Versus Systems Inc.
For the period ended Dec 31, 2025. Filed Apr 15, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 15, 2026
VS$0.82-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001213900-25-026006
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-15.
0001213900-26-044110
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 70 previous paragraphs and 64 current paragraphs.
41 unchanged; 16 reworded; 7 added; 13 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Cost of revenues was $16,446 for the year ended December 31, 2025, representing a decrease of $23,831, or 59%, from $40,277 for the year ended December 31, 2024. The decrease was due to the decrease in infrastructure needed for the Xcite Interactive customers.
Current report
Selling, general and administrative was $4,280,214 for the year ended December 31, 2025, representing a decrease of $30,004, or 1%, from $4,310,218 for the year ended December 31, 2024. The decrease was primarily due to a reduction in professional fees. Selling, general and administrative for the year ended December 31, 2025, included Company funds which had been misappropriated. For more information about the fraudulent activity and a promissory note that was executed by the former Chief Financial Officer in connection therewith, please see Notes 11 and 12 to our consolidated financial statements for the year ended December 31, 2025.
Current report
We are pursuing initiatives intended to improve cash flows from operations and continue to evaluate strategic and financing alternatives to strengthen liquidity. To execute the business plan and support growth initiatives, the Company may seek additional financing through equity or debt offerings, credit facilities, or other arrangements. There can be no assurance that such financing will be available on terms acceptable to the Company, or at all. Any future equity or equity-linked financing could dilute existing stockholders and may affect the market price of the Company’s common shares, while debt financing, if obtained, could impose covenants or interest obligations. If sufficient funding is not secured when required, the Company may need to further align its operating expenditures with available resources, which could impact certain development programs or staffing levels. Management believes that disciplined cost control, continued customer engagement, and expansion into new markets may provide a foundation for improved liquidity over time; however, material uncertainties remain until additional financing or sustained positive cash flows are achieved.
Current report
In addition, as previously disclosed in the Company’s Form 12b-25 filed on April 1, 2026, in the first quarter of 2026, the Audit Committee of the Company’s Board of Directors conducted an internal investigation and determined that fraudulent activity involving the Company’s former Chief Financial Officer had occurred. A promissory note was executed in connection therewith; however, there can be no assurance that such note will be collected in part or full or at all. For more information about the fraudulent activity and promissory note, please see Notes 11 and 12 to our consolidated financial statements for the year ended December 31, 2025, which disclosure is incorporated herein by reference.
Current report
During the year ended December 31, 2025, the Company recognized $176,000 attributed to professional services.
Current report
The Company invoices ASPIS on a monthly basis with 30 day payment terms. For the year ended December 31, 2025 the Company has collected $1,320,000, respectively, from ASPIS.
Current report
Intangible assets consist of internally developed software. The Company amortizes such assets using the straight-line method over the expected useful life of the asset once. The Company evaluates the useful lives of these assets on an annual basis. If the estimate of an intangible asset’s remaining useful life is changed, the Company amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. Intangible assets capitalized during the year ended December 31, 2025 was $609,000.
Removed paragraphs (13)
Previous report
Cost of revenues was $40,277 for the year ended December 31, 2024, representing a decrease of $62,790, or 61%, from $103,067 for the year ended December 31, 2023. The decrease was primarily due to significant reductions in staff related to our company restructuring.
Previous report
Selling, general and administrative was $4,310,218 for the year ended December 31, 2024, representing a decrease of $1,634,691, or 27%, from $5,944,909 for the year ended December 31, 2023. The decrease was primarily due to a reduction in staffing levels, from 16 employees at December 31, 2023 to 6 employees at December 31, 2024.
Previous report
Impairment of goodwill and other intangible assets
Previous report
Impairment of goodwill and other intangible assets was none for the year ended December 31, 2024, representing a decrease of $3,968,332 or 100% from $3,968,332 for the year ended December 31, 2023. The $3,698,332 impairment as of December 31, 2023 was related to the impairment of capitalized software from our HP contract and platform.
Previous report
Overview
Previous report
We plan to increase our cash flow from our operations to address some of our liquidity concerns and are evaluating other strategic alternatives. However, to execute our business plan and implement our business strategy, we anticipate that we will need to obtain additional financing from time to time and may choose to raise additional funds through public or private equity or debt financings, a bank line of credit, borrowings from affiliates or other arrangements. We cannot be sure that any additional funding, if needed, will be available on terms favorable to us or at all. Furthermore, any additional capital raised through the sale of equity or equity-linked securities may dilute our current shareholders’ ownership in us and could also result in a decrease in the market price of our common shares. The terms of those securities issued by us in future capital transactions may be more favorable to new investors and may include the issuance of warrants or other derivative securities, which may have a further dilutive effect. Furthermore, any debt financing, if available, may subject us to restrictive covenants and significant interest costs. There can be no assurance that we will be able to raise additional capital, when needed, to continue operations in their current form. If we cannot raise needed funds, we might be forced to make substantial reductions in our operating expenses, including reductions in our research and development expenses or headcount reductions, which could adversely affect our ability to implement our business plan and ultimately our viability as a company.
Previous report
Intangible assets acquired separately are measured upon initial recognition at cost, which comprises the purchase price plus any costs directly attributable to the preparation of the asset for its intended use. Intangible assets acquired through business combinations (Xcite Interactive) or asset acquisitions are initially recognized at fair value as at the date of acquisition. After initial recognition, intangible assets are carried at cost less accumulated amortization and any accumulated impairment charges. During the year ended December 31, 2023, the Company completed an impairment analysis of its intangible assets and concluded the assets were impaired. As a result, the Company impaired the remaining carrying value of the intangible assets in the amount of $3,968,332. No new intangible assets were capitalized during the year ended December 31, 2024.
Previous report
Deferred Revenue
Previous report
Revenue recognition of sales is recorded on a monthly basis upon delivery or as the services are provided. Cash received in advance for services are recorded as deferred revenue based on the proportion of time remaining under the service arrangement as of the reporting date.
Previous report
Convertible Debt
Previous report
We may enter into negotiated short term convertible debt agreement to provide bridge capital in between equity raises. Our convertible debt agreements include a debt discount and a common stock conversation feature that may be exercised by the noteholder that is either at or out of the money. We evaluate the terms of convertible debt issue prior to accepting such agreements to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. We evaluate our convertible debt in accordance with ASC 470-20, Debt with conversion and Other Options (“ASC 470-20”) and ASC 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”). Under ASC 815-40, to qualify for equity classification (or nonbifurcation, if embedded) the instrument (or embedded feature) must be both (1) indexed to the issuer’s stock and (2) meet the requirements of equity classification guidance.
Previous report
Functional currency
Previous report
The functional currency for each of our subsidiaries is the currency of the primary economic environment in which the respective entity operates. Such determination involves certain judgements to identify the primary economic environment. We reconsider the functional currency of our subsidiaries if there is a change in events and/or conditions which determine the primary economic environment.
Reworded paragraphs (16)
Previous wording
Our customers mostly sports teams (Professional and Collegiate), venues (Arenas, Football Stadiums, Baseball Stadiums), and advertising agencies, which typically use our products as part of their live events or as part of an advertising campaign with the goal of engaging fans, increasing consented first-party data, and increasing sales. At December 31, 2024, we had two active customers. At December 31, 2023, we had 16 active customers.
Current wording
Our customers mostly sports teams, venues (Arenas, Football Stadiums, Baseball Stadiums), fan engagement and sponsor activation platforms, digital out-of-home media companies, and advertising agencies, which typically use our products as part of their live events or as part of an advertising campaign with the goal of engaging fans, increasing consented first-party data, and increasing sales. At December 31, 2025, we had four active customers. At December 31, 2024, we had two active customers.
Previous wording
Our products and games are designed so that end users of our products could earn prizes by registering on our system and completing in-content challenges like trivia, polls, or casual mobile games. Players could use our system to play a variety of games and earn a wide range of prize types, provided by advertisers and sponsors. Our products, include our in-venue XEO and Filter Fan Cam products for live events, and our new stand-alone “Winfinite” product line that can be used by brands, advertising agencies, and content partners to reach potential customers outside of sports venues, on mobile devices. We also have an IP portfolio that could create future licensing and product development opportunities including our recently allowed Artificial Intelligence (“AI”) and Machine Learning (“ML”) series of patent claims.
Current wording
Our products and games are designed so that end users could earn prizes by registering on our system and completing in-content challenges like trivia, polls, or casual mobile games. Players could use our system to play a variety of games and earn a wide range of prize types, provided by advertisers and sponsors. Our products, include our in-venue Filter Fan Cam (“FFC”) products for live events, our stand-alone “Winfinite” product line that can be used by brands, advertising agencies, and content partners to reach potential customers outside of sports venues, on mobile devices, as well as the “Winfinite” Games, which are customizable web-based casual games. We also have an IP portfolio that could create future licensing and product development opportunities including our recently allowed Artificial Intelligence (“AI”) and Machine Learning (“ML”) series of patent claims.
Previous wording
With the acquisition of Xcite Interactive in June 2021, we acquired a number of key pieces of technology and relationships that have helped to drive our engagement and rewards business, including a live events fan engagement business that has partnered with professional sports franchises in the National Football League (“NFL”), the National Basketball Association (“NBA”), the National Hockey League (“NHL”) and others to increase audience engagement using interactive gaming functions like trivia, polling, and casual games that can be played alongside live experiences whether a player is at-home, in a restaurant, or in-venue at the event itself. Our largest customers in 2024 were the Texas Rangers and San Jose Sharks.
Current wording
With the acquisition of Xcite Interactive in June 2021, we acquired a number of key pieces of technology and relationships that have helped to drive our engagement and rewards business, including a live events fan engagement business that has partnered with professional sports franchises in the National Football League (“NFL”), the National Basketball Association (“NBA”), the National Hockey League (“NHL”) and others to increase audience engagement using interactive gaming functions like trivia, polling, and casual games that can be played alongside live experiences whether a player is at-home, in a restaurant, or in-venue at the event itself. Our largest customers in 2024 were the Texas Rangers and San Jose Sharks. For the year ended December 31, 2025, the Company’s largest customer was ASPIS, a significant shareholder and we continue to do business with the Texas Rangers.
Previous wording
We now have three principal software products. Our eXtreme Engagement Online or “XEO” platform is designed primarily for in-venue main-board work in stadiums and arenas. Our Filter Fan Cam (FFC) platform is an Augmented Reality filtering tool that can be used for mobile and in-venue applications. In addition, we have a stand-alone gaming and prizing product that we call “Winfinite,” which allows brands, media companies, and advertising agencies to reach out to customers directly on their mobile devices. We license these three software products to teams, ad agencies, and other content creators.
Current wording
We offer a suite of products centered on “Winfinite” and FFC. Our FFC platform is an Augmented Reality filtering tool that can be used for mobile and in-venue applications. In addition, we have a stand-alone gaming and prizing product that we call “Winfinite,” which allows brands, media companies, and advertising agencies to reach out to customers directly on their mobile devices. We license these software products to teams, ad agencies, and other content creators.
Previous wording
***Operating Expenses.***We classify our operating expense as research and development, and selling, general and administrative. Personnel costs are the primary component of each of these operating expense categories, which consist of cash-based personnel costs, such as salaries, benefits and bonuses. Additionally, these categories include intangible amortization, amortization expense, interest expense, software costs, professional fees and share-based compensation.
Current wording
***Operating Expenses.***We classify our operating expense as research and development, and selling, general and administrative. Personnel costs are the primary component of each of these operating expense categories, which consist of cash-based personnel costs, such as salaries, benefits and bonuses. Additionally, these categories include professional fees and share-based compensation.
Previous wording
Our revenues are derived from three primary sources: software licensing, professional services and advertising. Revenue was $57,288 for the year ended December 31, 2024, representing a decrease of $213,881, or 79%, from $271,169 for the year ended December 31, 2023. The decrease was primarily due to a significant reduction in the number of clients from 16 active clients at December 31, 2023 to two active clients at December 31, 2024.
Current wording
Our revenues are derived from three primary sources: software licensing, professional services and advertising. Revenue was $2,183,415 for the year ended December 31, 2025, representing an increase of $2,126,127, or 3,711%, from $57,288 for the year ended December 31, 2024. The increase can be attributed to the recognition of the ASPIS license revenue and professional services.
Previous wording
Research and development was $246,019 for the year ended December 31, 2024, representing a decrease of $861,216, or 78%, from $1,107,325 for the year ended December 31, 2023. The decrease was primarily due to a reduction in staffing levels, including a large portion of our engineering staff, and a reduction in software costs.
Current wording
Research and development was $48,065 for the year ended December 31, 2025, representing a decrease of $197,954, or 80%, from $246,019 for the year ended December 31, 2024. The decrease was primarily due to a reduction in staffing levels, including a large portion of our engineering staff, and a reduction in software costs.
Previous wording
Loss from operations was $4,539,226 for the year ended December 31, 2024, representing a decrease of $6,313,148, or 58%, from $10,852,374 for the year ended December 31, 2023. Decreases in salaries because of reduced staffing levels resulted in the decrease in the loss.
Current wording
Loss from operations was $2,161,310 for the year ended December 31, 2025, representing a decrease of $2,377,916, or 52%, from $4,539,226 for the year ended December 31, 2024. Increase in revenue resulted in the decrease in the loss.
Previous wording
Other income (expense) was an expense of $11,384 for the year ended December 31, 2024, representing a decrease of $351,601, or 103%, from income of $340,217 for the year ended December 31, 2023. The decrease in income can be attributed to the $354,105 employee retention credit earned in 2023 with no credit earned in 2024.
Current wording
Other income (expense) was an income of $18,173 for the year ended December 31, 2025, representing an increase of $29,557, or 260%, from expense of $(11,384) for the year ended December 31, 2024. The increase in income can be attributed to changes in foreign currency rates.
Previous wording
Income tax expense was $24,226 for the year ended December 31, 2024, representing a decrease of 100% from no income tax expense for the year ended December 31, 2023. The increase in income tax can be attributed to taxes owed in our Canadian jurisdiction in 2024.
Current wording
Income tax expense was $1,596 for the year ended December 31, 2025, representing a decrease of $22,630 from income tax expense of $24,226 for the year ended December 31, 2024. The decrease in income tax can be attributed to taxes owed in our Canadian jurisdiction in 2024.
Previous wording
Since inception, we have incurred significant operating losses. For the years ended December 31, 2024 and 2023, we incurred net losses of approximately $4.6 million and $10.5 million, respectively. During such periods, we have financed our operations primarily through an initial public offering of our common shares in January 2021 and subsequent public offerings, registered direct offerings, convertible debt, warrant exercises and private placements. In October 2024 warrant holders exercised $0.9 million of warrants into common stock. Also, in November and December 2024 the Company raised $2.5 million of convertible debt. In February 2023, we completed a registered direct offering of our common shares in which we received gross proceeds of $2.25 million and net proceeds of approximately $2.0 million. In October 2023, we completed a public direct offering of our common shares in which we received gross proceeds of approximately $3.0 million and net proceeds of approximately $2.5 million. In November 2023, we completed a private placement of our equity securities in which we received gross proceeds of $2.6 million. Throughout 2023, we received approximately $4.6 million in proceeds from warrant exercises. Our cash and cash equivalents as of December 31, 2024 was $3.1 million. Our primary cash needs are for working capital requirements, capital expenditures and to fund our operations.
Current wording
Since inception, the Company has incurred operating losses as it continues to invest in developing and commercializing its technology platform. For the years ended December 31, 2025 and 2024, we incurred net losses of approximately $2.1 million and $4.6 million, respectively. During these periods, operations were primarily financed through an initial public offering of common shares in January 2021 and subsequent equity and debt transactions, including warrant exercises and private placements. In October 2024, warrant holders exercised approximately $0.9 million of warrants, and in November and December 2024 the Company raised $2.5 million through convertible notes. Our cash and cash equivalents as of December 31, 2025 was $0.5 million. Our primary cash needs are for working capital requirements, capital expenditures and to fund our operations.
Previous wording
We are subject to the risks and uncertainties associated with a new business. We believe that our current resources and the expected revenues from operations will be insufficient to fund our planned operations for the next twelve months. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2024 stated that our recurring losses from operations, accumulated deficit as of December 31, 2024, inability to achieve positive cash flows from operations and inability to fund day to day activities through operations indicates that a material uncertainty exists that may cast significant doubt on our ability to continue as a going concern.
Current wording
We are subject to the risks and uncertainties common to emerging growth businesses. Management believes that current resources and expected operating revenues may not be sufficient to fund planned activities for the next twelve months. The report of our independent registered public accounting firm on the Company’s consolidated financial statements for the year ended December 31, 2025 and 2024 included an explanatory paragraph noting that recurring operating losses, accumulated deficit, and negative operating cash flows raise substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance of those financial statements.
Previous wording
Net cash used in operating activities for the year ended December 31, 2024 was $4,971,948 as compared to $5,582,139 for the year ended December 31, 2023. The decrease in cash used in operating activities was primarily attributable to a decrease in the net loss.
Current wording
Net cash used in operating activities for the year ended December 31, 2025 was $2,052,862 as compared to $4,971,948 for the year ended December 31, 2024. The decrease in cash used in operating activities was primarily attributable to a decrease in the net loss of $2,144,733 and prepaids of $380,972 offset by an increase of stock-based compensation of $430,428, an increase in accounts receivable of $836,000 and increase in accounts payable of $116,471.
Previous wording
Net cash used in investing activities for the year ended December 31, 2024 was none as compared to $14,514 for the year ended December 31, 2023. The change in cash flow used in investing activities was primarily attributable to a significant reduction in payroll capitalized for the development of intangible assets and proceeds of sale of equipment in the prior year.
Current wording
Net cash used in investing activities for the year ended December 31, 2025 was $609,000 as compared to $0 for the year ended December 31, 2024. The change in cash flow used in investing activities was primarily attributable to attributed to monies spent on developed technology attributed to the Company’s new product offerings.
Previous wording
Net cash provided by financing activities was $3,278,235 for the year ended December 31, 2024 as compared to $9,045,578 for the year ended December 31, 2023. The change in cash flow provided by financing activities was mainly attributable to the decrease in proceeds we received from the issuance of common shares, exercise of warrants and options, and repayments on notes payable. The Company raised $3,278,235 for the year ended December 31, 2024 from debt issuances and warrant exercise compared to $11,693,973 attributed to equity and warrants issuances, net of offering cost offset by repayment of $2,519,835 related party notes payable for the year ended December 31, 2023.
Current wording
Net cash provided by financing activities was none for the year ended December 31, 2025 as compared to $3,278,235 for the year ended December 31, 2024. The change in cash flow provided by financing activities was mainly attributable to the decrease in proceeds we received from the issuance of common shares and warrants. The Company raised $3,278,235 for the year ended December 31, 2024 from debt issuances and warrant exercises.
Previous wording
We recognize revenue when or as the performance obligations in the contract are satisfied. For performance obligations that are fulfilled at a point in time, revenue is recognized at the fulfillment of the performance obligation. Since the IP is determined to be a functional license, the value of the grant of use is recognized in the first period of the contract term in which the license agreement is in force. Since the costs incurred to satisfy the ASPIS technology performance obligations are incurred evenly throughout the year, the value of the technical support and new improvements services are recognized throughout the contract period as these performance obligations are satisfied. For the year ended December 31, 2024, no revenue was recognized on our functional IP as the Technology Agreement with ASPIS as the license had not been delivered to ASPIS during the year.
Current wording
We recognize revenue when or as the performance obligations in the contract are satisfied. For performance obligations that are fulfilled at a point in time, revenue is recognized at the fulfillment of the performance obligation. Since the IP is determined to be a functional license, the value of the grant of use is recognized in the first period of the contract term in which the license agreement is in force. For the year ended December 31, 2025, $1,980,000 of revenue was recognized on our functional IP as the Technology Agreement with ASPIS as the license had been delivered to ASPIS during the year.