DVN Is A Coiled Spring! C.DVN Danavation TechnologiesDanavation Technologies Corp.(Formerly Wolf’s Den Capital Corp.)
Management's Discussion and Analysis For the Three Months Ended October 31, 2021
Dated December 29, 2021
Basis of Presentation
The following management’s discussion and analysis (“MD&A”) of the financial condition and results of operations of Danavation Technologies Corp. (formerly Wolf’s Den Capital Corp.) (“Danavation” or the “Company”) constitutes management’s review of the factors that affected the Company’s financial and operating performance for the three months ended October 31, 2021. This MD&A has been prepared in compliance with the requirements of National Instrument 51-102 – Continuous Disclosure Obligations. This discussion should be read in conjunction with the unaudited condensed interim consolidated financial statements of the Company and the notes thereto for the three months ended October 31, 2021 and 2020. Information contained herein is presented as at December 29, 2021, unless otherwise indicated. Additional information relating to the Company is available on SEDAR at www.sedar.com and the Company’s website at https://danavation.com/.
The unaudited condensed interim annual consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) and the financial information herein was derived from those statements. All financial information included in this MD&A is presented in Canadian dollars, unless otherwise noted. Certain dollar amounts have been rounded to the nearest million dollars, hundred thousand dollars or thousand dollars, as noted.
Background and History
Danavation was incorporated on June 4, 2007, under the Business Corporations Act of British Columbia. The registered office of the Company is located at 1000 - 595 Burrard Street - P.O. Box 49290 - Vancouver, British Columbia, Canada V7X 1S8. The Company is proudly founded and based in North America. Its principal activity relates to the sale of micro e-paper displays and software to retailers to automate labeling, price, product, and promotions in real-time.
During the year ended July 31, 2021, the Company changed its name to Danavation Technologies Corp., and changed its year end from December 31 to July 31.
On January 8, 2021, the Company executed a share exchange agreement with Danavation Technologies Inc., resulting in a reverse takeover transaction. For a full description of the transaction, please refer to note 4 of the Company’s July 31, 2021 audited annual consolidated financial statements.
The Company's common shares trade on the Canadian Securities Exchange under the symbol "DVN" and on the OTCQB Venture Market in the US under the symbol “DVNCF”.
Core Business, Strategic Objectives and Key Performance Drivers
Core Business
Danavation is a Canadian-based, Internet of Things (“IoT”) technology company, providing micro e-paper displays to organizations across North America. The Company’s Digital Smart Labels™ (“DSLs”), powered by IoT automation technology and software Platform-as-a-Service (PaaS), enables companies across various sectors to automate labelling, price, product, and promotions in real-time, enhancing data accuracy and improving performance by optimizing inventory, removing high labour costs and low productivity associated with traditional labour-intensive workflows. DSL’s also help lessen company’s need to attract and retain labor during a fiercely competitive period. By empowering the adoption of smart retail, smart cities and industry 4.0, Danavation’s goal is to create a sustainable and profitable business for shareholders while advancing sound environmental, social and governance practices, including by significantly reducing paper usage. Danavation has introduced its solution to retailers across North America, including big box and boutique grocers, while also targeting new markets including healthcare providers, manufacturing, and logistics companies.Danavation believes that the following competitive advantages of its DSL solution are instrumental to securing business from both existing and future potential clients:
Danavation Technologies Corp.
Management's Discussion and Analysis
For the Three Months Ended October 31, 2021
North American headquarters enables quick and easy hands-on support for servicing and communications;
• Independent, in-house development of marketing, sales, and client support enables control over the full sales cycle;
• Quality and reliable hardware engineered in-house ensures products meet client standards;
• Network of various established relationships built from a management team with over 30 years of experience meaning few to no cold calls required;
• Secure end-to-end connectivity with unparalleled industry coverage, over-the-air (OTA) updates, and zero interference with Wi-Fi networks; and
• Adaptable for clients across industries including retail, healthcare, manufacturing, logistics, pet shelters, and others.
Strategic Objectives and Key Performance Drivers
As Danavation has achieved commercialization and is entering a period of forecast revenue ramp, the Company is committed to pursuing continued growth through expanded contracts to deploy DSLs for existing clients, including retailers, grocery stores, convenience and big box stores across the US and Canada, as well as healthcare providers and manufacturing and logistics companies. In addition, Danavation intends to continue developing new proprietary products, services and software solutions and securing further distribution partnerships with international companies who can market Danavation’s solutions in various jurisdictions outside of North America.
Despite the challenges brought on from COVID-19, Danavation remains focused on executing its long-term strategy. Danavation is committed to building shareholder value by becoming a leading provider of Digital Smart LabelsTM, growing revenue and annual recurring revenue related to software solutions, and ultimately driving the generation of positive net income. As part of this strategy, the Company has focused on building an organization that is prudently managed within a sector that offers significant future potential as economies seek to increase automation and reduce the need for physical contact. The Company believes that adhering to capital discipline and fundamental customer-oriented principles will be the keys to success, along with cost controls and operational efficiencies.
To date in calendar 2021, Danavation has secured new clients, partnerships and location deployments for its DSLs, including the announcement of multiple new installs through October, 2021 and a distribution partnership for Latin America and the Caribbean. Danavation intends to continue executing on growth opportunities that drive long-term value, focusing resources on securing high-quality clients with access to multiple locations which can help enhance exposure and support the pursuit of long-term profitability. The Company will also continue to evaluate compelling new hardware and software solutions which can further contribute to its long-term portfolio value and help fuel growth and sustainability into 2022 and beyond.