Versus Systems (VS) - 2023 Q2 - Quarterly Report

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]