The state tool, represented by a red circle in the toolbar, allows you to add states the automaton. After selecting it, you can add states by clicking on the canvas where you want to place the center of the state.
You can also move states with the state tool by dragging a state from its current location to another location.
For initial or final states, you should also designate the states as initial or final. To do this, right-click (or command-click) on a state; a menu will pop down where you can check or uncheck whether the state is initial or final. (You can bring this menu up regardless of your current tool.)
To delete a state, right-click (or command-click) it and select Delete from the popup menu.