends are recognized in profit or loss to the extent not clearly representing a return of investment; however, other gains and losses (including impairments) associated with such instruments remain in accumulated comprehensive income (loss) indefinitely. Requirements for financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS 39, except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income (loss). The Company has not yet assessed the impact of the adoption of IFRS 9 on its results from operations or its financial position. IFRS 10 - "Consolidation" ("IFRS 10") IFRS 10 requires an entity to consolidate an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Under existing IFRS, consolidation is required when an entity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. IFRS 10 replaces SIC-12 "Consolidation-Special Purpose Entities" and parts of IAS 27, "Consolidated and Separate Financial Statements". The Company does not believe the adoption of IFRS 10 will materially affect its results from operations or its financial position. IFRS 11 - "Joint Arrangements" ("IFRS 11") IFRS 11 requires a venture to classify its interest in a joint arrangement as a joint venture or joint operation. Joint ventures will be accounted for using the equity method of accounting, whereas for a joint operation, the venture will recognize its share of the assets, liabilities, revenue and expenses of the joint operation. Under existing IFRS, entities have the choice to proportionately consolidate or equity account for interests in joint ventures. IFRS 11 supersedes IAS 31, "Interests in Joint Ventures", and SIC-13, "Jointly Controlled Entities-Non-monetary Contributions by Ventures". The Company does not believe the adoption of IFRS 10 will materially affect its results from operations or its financial position. IFRS 12 - "Disclosure of Interests in Other Entities" ("IFRS 12") IFRS 12 establishes disclosure requirements for interests in other entities, such as joint arrangements, associates, special purpose vehicles and off-balance sheet vehicles. The standard carries forward existing disclosures and also introduces significant additional disclosure requirements that address the nature of, and risks associated with, an entity's interests in other entities. The Company does not believe the adoption of IFRS 10 will materially affect its results from operations or its financial position. IFRS 13 - "Fair Value Measurement" ("IFRS 13") IFRS 13 is a comprehensive standard for fair value measurement and disclosure requirements for use across all IFRS. The new standard clarifies that fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. It also establishes disclosures about fair value measurement. Under existing IFRS, guidance on measuring and disclosing fair value is dispersed among the specific standards requiring fair value measurements and, in many cases, does not reflect a clear measurement basis or consistent disclosures. The Company has not yet assessed the impact of the adoption of IFRS 13 on its results from operations or its financial position. Additional information relating to the Company can be found on the Canadian Securities Administrators System for Electronic Document Analysis and Retrieval (SEDAR), located at www.sedar.com. -30- FOR FURTHER INFORMATION PLEASE CONTACT: Versatile Systems Inc. John Hardy Chairman and CEO 1-800-262-1633 International: 001-206-979-6760 OR Versatile Systems Inc. Fraser Atkinson CFO 1-800-262-1633 www.versatile.com OR Daniel Stewart & Company plc (Nominated Adviser & Broker) Noelle Greenaway, Paul Shackleton +44 (0) 207 776 6550 The TSX Venture Exchange and the AIM market of the London Stock Exchange have not reviewed and do not accept responsibility for the adequacy or accuracy of this release. Versatile Systems Inc. More |
||
| 18-11-11 | RNS |
|
|
FOR: VERSATILE SYSTEMS INC. TSX VENTURE SYMBOL: VV AIM SYMBOL: VVS November 17, 2011 Versatile Announces Results of Annual General Meeting VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 17, 2011) - Versatile Systems Inc. (TSX VENTURE:VV)(AIM:VVS) today announces the results of its annual general meeting, which was held earlier today. The shareholders elected John Hardy, Alessandro Benedetti, Malcolm Clay, Fraser Atkinson, Kais Laouiti and Bertrand des Pallieres as directors of the Company. The shareholders also approved the stock option plan and appointed Deloitte & Touche LLP as the Company's auditors for the ensuing fiscal year. At the Meeting, the resolution approving the AIM Delisting was approved by 99.6% of the votes cast by Shareholders present in person or represented by proxy. It is expected that cancellation of the admission of the Common Shares to trading on the AIM market of the London Stock Exchange will be at 7AM (London time) on January 3, 2012 so December 30, 2011 will be the last day of trading on AIM. About Versatile Versatile provides business solutions that enable companies to improve sales, marketing and distribution of their products. Versatile also provides information technology services for the implementation, maintenance and security of mission-critical computer environments. Versatile has the ability to architect solutions involving both proprietary and third party components. For more information: www.versatile.com. Forward-Looking Statements This document may contain forward-looking statements relating to Versatile's operations or to the environment in which it operates, which are based on Versatile's operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict or are beyond Versatile's control. A number of important factors including those set forth in other public filings could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Versatile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. (C) 2011 Versatile Systems Inc. All rights reserved. -30- FOR FURTHER INFORMATION PLEASE CONTACT: Versatile Systems Inc. John Hardy Chairman and CEO 1-800-262-1633 International: 001-206-979-6760 OR Versatile Systems Inc. Fraser Atkinson CFO 1-800-262-1633 www.versatile.com OR Daniel Stewart & Company plc (Nominated Adviser & Broker) Noelle Greenaway, Paul Shackleton +44 (0) 207 776 6550 The TSX Venture Exchange and the AIM market of the London Stock Exchange have not reviewed and do not accept responsibility for the adequacy or accuracy of this release. Versatile Systems Inc. More |
||
| 25-10-11 | RNS |
|
|
25 October 2011 Versatile Systems Inc. Notice of Annual General and Special Meeting and Publication of Information Circular The Board of Versatile Systems Inc. (the "Company") is pleased to announce that it has today posted the Notice of the Company's Annual General Meeting and Circular, which will be held at 10:00 AM Pacific time on 17 November 2011 at Fasken Martineau DuMoulin LLP located at 2900 - 550 Burrard Street, Vancouver, British Columbia, Canada. The Information Circular has also been posted today to shareholders setting out information on the proposed Resolutions (including a resolution to authorize the Company to apply to the London Stock Exchange for cancellation of admission of the Company's Common shares on the AIM market of the London Stock Exchange) and explaining why the Directors consider each of the resolutions to be in the best interests of the Company and its Shareholders as a whole. A copy of the Notice of the Company's Annual General and Special Meeting and Information Circular is available on the Company's website at: http://www.versatile.com/content/pages/2011_AGM/. FOR FURTHER INFORMATION, PLEASE CONTACT: John Hardy, Chairman and CEO Fraser Atkinson, CFO 1-800-262-1633 1-800-262-1633 International: 001-206-979-6760 Daniel Stewart & Company plc (Nominated Adviser & Broker) Noelle Greenaway, Paul Shackleton +44 (0) 207 776 6550 Versatile Systems Inc. More |
||
| Result Pages: 1 | ||||
| Date/Time | Subject | Author | ||
|---|---|---|---|---|
| 31-05-11 | ||||
|
|
||||
|
|
||||
|
DJ Versatile Systems Auburn University Implements Versatile's SyncSeer(TM) With GuestAssist
TIDMVVS Auburn University Implements Versatile's SyncSeer(TM) With GuestAssist FOR: VERSATILE SYSTEMS INC. TSX VENTURE SYMBOL: VV AIM SYMBOL: VVS May 31, 2011 Auburn University Implements Versatile's SyncSeer(TM) With GuestAssist MECHANICSBURG, PENNSYLVANIA--(Marketwire - May 31, 2011) - Versatile Systems Inc. (TSX VENTURE:VV)(AIM:VVS), today announced that Auburn University Athletics has implemented an integrated solution made up of Versatile's SyncSeer(TM) Venue Management Solution and GuestAssist. Integrating the GuestAssist customer feedback solution with SyncSeer(TM) provides a centralized system to for recording and managing game day incidents. "Bringing multiple data sources together into a single view provides Auburn staff with an incredibly powerful tool," said Lucas Young, Director of Event Management at Auburn University. "SyncSeer(TM) and GuestAssist together will help us to provide our fans with the safest possible game day." SyncSeer(TM) provides real time visibility, interactivity and responsiveness needed to manage incidents and the necessary reporting for large public facilities, like Auburn University, in a safer and more efficient manner. The system delivers a scalable and flexible approach to handle rapidly occurring incidents, while providing a full historical log of what transpired. "Our integration with SyncSeer(TM) has been elegantly implemented," said Jeremy Konko, President of GuestAssist. "The end user's experience and workflow is simplified and enhanced by reducing input and the organization benefits from improved and more accurate data." "Our partnership with GuestAssist continues to be fruitful," said Bob Joyce, President of Versatile Systems. "We believe that there is a large potential customer base in the university sports that would be well served from our integrated solution." About Versatile Versatile provides business solutions that enable companies to improve sales, marketing and distribution of their products. Versatile also provides information technology services for the implementation, maintenance and security of mission-critical computer environments. Versatile has the ability to architect solutions involving both proprietary and third party components. For more information: www.versatile.com. About GuestAssist GuestAssist is an Enterprise Feedback Management platform that gives your customers easy access to you, and gives you a vehicle to engage them. It is text and web-based and allows stadiums, conferences, event managers and hoteliers to talk to their guests via text messages using their own mobile phones. GuestAssist is currently licensed for use at venues across North America such as: /T/ =- Yankee Stadium (New York Yankees) =- Georgia Dome (Atlanta Falcons) =- Lincoln Financial Field (Philadelphia Eagles) =- Cleveland Browns Stadium (Cleveland Browns) =- Heinz Field (Pittsburgh Steelers and University of Pittsburgh) =- M & T Bank Stadium (Baltimore Ravens) =- Giants Stadium (New York Giants and New York Jets) =- FedEx Field (Washington Redskins) =- Ford Field (Detroit Lions) =- MacAfee Coliseum (Oakland Raiders) =- Texas Stadium (Dallas Cowboys) =- Invesco Field (Denver Broncos) =- Ralph Wilson Stadium (Buffalo Bills) =- Gillette Stadium (New England Patriots) =- Lucas Oil Stadium (Indianapolis Colts) =- RFK Field (D.C. United) =- Rogers Arena (Vancouver Canucks) /T/ Learn more at www.GuestAssist.net. About qtags llc qtags llc designs and provides mobility solutions that ENGAGE customers, call them to ACTION and help them REMEMBER the message. qtags offers program solutions to stadiums, arenas, conference centers, government agencies and corporations throughout the United States, Canada and the Caribbean. Forward-Looking Statements Thi |
||||
| 15-08-08 | ||||
|
|
||||
|
|
||||
|
1p up makes a change
|
||||
| 28-05-08 | ||||
|
|
||||
|
|
||||
|
I was told by my broker at Cornhill that this was a good buy. It has gone downhill, ever since I bought into it.
Anyone else has been caught. |
||||
|
|
||||
The contents of the postings summarised here represents the opinions of the authors and not of Interactive Investor Trading Limited.
They have not been approved or issued by Interactive Investor Trading Limited.
More messages
They have not been approved or issued by Interactive Investor Trading Limited.
Editor's Pick:
Markets: FTSE 100 uncertain on WednesdayEditor's Pick:
Glenstrata's just a silly word. Stick to big dividendsEditor's Pick:
Revenue rise buoys Thomas CookEditor's Pick:
Reckitt Benckiser shares boosted by outperformanceEditor's Pick:
Mixed fortunes for Daily Mail and Virgin MediaEditor's Pick:
AIM commodities players update investorsEditor's Pick:
BHP Billiton leagues ahead despite profit dipEditor's Pick:
Bulls should head for ChinaEditor's Pick:
Stock to Watch: Imperial TobaccoEditor's Pick:
George Godber’s AIM stock picks
Summary
Share
