Versus Systems (VS) - 2024 Q3 - Quarterly Report

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]