Revenue Performance - Revenue for the three months ended September 30, 2024, was $3,848, representing a decrease of $19,102, or 83%, from $22,950 for the same period in 2023[120] - Revenue for the nine months ended September 30, 2024, was $57,288, a decrease of $179,665, or 76%, from $236,953 for the same period in 2023[126] Expenses - Research and development expenses for the three months ended September 30, 2024, were $11,462, a decrease of $260,649, or 96%, from $272,111 for the same period in 2023[121] - Selling, general and administrative expenses for the three months ended September 30, 2024, were $521,410, a decrease of $1,095,751, or 68%, from $1,617,161 for the same period in 2023[122] - Operating loss for the three months ended September 30, 2024, was $529,024, a decrease of $1,360,868, or 72%, from $1,889,892 for the same period in 2023[123] Cash Position - Cash position as of September 30, 2024, was $471,248, down from $4,689,007 as of December 31, 2023[131] - Net cash used in operating activities for the nine-month period ended September 30, 2024, was $4,255,345, a slight improvement from $4,355,723 in the same period of 2023, indicating a decrease in cash outflow[138] - There was no cash used in investing activities for the nine-month period ended September 30, 2024, compared to $14,106 in the same period of 2023, reflecting a significant reduction in payroll capitalized for intangible asset development[139] - Net cash provided by financing activities was none for the nine-month period ended September 30, 2024, down from $5,362,978 in the same period of 2023, primarily due to the absence of proceeds from common share issuance[140] - The net increase (decrease) in cash for the nine-month period ended September 30, 2024, was $(4,217,759), compared to an increase of $989,951 in the same period of 2023[136] Financial Health and Future Outlook - The company incurred a net loss of approximately $3.5 million for the nine months ended September 30, 2024, compared to a net loss of $5,019,067 for the same period in 2023[133] - The company anticipates needing additional financing to execute its business plan, which may involve public or private equity or debt financings, raising concerns about potential dilution of current shareholders[135] - The company is experiencing declining revenues and is evaluating strategic alternatives to address liquidity concerns[135] - The company may be forced to make substantial reductions in operating expenses, including research and development, if additional funds cannot be raised[135] Customer Base - The company has five active customers as of December 31, 2023, down from one customer as of September 30, 2024, due to a decrease in the sales force[110] Debt and Financing - As of December 31, 2023, all promissory notes totaling $4,750,818 have been repaid, with no accrued interest recorded[141] Revenue Recognition - The company recognizes revenue on a monthly basis upon delivery or as services are provided, with cash received in advance recorded as deferred revenue[152]

Company Overview - Versus Systems Inc. has appointed Luis Goldner as Chief Executive Officer, effective immediately, succeeding Curtis Wolfe who served as interim CEO [1] - Luis Goldner is a member of the Board of Directors of Versus Systems and has extensive experience in executive management, including previous roles as CEO of Intralot do Brazil and Trust Impressores [1][2] - Versus Systems has developed a proprietary in-game prizing and promotions engine that allows game developers to offer real-world rewards to players [2] Leadership Experience - Luis Goldner has over 16 years of executive management experience in both private and public sectors, playing a key role in establishing Smart Card technology in Brazil and growing Intralot do Brazil into a leading lottery operator [2] - Goldner has also served as Chief Operating Officer and Board Member of ICARO Media Group, which provides AI-powered media technology [2] Strategic Vision - Goldner expressed excitement about his new role and aims to collaborate with the team to drive innovation and create value for stakeholders [2]

Core Viewpoint - Versus Systems, Inc. has been notified by NASDAQ that its stockholders' equity of $1,797,764 is below the required minimum of $2,500,000 for continued listing on the NASDAQ Capital Market [1] Group 1 - The company has until October 7, 2024, to submit a plan to regain compliance with the minimum stockholders' equity standard [2] - If the plan is accepted, NASDAQ may grant an extension of up to 180 calendar days to demonstrate compliance [2] - The company is developing options to increase stockholder equity and aims to file the plan by the deadline [3] Group 2 - Versus Systems has developed a proprietary in-game prizing and promotions engine that allows game developers to offer real-world rewards to players [4] - The company is headquartered in Los Angeles, California [4]

Revenue Performance - Revenue for the three months ended June 30, 2024, was $26,937, a decrease of $29,116, or 52%, from $56,053 for the same period in 2023[126] - Revenue for the six months ended June 30, 2024, was $53,440, representing a decrease of $160,563, or 75%, from $214,003 for the same period in 2023[131] Cost and Expenses - Cost of revenues for the three months ended June 30, 2024, was $16,231, a decrease of $7,339, or 31%, from $23,570 for the same period in 2023[127] - Research and development expenses for the three months ended June 30, 2024, were $67,203, a decrease of $650,464, or 91%, from $717,667 for the same period in 2023[127] - Selling, general and administrative expenses for the three months ended June 30, 2024, were $1,443,171, a decrease of $182,300, or 11%, from $1,625,471 for the same period in 2023[128] Net Loss - The net loss for the three months ended June 30, 2024, was $1,499,742, a decrease of $810,913, or 35%, from $2,310,655 for the same period in 2023[129] - The company incurred net losses of approximately $10.5 million and $22.4 million for the years ended December 31, 2023, and 2022, respectively[139] Cash Position - Cash position as of June 30, 2024, was $905,915, down from $4,689,007 as of December 31, 2023[137] - Net cash used in operating activities for the six months ended June 30, 2024, was $3,783,092, an increase from $3,514,003 in the same period of 2023[142] - The company reported a net cash decrease of $3,783,092 for the six months ended June 30, 2024, compared to an increase of $2,014,982 in the prior year[142] - There was no net cash provided by financing activities in the six months ended June 30, 2024, down from $5,538,655 in the same period of 2023[146] - The cash flow used in investing activities was $0 for the six months ended June 30, 2024, compared to $9,670 in the same period of 2023[145] Financing and Strategic Alternatives - The company completed a public direct offering in October 2023, receiving gross proceeds of approximately $3 million[139] - The company believes current resources and expected revenues will be insufficient to fund planned operations for the next twelve months[140] - The company has evaluated strategic alternatives due to declining revenues and liquidity concerns, indicating a need for additional financing[141] - The company may consider raising funds through public or private equity or debt financings, which could dilute current shareholders' ownership[141] - The company anticipates that any additional capital raised may come with restrictive covenants and significant interest costs[141] - All promissory notes totaling $4,750,818 issued from 2017 to December 31, 2022, have been repaid as of December 31, 2023[147] Tax Matters - The company has not recorded any accruals for interest and penalties related to income tax matters as of June 30, 2024, and 2023[154]

Core Insights - Geoff Deller has been appointed as the new interim Chief Financial Officer of Versus Systems, bringing extensive experience in finance, investment banking, and technology sectors [1][4] - The company aims to leverage Deller's financial leadership to guide its next phase of growth and innovation [1][6] - Curtis Wolfe, the Interim Chief Executive Officer, expressed confidence in Deller's role in shaping the company's future and building a dynamic management team [2][5] Company Overview - Versus Systems, Inc. is a technology company focused on interactive entertainment and audience engagement solutions, headquartered in Los Angeles, California [4][5] - The company has developed a proprietary in-game prizing and promotions engine that allows game developers to offer real-world rewards to players [5] - Versus Systems is committed to innovation, security, and delivering value to its stakeholders while redefining the interactive entertainment landscape [6]

About this content Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government. She earned a Bachelor of ...

VANCOUVER, British Columbia, July 01, 2024 (GLOBE NEWSWIRE) -- Versus Systems, Inc. (NASDAQ: VS), a pioneering technology company in interactive entertainment, is pleased to announce the appointment of a new Interim Chief Executive Officer. Prior to Mr. Wolfe's appointment as Interim CEO, the Board of Directors accepted the resignations of Matthew Pierce, the Company's CEO and Director, Craig Finster, the Company's CFO, and Keyvan Penman, the Company's Chairman, and independent directors Michelle Gahagan an ...

Revenue and Financial Performance - Revenue for the three-month period ended March 31, 2024, was $26,503, representing a decrease of $131,447, or 83%, from $157,950 for the same period in 2023 due to a reduction in active clients from 16 to 5 [145]. - The operating loss for the three-month period ended March 31, 2024, was $1,503,893, an increase of $51,411, or 4%, from $1,452,482 in the same period in 2023, driven by increased professional fees [149]. - The company incurred net losses of approximately $10.5 million and $22.4 million for the years ended December 31, 2023, and 2022, respectively [153]. Expenses - Cost of revenues decreased to $24,046 for the three-month period ended March 31, 2024, down $8,311, or 26%, from $32,357 in the same period in 2023, primarily due to staff reductions [146]. - Research and development expenses were $39,412 for the three-month period ended March 31, 2024, a decrease of $27,728, or 41%, from $67,140 in the same period in 2023, attributed to staffing cuts [147]. - Selling, general and administrative expenses increased to $1,464,481 for the three-month period ended March 31, 2024, up $79,139, or 6%, from $1,385,341 in the same period in 2023, mainly due to higher professional fees [148]. Cash Flow and Liquidity - Cash position decreased to $2,892,356 as of March 31, 2024, down from $4,689,007 as of December 31, 2023, due to cash used for operations and ongoing losses [151]. - Net cash used in operating activities for the three-month period ended March 31, 2024, was $1,796,651, a decrease from $2,257,959 in the same period in 2023, primarily due to a reduction in net loss [157]. - The company plans to evaluate strategic alternatives to address liquidity concerns, including potential additional financing through public or private equity or debt [155]. Financial Reporting and Accounting Policies - The company applies the Current Expected Credit Loss (CECL) model under ASC 326 for impairment of financial assets, which requires recognizing an allowance for credit losses based on expected losses over the life of the asset [162]. - Deferred financing costs primarily consist of direct incremental costs related to the public offerings of common stock completed in February 2023, offset against the proceeds upon completion [163]. - Property and equipment is stated at cost, net of accumulated depreciation, with depreciation calculated over the depreciable amount starting from the date the asset is available for intended use [164]. - Intangible assets acquired through business combinations or asset acquisitions are initially recognized at fair value and carried at cost less accumulated amortization and impairment charges [165]. - The company accounts for income taxes using the assets and liability method, with deferred tax assets and liabilities determined based on differences between financial statement carrying amounts and tax basis [166]. - A valuation allowance is recorded against deferred tax assets when realization is not more likely than not, which may materially affect future financial results [167]. - The company recognizes uncertain income tax positions at the largest amount likely to be sustained upon audit, with no accruals for interest and penalties recorded as of March 31, 2024 and 2023 [168]. - Share-based payments estimation involves using the Black-Scholes valuation model, with estimates based on historical data and average volatility of similar companies [169]. - Revenue recognition is recorded monthly upon delivery or as services are provided, with cash received in advance recorded as deferred revenue [170]. - The functional currency for each subsidiary is determined based on the primary economic environment, with reconsideration if there are changes in relevant events or conditions [171]. Debt and Interest - The company has recorded $0 in accrued interest on promissory notes as of December 31, 2023, following the repayment of all loans [160].

Revenue Performance - Revenue for the year ended December 31, 2023, was $271,169, a decrease of $847,671 or 76% from $1,108,840 in 2022, primarily due to a reduction in active customers from 16 to 5[187]. Cost Management - Cost of revenues decreased to $103,067 in 2023, down $513,982 or 83% from $617,049 in 2022, attributed to significant staff reductions[188]. - Research and development expenses were $1,107,235 for 2023, a decrease of $1,298,771 or 54% from $2,406,006 in 2022, mainly due to reduced staffing and software costs[189]. - Selling, general and administrative expenses were $5,944,909 in 2023, down $5,893,219 or 50% from $11,838,128 in 2022, reflecting a reduction in staff from 39 to 8 employees[191]. Impairment and Losses - Impairment of goodwill and other intangible assets was $3,968,332 in 2023, a decrease of $4,950,670 or 56% from $8,919,002 in 2022, influenced by reduced revenue projections and competitive landscape[192]. - Net loss for the year ended December 31, 2023, was $10,512,157, a decrease of $11,961,035 or 53% from $22,473,192 in 2022[186]. Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2023, were $4.7 million, with net cash used in operating activities amounting to $5,471,406[196][200]. - The company completed a registered direct offering in February 2023, raising gross proceeds of $2.25 million, and a public direct offering in October 2023, raising approximately $3 million[196]. - The company plans to increase cash flow from operations and is evaluating strategic alternatives to address liquidity concerns[198]. - The company incurred net cash used in investing activities of $14,514 in 2023, significantly lower than $2,536,832 in 2022, due to reduced payroll capitalized for intangible asset development[201]. Debt and Financing - The company issued $4,750,818 in promissory notes from 2017 to December 31, 2022, with interest rates ranging from 2.45% to 3.95% per annum, all loans have been repaid as of December 31, 2023[203]. - Deferred financing costs primarily relate to direct incremental costs from the public offerings of common stock completed in February 2023[206]. Asset Management - Property and equipment are stated at cost, net of accumulated depreciation, with depreciation calculated over the depreciable amount starting from the date the asset is available for intended use[207]. - Intangible assets acquired through business combinations are initially recognized at fair value as of the acquisition date and carried at cost less accumulated amortization[209]. Financial Reporting and Compliance - A $9,743,659 warrant derivative loss was recorded beginning February 1, 2021, when the company changed its functional currency[211]. - The company recognizes uncertain income tax positions at the largest amount that is more-likely-than-not to be sustained upon audit, with no accruals for interest and penalties recorded as of December 31, 2023[214]. - The estimation of share-based payments utilizes the Black-Scholes valuation model, with inputs based on historical data and market conditions[215]. - Revenue recognition occurs monthly upon delivery or as services are provided, with cash received in advance recorded as deferred revenue[216]. - The functional currency for each subsidiary is determined based on the primary economic environment, with reassessment occurring if conditions change[217].

Financial Performance - Total revenues for the six months ended June 30, 2023, were $214,003, a decrease of 62.8% compared to $574,417 for the same period in 2022[3] - The net loss for the six months ended June 30, 2023, was $3,637,544, compared to a net loss of $6,581,561 for the same period in 2022, representing a 44.3% improvement[3] - The total comprehensive loss attributable to shareholders for the six months ended June 30, 2023, was $3,207,759, compared to $5,322,635 for the same period in 2022, a decrease of 39.7%[3] - The company reported a basic and diluted loss per common share of $0.34 for the six months ended June 30, 2023, compared to $4.20 for the same period in 2022, indicating a significant reduction in loss per share[3] - For the six months ended June 30, 2023, Versus Systems Inc. reported a loss of $3,637,544, a 44.3% improvement compared to a loss of $6,581,561 for the same period in 2022[5] Cash Flow and Liquidity - Cash and cash equivalents increased to $3,193,827 as of June 30, 2023, from $1,178,846 as of December 31, 2022, reflecting a 171.5% increase[2] - Cash used in operating activities decreased to $3,514,003, down 35% from $5,406,488 in the prior year[5] - The company generated cash from financing activities amounting to $5,538,655, compared to $6,957,591 in the previous year, reflecting a 20.4% decrease[5] - Cash at the end of the period increased to $3,193,827, up 68.8% from $1,892,698 at the end of June 2022[5] - The company has not achieved positive cash flow from operations as of June 30, 2023, raising substantial doubt about its ability to continue as a going concern[9] Assets and Liabilities - Total assets rose to $9,469,099 as of June 30, 2023, compared to $8,802,517 as of December 31, 2022, marking a 7.5% increase[2] - Total current liabilities decreased to $2,287,048 as of June 30, 2023, down from $3,324,558 as of December 31, 2022, a reduction of 31.2%[2] - As of June 30, 2023, accounts receivable consists of customer receivables of $1,093 (net of an allowance for doubtful accounts of $300) and GST receivable of $20,293[79] - As of June 30, 2023, the company's accounts payable and accrued liabilities totaled $292,270, a decrease from $522,012 as of December 31, 2022, reflecting a reduction of approximately 44%[98] Shareholder Equity - Share capital increased to $128,823,181 as of June 30, 2023, from $122,353,525 as of December 31, 2022, reflecting a growth of 5.8%[2] - The company’s reserves decreased to $13,350,541 as of June 30, 2023, from $14,506,758 as of December 31, 2022, a decline of 7.9%[2] - The weighted average common shares outstanding increased to 9,486,337 for the six months ended June 30, 2023, compared to 1,265,052 for the same period in 2022, an increase of 650.5%[3] Business Operations - The Company operates with a fully remote workforce and has no long-term lease agreements, resulting in no lease liabilities or right-of-use assets[50] - The Company operates in three business segments: live events, software licensing, and a B2B software platform for video game publishers[131] - The Company does not pay dividends and focuses on maximizing corporate development efforts through capital management[129] Acquisitions and Investments - Versus Systems Inc. completed the acquisition of Xcite Interactive in June 2021, enhancing its audience engagement capabilities across major sports leagues[8] - The acquisition of Xcite Interactive Inc. was completed on June 3, 2021, with a total consideration of $10.7 million based on the closing share price at that time[89] - The Company acquired an additional 15.1% interest in Versus LLC on March 1, 2022, increasing its ownership interest to 81.9%[87] Financial Reporting and Compliance - The Company recognizes government grants in profit or loss to offset corresponding expenses systematically over the periods related to the costs[55] - The Company recognizes impairment losses for intangible assets immediately if the recoverable amount is less than the carrying amount[41] - The Company evaluates the remaining useful life of intangible assets each reporting period to determine if revisions are necessary[34] - The Company recognizes impairment losses for financial assets at amortized cost based on expected credit losses[29] Subsequent Events - The Company evaluated subsequent events from June 30, 2023, to August 14, 2023, and found no events requiring recognition or disclosure, except for one[137] - The Company extended CAD$670,000 in notes payable to director Brian Tingle after June 30, 2023[137]