VV

Versatile Systems Inc. (Trading symbol on the TSX Venture Exchange: VV) announces its results for the first quarter of 2015 fiscal year. Highlights of the Company’s operations for the quarter included:

• Revenue for the three months ended September 30, 2014 was $8,748,198 compared to $6,639,475 for the same quarter last year;
• The gross profit for the three months ended September 30 2014 was $1,464,157 or 16.7% of sales compared to $1,280,857 or 19.3% of sales for the same quarter last year;
• Net Loss for the quarter amounted to $443,269 ($0.00 per share) compared to Net Loss of $1,249,421 ($0.01 per share) for the same quarter last year;
• General and administrative expenses for the quarter amounted to $817,462 compared to $1,216,388 for the same quarter last year, a decrease of $398,926. As a percentage of sales the general and administrative expenses were 9.3% in the quarter compared to 18.3% in the same quarter last year;
• Selling and marketing expenses for the quarter amounted to $565,015 compared to $870,789 for the same quarter last year, a decrease of $305,774;
• The research and development expense for the quarter amounted to $250,881 compared to $384,775 for the same quarter last year;
• Deferred revenue at September 30, 2014 was $6,530,262 (of which $3,855,549 is expected to be recognized in the next four quarters) compared to $6,277,307 at September 30, 2013;
• On August 21, 2014, a convertible loan was repaid, eliminating future interest charges, but generating a noncash charge of $174,628 for write-down of the deferred finance charges associated with the derivative.

“I am pleased with the improvement in our overall financial performance during this current quarter,” said Bertrand des Pallieres, Versatile Systems’ Executive Chairman. “Our effort to control operating costs has resulted in an over 30 percent reduction in quarterly SG&A expenses compared to the average for our prior seven quarters. The Versatile management team will continue to identify and implement cost reduction opportunities as well as focus on higher growth and margin business segments with a goal of achieving profitability in the near term.”

About Versatile

Versatile is a technology company offering innovative solutions and trusted services to the retail, distribution and enterprise IT markets. The company’s three core businesses specialize in consumer credit and digital engagement solutions; mobile computing device sales, repair and software development; and IT project, contract staffing and hardware fabrication services. For more information, please visit 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.

Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. All amounts are expressed in U.S. dollars unless otherwise stated.

  Versatile Systems Inc. Condensed Consolidated Statements of Financial Position (Unaudited - Prepared by Management)             September 30, June 30, Expressed in U.S. dollars 2014       2014 (unaudited) ASSETS Current Assets Cash and cash equivalents $ 1,544,725 $ 2,439,635 Investment in Equus 22,100 24,800 Accounts receivable 2,718,171 4,593,075 Prepaid expenses 3,225,178 5,100,642 Inventory   1,130,173           1,153,376   8,640,347 13,311,528   Long-term accounts receivable 187 187 Long-term prepaid expenses 2,416,364 502,488 Capital assets 168,329 184,260 Intangible assets   93,537           112,867   $ 11,318,764         $ 14,111,330     LIABILITIES Current Liabilities Line of credit and bank overdraft $ 4,260,589 $ 4,492,062 Accounts payable and accrued liabilities 4,298,892 5,957,226 Current portion of deferred revenue 3,855,549 5,986,802 Derivative liability   -           57,814   12,415,030 16,493,904   Deferred Revenue 2,674,713 555,246 Convertible Loan   -           386,353     15,089,743           17,435,503   SHAREHOLDERS’ EQUITY (DEFICIENCY) Share capital 55,120,276 55,120,276 Equity reserve 4,637,968 4,637,968 Accumulated deficit (63,194,425 ) (62,751,156 ) Accumulated other comprehensive loss   (334,798 )         (331,261 )   (3,770,979 )         (3,324,173 )   $ 11,318,764         $ 14,111,330       Versatile Systems Inc. Condensed Consolidated Statements of Comprehensive Loss (Unaudited - Prepared by Management)     Expressed in U.S. dollars       Three months ended September 30, 2014       2013           SALES $ 8,748,198 $ 6,639,475   COST OF SALES   7,284,041           5,358,618       1,464,157           1,280,857     EXPENSES Selling and marketing 565,015 870,789 General and administrative 817,462 1,216,388 Research and development 250,881 384,775 Amortization of capital assets 13,504 21,002 Foreign exchange (gain)/loss   (2,064 )         2,624       1,644,798           2,495,578     LOSS FROM OPERATIONS (180,641 ) (1,214,721 )   Interest expense (258,885 ) (33,244 ) Unrealized gain (loss) on investment (2,700 ) - Gain (loss) on sale of capital assets 467 (461 ) Gain (loss) on derivatives   (310 )         -     LOSS BEFORE INCOME TAXES (442,069 ) (1,248,426 )   Current income tax expense   (1,200 )   (995 )   NET LOSS $ (443,269 )       $ (1,249,421 )   Other comprehensive income (loss) Foreign exchange translation   (3,537 )         9,494   Total comprehensive loss $ (446,806 )       $ (1,239,927 )   LOSS PER SHARE (basic and diluted)   ($0.00 )         ($0.01 )   Weighted average number of common shares oustanding, basic and diluted   196,607,053           157,285,643       Versatile Systems Inc. Condensed Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Unaudited - Prepared by Management)     Expressed in U.S. dollars                                 Share Equity Accumulated other Capital       Reserve       Deficit       comprehensive loss       Total     Balance, June 30, 2013 $ 54,433,709 $ 4,637,968 $ (56,313,036 ) $ (334,894 ) $ 2,423,747 - Net loss - - (1,249,421 ) - (1,249,421 )

Foreign exchange translationof subsidiary

- - - 9,494 9,494                                   Balance, September 30, 2013 $ 54,433,709       $ 4,637,968       $ (57,562,457 )       $ (325,400 )       $ 1,183,820       Balance, June 30, 2014 $ 55,120,276 $ 4,637,968 $ (62,751,156 ) $ (331,261 ) $ (3,324,173 )   Net loss - - (443,269 ) - (443,269 )

Foreign exchange translation of subsidiary

- - - (3,537 ) (3,537 )                                   Balance, September 30, 2014 $ 55,120,276       $ 4,637,968       $ (63,194,425 )       $ (334,798 )       $ (3,770,979 )     Versatile Systems Inc. Condensed Consolidated Statements of Cash Flows (Unaudited - Prepared by Management)     Expressed in U.S. dollars       Three months ended September 30, 2014       2013         OPERATING ACTIVITIES Net loss $ (443,269 ) $ (1,249,421 ) Items not involving cash Amortization of capital assets 13,504 21,002 Foreign currency translation adjustment ( 3,537 ) - (Gain) loss on sale of capital assets ( 467 ) 461 Noncash interest charges 164,170 - Unrealized (gain) loss on investment   2,700           -   Cash flow generated from (used in) operations before other items ( 266,899 ) ( 1,227,958 ) Net change in non-cash working capital   189,575           924,030     ( 77,324 )         ( 303,928 )   INVESTING ACTIVITIES Proceeds from disposition of capital assets 8,658 1,418 Intangible assets - contract cost additions (28,289 ) (42,862 ) Intangible assets - contract cost recognized 47,619 57,712 Purchase of capital assets   ( 5,764 )         ( 4,304 )   22,224           11,964     FINANCING ACTIVITIES Proceeds from line of credit and bank overdraft - 364,523 Repayment of line of credit and bank overdraft (231,473 ) - Repayment of convertible loan   (608,337 )         -     ( 839,810 )         364,523     Increase (decrease) in cash and cash equivalents ( 894,910 ) 72,559   Cash and cash equivalents, beginning of period 2,439,635 83,724           Cash and cash equivalents, end of period $ 1,544,725         $ 156,283  

VersatileBertrand des PallieresExecutive Chairman800-851-1281orVicki TurjanCFO800-851-1281