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PowerBand : Q1 March 31, 2022 Interim Management Discussion and Analysis



MARCH 31, 2022


Management’s Discussion & Analysis

Three months ended March 31, 2022

Dated May 30, 2022


The following Management Discussion & Analysis (“MD&A”) of PowerBand Solutions Inc. (the “Company”, “PowerBand”) has been prepared and written to comply with the requirements of National Instrument 51- 102 – Continuous Disclosure Obligations and should be read in conjunction with the annual audited consolidated financial statements of the Company for the years ended December 31, 2021 and 2020, and the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2022, together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. In the opinion of management, all adjustments (which consist only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for any future period. Information contained herein is presented as at May 30, 2022, unless otherwise indicated.

The unaudited condensed interim consolidated financial statements of the Company for the three months ended March 31, 2022, and 2021, have been prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and interpretations of the IFRS Interpretations Committee. The unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting.

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of PowerBand’s common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Caution Regarding Forward-Looking Statements

This MD&A contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to herein as “forward-looking statements”). These statements relate to future events or the Company’s future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements. The forward-looking statements in this MD&A speak only as of the date of this MD&A or as of the date specified in such statement.

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Management’s Discussion & Analysis

Three months ended March 31, 2022

Dated May 30, 2022

Forward-looking statements


Risk factors

For fiscal 2022, the Company’s

The Company has anticipated

Unforeseen costs to the

operating expenses are

all material costs; the operating

Company will arise; any

estimated to be approximately

activities of the Company for the

particular operating costs

$1,500,000 per month for

twelve-month period ending

increase or decrease from the

recurring corporate operating

March 31, 2022, and the costs

date of the estimation; changes


associated therewith, will be

in economic conditions.

consistent with PowerBand’s

current expectations.

The Company will be required to

The operating and business

Changes in debt and equity

raise additional capital in order

development activities of the

markets; timing and availability

to meet its ongoing operating

Company for the twelve-month

of external financing on

expenses and complete its

period ending March 31, 2022,

acceptable terms; increases in

planned business development

and the costs associated

costs; reductions in revenue,

activities for the twelve-month

therewith, will be consistent with

interest rate and exchange rate

period ending March 31, 2022.

PowerBand’s current

fluctuations; changes in

expectations; debt and equity

economic conditions.

markets, exchange and interest

rates and other applicable

economic conditions will be

favorable to PowerBand.

Management’s outlook

Financing will be available for

Industry-wide deterioration of

regarding future trends.

PowerBand’s business

the automotive industry;

development and operating

changes in debt and equity

activities; the financing market

markets; interest rate and

will be receptive to the

exchange rate fluctuations;

Company’s technological cloud-

changes in economic and

based software solution.

political conditions.

Sensitivity analysis of financial

Based on management’s

Changes in debt and equity


knowledge and experience of

markets; interest rate and

the financial markets, the

exchange rate fluctuations.

Company believes that there

would be no material adverse

changes to its results for the

year ended March 31, 2022 as

a result of a change in the

foreign currency exchange rates

or interest rates.

Inherent in forward-looking statements are risks, uncertainties, and other factors beyond PowerBand’s ability to predict or control. Please also make reference to those risk factors referenced in the “Risks and Uncertainties” section below. Readers are cautioned that the above chart does not contain an exhaustive list of the factors or assumptions that may affect the forward-looking statements, and that the assumptions underlying such statements may prove to be incorrect. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause PowerBand actual results, performance, or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should

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Management’s Discussion & Analysis

Three months ended March 31, 2022

Dated May 30, 2022

not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new informationor future events or otherwise, except as may be required by law. If the Company does update one ormore forward- looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law.

Non-IFRS Measures

This MD&A includes a few measures that are not prescribed by IFRS and as such may not be comparable to similar measures presented by other companies. Management believes that these measures are commonly employed to measure performance in our industry and are used by analysts, investors, lenders and interested parties to evaluate financial performance and the Company’s ability to incur and service debt to support business activities.

Our definition of EBITDA and Adjusted EBITDA described in the section “Reconciliation and Definition of Non- IFRS Measures” will likely differ from that used by other companies and therefore comparability may be limited. These non-IFRS measures should be read in conjunction with our annual audited consolidated financial statements and the related notes thereto as at and for the year ended December 31, 2021 and the unaudited condensed interim consolidated financial statements for the three-month period ended March 31, 2022. Readers should not place undue reliance on non-IFRS measures and should instead view them in conjunction with the most comparable IFRS financial measures.

COVID-19 Pandemic Disclosures

On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The initial spread of the COVID-19 pandemic impacted our business as we had just relaunched the lease originations in July 2020. The automotive industry experienced a dramatic decline in both new and used vehicle sales, curtailed by lockdowns and keeping buyers of vehicles out of the market. After the initial impact of the pandemic on our business we began to see demand for used vehicles and adoption of our online leasing platform.

In addition to benefiting from the adoption of the ecommerce in the used vehicle market, the pandemic also disrupted the supply chain in the automotive industry. With chip shortages and labour challenges, new vehicle manufacturers have struggled to meet the production demands and as a result, we have seen demand for used vehicles increase significantly in response to a lack of new vehicle inventory available. With this demand for used vehicle coupled with government stimulus has resulted in increase in the average price of used vehicles. This resulted in increased revenues in second and third quarter of 2021. However, in the fourth quarter of 2021 and the first quarter of 2022, revenue decreased due to low inventory levels, high prices of used vehicle and supply chain constraints leading to the decrease in the lease originations for the quarter. Refer to “Outlook” section for additional discussion on COVID-19 pandemic.

COVID-19 has caused heightened uncertainty and volatility in the global economy, including supply chain stress and inflationary pressure. If economic growth slows further or if a recession develops, customers may not have the financial means to lease or loan vehicles, thereby potentially having a negative impact on the Company’s financial performance. Since the impact of COVID-19 is ongoing, the effect of the COVID-19 outbreaks and the related impact on the global economy may not be fully reflected in the Company’s financial statements until future period. Further, volatility in the capital markets may continue, which may cause declines in the price of the Company’s shares and may also affect its ability to raise working capital through equity or debt transactions.

The ultimate duration and magnitude of the COVID-19 pandemic’s impact on the Company’s operations and financial position is not known at this time. An estimate of the financial effect of the pandemic on the Company is not practicable at this time.

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Management’s Discussion & Analysis

Three months ended March 31, 2022

Dated May 30, 2022

Description of Business

PowerBand Solutions Inc. (the “Company”) (formerly Marquis Ventures Inc.) was incorporated under the Business Corporations Act (British Columbia) on September 29, 2009, and is domiciled in Suite 225, 3385 Harvester Road, Ontario, Canada L7N 3N2. The registered office is located at Suite 1700, 666 Burrard Street, Vancouver, BC, Canada V6C 2X8.

PowerBand is a technology company that has developed (i) an online trading platform, (ii) a standardized appraisal system, (iii) a market intelligence report, and (iv) a finance portal for utilization in the automotive industry.

In February 2018, the Company closed its Qualifying Transaction under TSX Venture Exchange (“Exchange”) Policy 2.4 – Capital Pool Companies and changed its name to PowerBand Solutions Inc.

Effective February 9, 2018, the Company’s shares traded on the Exchange under the symbol “PBX”.

In November 2018 the Company entered into a 50/50 joint venture agreement with Bryan Hunt, who operate D2D Auto Auctions, an online auction, remarketing platform in the U.S.

In July 2019 the Company acquired a 60% interest in Drivrz Financial Holdings, LLC (formerly MUSA Holdings, LLC), a new and used vehicle leasing platform in the U.S, through its wholly owned subsidiary PowerBand Solutions US Inc. In June 2020, 9% interest in PowerBand Solutions US Inc. was disposed to third parties thereby reducing the Company’s interest in PowerBand Solutions US Inc. to 91%. This in turn reduced the Company’s interest in Drivrz Financial Holdings, LLC from 60% to 54.60%.

In October 2020, the Company acquired 60% interest in IntellaCar Solutions LLC, that offers an extensive video and brochure library of vehicles, enabling users to review the vehicle details. This technology is used by car dealerships in the United States.

In April 2021, the Company acquired an additional 40% interest in Drivrz Financial Holdings, LLC (formerly MUSA Holdings, LLC). The Company now holds 94.60% interest in Drivrz Financial Holdings, LLC.

The significant assets owned by PowerBand are web based and include a wholesale vehicle auction, a new auction platform for consumer-to-consumer transactions, a finance portal, dealership in store sales aids, a digital retailing suite as well as a web-based state of the art leasing platform. This software is hosted in Microsoft’s Azure cloud and offers a number of distinct but interconnected product offerings to its clients. PowerBand’s core products are responsive for use on any device and are complimented by mobile applications for its auction platform. All of the applications are being vertically integrated, representing a powerful technology stack for automotive retail. A summary of the current and future product offerings that PowerBand provides is listed below.

Current business operations-generating revenue:

Online Auction Formats – LiveNet (Revenue line – Subscription revenue)

PowerBand Canada offers two distinct online formats within its whole auction portal: LiveNet and MarketPlace. LiveNet is currently generating revenue and MarketPlace is not generating revenue.

LiveNet is a real-time, targeted, mobile online auction. LiveNet allows dealers to quickly and efficiently launch vehicle “auction calls” which are comprised of condition reports, photos, disclosures and third- party history reports to targeted networks of qualified buyers. These buyers are then encouraged to participate in a short duration auction via desktop or mobile, which results in a verified real time valuation of the described vehicle at that moment of time.

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PowerBand Solutions Inc. published this content on 31 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 May 2022 01:09:08 UTC.

Publicnow 2022


Sales 2022 32,6 M
25,9 M
25,9 M
Net income 2022

Net Debt 2022

P/E ratio 2022
Yield 2022
Capitalization 47,4 M
37,6 M
37,6 M
Capi. / Sales 2022 1,45x
Capi. / Sales 2023 0,82x
Nbr of Employees 14
Free-Float 62,5%


Duration :

Period :

PowerBand Solutions Inc. Technical Analysis Chart | MarketScreener

Income Statement Evolution



Mean consensus OUTPERFORM
Number of Analysts 1
Last Close Price 0,24 CAD
Average target price 0,50 CAD
Spread / Average Target 113%