All amounts are expressed in U.S. dollars unless otherwise stated. © 2013 Versatile Systems Inc. All rights reserved.
Versatile Systems Inc.Condensed Consolidated Statements of Financial Position(Unaudited - Prepared by Management)Expressed in U.S. dollars December 31, 2012 June 30, 2012 ------------------------------------ (unaudited)ASSETSCurrent Assets Cash and cash equivalents $ 70,780 $ 434,725 Accounts receivable 5,585,111 5,994,377 Prepaid expenses 4,443,223 4,152,994 Inventory 2,272,065 2,347,110 ------------------------------------ 12,371,179 12,929,206Long-term accounts receivable 88,673 181,366Long-term prepaid expenses 938,983 1,278,432Investment in Equus 2,026,574 2,105,473Capital Assets 200,905 251,591Intangible assets 159,812 167,206Deferred income tax assets 880,407 880,407Goodwill 2,718,970 2,718,970 ------------------------------------ $ 19,385,503 $ 20,512,651 ------------------------------------ ------------------------------------LIABILITIESCurrent Liabilities Line of credit $ 2,967,124 $ 1,988,675 Accounts payable and accrued liabilities 5,076,473 5,544,888 Current portion of deferred revenue 4,924,276 5,292,359 ------------------------------------ 12,967,873 12,825,922Deferred Revenue 1,045,165 1,419,857 ------------------------------------ 14,013,038 14,245,779 ------------------------------------SHAREHOLDERS' EQUITY Share Capital 54,433,709 54,433,709 Equity Reserve 4,633,592 4,629,219 Deficit (53,357,117) (52,458,434) Accumulated other comprehensive loss (337,719) (337,622) ------------------------------------ 5,372,465 6,266,872 ------------------------------------ $ 19,385,503 $ 20,512,651 ------------------------------------ ------------------------------------Versatile Systems Inc.Condensed Consolidated Statements of Operations and Comprehensive Loss(Unaudited - Prepared by Management)Expressed in U.S. Three months ended Six months ended dollars December 31 December 31 2012 2011 2012 2011 ---------------------------------------------------- (Restated) (Restated)SALES $ 9,550,579 $ 9,147,552 $17,466,427 $18,186,764COST OF SALES 7,707,951 7,195,719 13,791,020 14,444,553 ---------------------------------------------------- 1,842,628 1,951,833 3,675,407 3,742,211 ----------------------------------------------------EXPENSES Selling and marketing 1,085,949 1,098,187 2,148,492 2,118,118 General and administrative 845,714 827,851 1,654,730 1,788,978 Research and development 322,849 275,847 559,095 519,957 Amortization of capital assets 36,753 38,092 77,001 86,511 Share-based compensation 2,187 4,279 4,373 8,749 Foreign exchange loss (gain) (2,588) 21,287 9,546 22,111 ---------------------------------------------------- 2,290,864 2,265,543 4,453,237 4,544,424 ----------------------------------------------------LOSS FROM OPERATIONS (448,236) (313,710) (777,830) (802,213) Interest expense (19,899) (7,594) (38,814) (12,817) Equity loss from Investment in Equus (25,259) (25,534) (78,899) (79,450) Loss on sale of capital assets and investments - (1,534) - (1,534) ----------------------------------------------------LOSS BEFORE INCOME TAXES (493,394) (348,372) (895,543) (896,014)Current income tax expense (995) (995) (3,140) (2,340)Deferred income tax recovery - 85,672 - 220,832 ----------------------------------------------------NET LOSS $ (494,389) $ (263,695) $ (898,683) $ (677,522) ---------------------------------------------------- ----------------------------------------------------Other comprehensive loss Foreign exchange translation (1,015) (6,670) (97) (6,670) ----------------------------------------------------Total comprehensive loss $ (495,404) $ (270,365) $ (898,780) $ (684,192) ---------------------------------------------------- ----------------------------------------------------LOSS PER SHARE (basic and diluted) ($0.00) ($0.00) ($0.01) ($0.00) ---------------------------------------------------- ----------------------------------------------------Versatile Systems Inc.Condensed Consolidated Statements of Changes in Shareholders' Equity(Unaudited - Prepared by Management) Warrant EquityExpressed in U.S. dollars Share Capital Reserve Reserve ---------------------------------------------------Balance, June 30, 2011 $ 54,433,709 $ 42,000 $ 4,578,470Net loss - - -Foreign exchange on the translation of VMS-UK - - -Expiration of warrants - -Share-based compensation expense - - 8,749 ---------------------------------------------------Balance, December 31, 2011 54,433,709 42,000 4,587,219 --------------------------------------------------- ---------------------------------------------------Balance, June 30, 2012 54,433,709 - 4,629,219Net loss - - -Foreign exchange on the translation of VMS-UK - - -Share-based compensation expense - - 4,373 ---------------------------------------------------Balance, December 31, 2012 $ 54,433,709 $ - $ 4,633,592 --------------------------------------------------- --------------------------------------------------- Accumulated other comprehensiveExpressed in U.S. dollars Deficit loss Total --------------------------------------------------- (Restated) (Restated) (Restated)Balance, June 30, 2011 $ (37,741,276) $ (326,261) $ 20,986,642Net loss (677,522) - (677,522)Foreign exchange on the translation of VMS-UK - (6,670) (6,670)Expiration of warrants - - -Share-based compensation expense - - 8,749 ---------------------------------------------------Balance, December 31, 2011 (38,418,798) (332,931) 20,311,199 --------------------------------------------------- ---------------------------------------------------Balance, June 30, 2012 (52,458,434) (337,622) 6,266,872Net loss (898,683) - (898,683)Foreign exchange on the translation of VMS-UK - (97) (97)Share-based compensation expense - - 4,373 ---------------------------------------------------Balance, December 31, 2012 $ (53,357,117) $ (337,719) $ 5,372,465 --------------------------------------------------- ---------------------------------------------------Versatile Systems Inc.Condensed Consolidated Statements of Cash Flows(Unaudited - Prepared by Management)Expressed in U.S. Three months ended Six months ended dollars December 31 December 31 2012 2011 2012 2011 ---------------------------------------------------- (Restated) (Restated)OPERATING ACTIVITIES Net loss $ (494,389) $ (263,695) $ (898,683) $ (677,522) Items not involving cash Amortization of capital assets 36,753 42,491 77,001 95,000 Share-based compensation 2,187 4,279 4,373 8,749 Loss on sale of capital assets and investments - 1,534 - 1,534 Equity loss from Investment in Equus 25,259 25,534 78,899 79,450 Unrealized foreign exchange loss (gain) 1,092 (16,712) 1,092 (16,712) Deferred income taxes - (85,672) - (220,832) ----------------------------------------------------Cash flow used in operations before other items (429,098) (292,241) (737,318) (730,333) Net change in non- cash working capital (462,265) (194,553) (584,966) 139,438 ---------------------------------------------------- (891,363) (486,794) (1,322,284) (590,895)INVESTING ACTIVITIES Short term investments - (14,776) - (14,776) Proceeds from disposition of capital assets - 19,089 - 20,430 Intangible assets - contract cost additions (59,574) (69,639) (137,979) (172,786) Intangible assets - contract cost recognized 60,797 62,200 145,373 143,445 Purchase of capital assets (7,938) (102,095) (27,504) (109,304) ---------------------------------------------------- (6,715) (105,221) (20,110) (132,991) ----------------------------------------------------FINANCING ACTIVITIES Proceeds from (Repayment of) line of credit 703,174 160,144 978,449 (122,642) ---------------------------------------------------- 703,174 160,144 978,449 (122,642) ----------------------------------------------------Decrease in cash and cash equivalents (194,904) (431,871) (363,945) (846,528)Cash and cash equivalents, beginning of period 265,684 563,999 434,725 978,656 ----------------------------------------------------Cash and cash equivalents, end of period $ 70,780 $ 132,128 $ 70,780 $ 132,128 ---------------------------------------------------- ----------------------------------------------------
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Contacts:
Versatile Systems Inc.
John Hardy
CEO
1-800-262-1633
Versatile Systems Inc.
Fraser Atkinson
CFO
1-800-262-1633
Versatile Systems Inc.
International: 001-206-979-6760
www.versatile.com
