What changed in this filing

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Item 1. Business

2025-03-31 compared with 2024-04-01 · 148 added, 127 removed, 206 unchanged (57% of the section changed)

Our mission is to reinvent

the way our customers interact with consumers through live events, games, apps and streaming content.

the way our customers interact with consumers through live events, games, apps and streaming content by delivering a great brand experience.

We offer a suite of proprietary

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their websites, their venues, or their streaming media content.

Our customers are mostly sports teams, venues, 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.

Our products and games are designed so that end users of our products

can earn prizes by registering on our system and completing in-content challenges like trivia, polls, or casual mobile games.

can 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 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 can create future licensing and product development opportunities including our recently allowed Artificial

Intelligence (“AI”) and Machine Learning (“ML”) series of patent claims.

Our customers are mostly sports

teams, venues, 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.

Our products and games are

designed so that end users of our products can earn prizes by registering on our system and completing in-content challenges like trivia,

polls, or casual mobile games.

Players can 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 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 can create future licensing and product development opportunities

including our recently allowed Artificial Intelligence (“AI”) and Machine Learning (“ML”) series of patent claims.

With the acquisition of Xcite

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in 2023 were the San Jose Sharks, the Sacramento Kings, and ENT Marketing, a marketing agency that used our platform to promote Coca-Cola

We now have three principal software

Our eXtreme Engagement Online or “XEO” platform is designed primarily for in-venue main-board work in stadiums and

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 now have three principal

software products.

Our eXtreme Engagement Online or “XEO” platform is designed primarily for in-venue main-board work in stadiums

While functional throughout 2024, the "XEO" Platform is currently in a development-only state and is not being used

by clients as of 2025.

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.

In September 2024 the Company

closed down its operations within the United Kingdom,

In October 2024, the Company

entered into a $2,500,000 funding agreement with ASPIS Cyber Technologies (“ASPIS”).

At that time, ASPIS delivered to the

Company $500,000 and agreed to, on or before November 15, 2024, deliver to the Company an additional $2,000,000.

However, the Company

has informally agreed to defer the $2,000,000 until Nasdaq has progressed further with its review of the Company’s plan.

to that agreement, the Company issued to ASPIS a senior convertible promissory note in the principal amount of the total amount funded.

The note provides that upon approval by the Company’s shareholders and the Company’s redomiciling to Delaware the amount funded

to date plus, at ASPIS’s option, any accrued and unpaid interest thereon, will be converted into units of the Company, each equal

to (a) one common share of the Company and (b) a warrant to purchase one-half of one Common Share at a purchase price of $4.00 per one

whole share, exercisable for five years.

On December 24, 2024 a special

resolution authorizing and approving the continuance of the Company from the Province of British Columbia in accordance with the Business

Corporations Act (British Columbia) into the State of Delaware in accordance with the Delaware General Corporation Law.

As a result of

the Company becoming a Delaware corporation, a special resolution authorizing and approving the issuance of 2,155,172 common shares, warrants

to purchase an additional 1,077,586 shares, and such 1,077,586 shares upon the exercise of such warrants, upon conversion of a $2.5 million

promissory note held by ASPIS Cyber Technologies, Inc., which is an affiliate of the Company’s largest shareholder, Cronus Equity

Capital Group, LLC.

Our Products and Services

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and services to our partners and customers:

and support for in-venue products XEO and FFC.

Our in-venue fan engagement products are used at a variety of

live-event and other entertainment focused properties like stadiums and arenas, but they can also be used at conferences, theme parks,

and restaurants to increase audience and customer engagement.

Content partners, including professional sports teams, can use XEO and

FFC in conjunction with their existing video screens, “jumbotrons”, “halo boards”, “main boards”,

as well as branded apps to reach potential customers with games and interactive experiences that enhance the live event.

and Analytics for Winfinite.

Winfinite is an interactive advertising tool that increases awareness, affinity,

data, and incremental sales.

It allows content creators, marketers, agencies, and other advertisers to increase customer acquisition

and loyalty through a combination of games and rewards.

The product is compatible with a number of digital platforms and can be integrated

into customers’ existing advertising campaigns.

Analytics and

support for in-venue products XEO and FFC.

Our in-venue fan engagement products are used at a variety of live-event and

other entertainment focused properties like stadiums and arenas, but they can also be used at conferences, theme parks, and

restaurants to increase audience and customer engagement.

Content partners, including professional sports teams, can use XEO and FFC

in conjunction with their existing video screens, “jumbotrons”, “halo boards”, “main boards”, as

well as other branded experiences to reach potential customers with games and interactive experiences that enhance the live

Support and Analytics for Winfinite.

Winfinite is an interactive advertising tool that increases awareness, affinity, data, and incremental sales.

It allows content creators, marketers, agencies, and other advertisers to increase customer acquisition and loyalty through a combination of games and rewards.

The product is compatible with a number of digital platforms and can be integrated into customers’ existing advertising campaigns.

Research and Development

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licensors of brands, properties and other content.

We believe that our small

size will provide us some amount of a competitive edge in the near term as we are able to make quick decisions to take advantage of customer

We believe that our small size

will provide us some amount of a competitive edge in the near term as we are able to make quick decisions to take advantage of customer

preferences and emerging technologies like AI.

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our potential competitors have one or more advantages over us, including:

● significantly

greater financial and personnel resources;

brand and consumer recognition;

● longer and larger customer histories, including much more

consented first-party data;

datasets from which to derive customer behavior patterns and AI training data;

capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products;

substantial intellectual property of their own;

labor and development costs and better overall economies of scale;

distribution and presence.

significantly greater financial and personnel resources;

stronger brand and consumer recognition;

longer and larger customer histories, including much more consented first-party data;

larger datasets from which to derive customer behavior patterns and AI training data;

the capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products;

more substantial intellectual property of their own;

lower labor and development costs and better overall economies of scale;

broader distribution and presence.

Government Regulation

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In addition, certain states

prohibit, restrict, or regulate contests in a number of ways, particularly with respect to payment of entry fees, and the size, value,

and/or source of prizes to participants in such contests.

Certain other states require companies to register and/or insure certain types

While we do not typically require entry fees or consideration of any type from our players, and thus based on legal research

conducted, are not subject to these regulations in most cases, we do remain conscious of these regulations.

We may choose to not offer

certain prizes or certain contests in certain areas due to these regulations.

We can do so without interruption to other services and

other jurisdictions.

While at this time, our operations are not subject to certain regulations, for example the pay-to-play regulations,

given that our platform is free-to-play, we are conscious that because the nature of our services is relatively new and is rapidly evolving,

we may not be able to accurately predict which regulations will be applied to our business.

We may also at some point become subject to

new or amended regulations.

prohibit, restrict, or regulate contests in several ways, particularly with respect to payment of entry fees, and the size, value, and/or

source of prizes to participants in such contests.

Certain other states require companies to register and/or insure certain types of contests.

While we do not typically require entry fees or consideration of any type from our players, and thus based on legal research conducted,

are not subject to these regulations in most cases, we do remain conscious of these regulations.

We may choose to not offer certain prizes

or certain contests in certain areas due to these regulations.

We can do so without interruption to other services and other jurisdictions.

While at this time, our operations are not subject to certain regulations, for example the pay-to-play regulations, given that our platform

is free-to-play, we are conscious that because the nature of our services is relatively new and is rapidly evolving, we may not be able

to accurately predict which regulations will be applied to our business.

We may also at some point become subject to new or amended regulations.

Further, our online in-game

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COPPA sets forth, among other things, a number of restrictions related to what information may be collected with respect to children under

the age of 13, as the kinds of content that website operators may present to children under such age.

There are also a variety of laws

and regulations governing individual privacy and the protection and use of information collected from individuals, particularly in relation

to an individual’s personally identifiable information (e.g., credit card numbers).

We currently employ multiple measures to ensure

that we are COPPA-compliant.

We screen for age at registration, we address the issue in our terms of service, and we employ a kick-out

procedure during member registration whereby anyone identifying themselves as being under the age of 13 during the process may not register

for a player account on our website or participate in any of our online experiences or tournaments without linking their account to that

of a parent or guardian.

the age of 13, as well as the kinds of content that website operators may present to children under such age.

There are also a variety

of laws and regulations governing individual privacy and the protection and use of information collected from individuals, particularly

in relation to an individual’s personally identifiable information (e.g., credit card numbers).

We currently employ multiple measures

to ensure that we are COPPA-compliant.

We screen for age at registration, we address the issue in our terms of service, and we employ

a kick-out procedure during member registration whereby anyone identifying themselves as being under the age of 13 during the process

may not register for a player account on our website or participate in any of our online experiences or tournaments without linking their

account to that of a parent or guardian.

Such regulation would have

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We continually

monitor our activity and changes in such laws in order to ensure, to the best extent possible, that we remain in compliance with such

State and federal regulation of internet-based activity, including online prizing and rewards, is evolving and there can be no assurance

that future legislation, regulation, judicial decisions, US Attorney, or state attorney general actions will not restrict or prohibit

activities such as those made possible by our platform.

monitor our activity and changes in such laws to ensure, to the best extent possible, that we remain in compliance with such laws.

and federal regulation of internet-based activity, including online prizing and rewards, is evolving and there can be no assurance that

future legislation, regulation, judicial decisions, US Attorney, or state attorney general actions will not restrict or prohibit activities

such as those made possible by our platform.

Patents and Licenses

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seeks to match competitive game players and spectators with prizing from their favorite brands through a unique conditional prize matching

As of December 31, 2023, we had over 50 pending patent claims

As of December 31, 2024, we had numerous pending patent claims

with the U.S.

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As of December 31,

2023, we had been granted five patents.

2024, we had been granted seven patents.

We also continue to engage

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in foreign countries.

Companies in the industry

in which we operate frequently are sued or receive informal claims of patent infringement or infringement of other intellectual property

Companies in the industry in

which we operate frequently are sued or receive informal claims of patent infringement or infringement of other intellectual property

We may receive such claims from companies, including from competitors and customers, some of which have substantially more resources

and have been developing relevant technology similar to ours.

As and if we become more successful, we believe that competitors will be

more likely to try to develop products that are similar to ours and that may infringe on our proprietary rights.

It may also be more likely

that competitors or other third parties will claim that our products infringe their proprietary rights.

Successful claims of infringement

by a third party, if any, could result in significant penalties or injunctions that could prevent us from selling some of our products

in certain markets, result in settlements or judgments that require payment of significant royalties or damages or require us to expend

time and money to develop non-infringing products.

We cannot assure you that we do not currently infringe, or that we will not in the

future infringe, upon any third-party patents or other proprietary rights, but will not and have never done so intentionally.

If we become more successful, we believe that competitors will be more likely

to try to develop products that are similar to ours and that may infringe on our proprietary rights.

It may also be more likely that competitors

or other third parties will claim that our products infringe their proprietary rights.

Successful claims of infringement by a third party,

if any, could result in significant penalties or injunctions that could prevent us from selling some of our products in certain markets,

result in settlements or judgments that require payment of significant royalties or damages or require us to expend time and money to

develop non-infringing products.

We cannot assure you that we do not currently infringe, or that we will not in the future infringe, upon

any third-party patents or other proprietary rights, but will not and have never done so intentionally.

Corporate History and Structure

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on June 30, 2016, and concurrently ceased or divested our mining related business and began operating our current software platform

In June 2021, we completed the acquisition of multimedia, production,

and interactive gaming company Xcite Interactive, a provider of online audience engagement through its owned and operated XEO technology

We now provide products and services to multiple professional sports organizations across Major League Baseball, the NHL, and

the NBA to drive audience engagement.

In June 2021, we completed

the acquisition of multimedia, production, and interactive gaming company Xcite Interactive, a provider of online audience engagement

through its owned and operated XEO technology platform.

We now provide products and services to multiple professional sports organizations

across Major League Baseball, the NHL, and the NBA to drive audience engagement.

In September 2024 the Company

closed down its operations within the United Kingdom, Versus Systems UK, Ltd.

On December 24, 2024 a special

resolution authorizing and approving the continuance of the Company from the Province of British Columbia in accordance with the Business

Corporations Act (British Columbia) into the State of Delaware in accordance with the Delaware General Corporation Law.

We operate through our majority-owned

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Xcite Interactive Inc, a Delaware corporation that was reorganized as such on April 1, 2019.

We are in the process of considering a number of strategic alternatives

for our company focused on maximizing shareholder value, including, but not limited to, an acquisition, merger, reverse merger, sale

of assets, strategic partnership, capital raise or other transaction.

We are hopeful that our change in jurisdiction from British Columbia

to Delaware, which we expect to effect in the second quarter of 2024, will more appropriately reflect our shift in strategy and will (i) improve

our access to capital markets, increase funding and strategic flexibility and reduce the cost of capital, (ii) improve our ability

to execute an acquisitive growth strategy using our capital stock as consideration, and (iii) better focus management efforts on

and international operation and better attract and retain key employees.

Our common shares are presently quoted on the Nasdaq Capital Market

under the symbol “VS”.

In January 2023, the bid price of our common shares closed below the Nasdaq minimum $1.00 per share

requirement and on January 23, 2023 and July 25, 2023 we received notifications of noncompliance from Nasdaq.

We are in the process of considering

several strategic alternatives for our company to expand our business portfolio focused on maximizing shareholder value, including,

but not limited to, an acquisition, merger, reverse merger, sale of assets, strategic partnership, capital raise or other transaction.

We are hopeful that our change in jurisdiction from British Columbia to Delaware, which we expect to effect in the second quarter of

2024, will more appropriately reflect our shift in strategy and will (i) improve our access to capital markets, increase funding

and strategic flexibility and reduce the cost of capital, (ii) improve our ability to execute an acquisitive growth strategy using

our capital stock as consideration, and (iii) better focus management efforts on each U.S.

and international operation and

better attract and retain key employees.

Our common shares are presently

quoted on the Nasdaq Capital Market under the symbol “VS”.

In April 2024, the bid price of our common shares closed below

the Nasdaq minimum $1.00 per share requirement and on August 22, 2024 we received notifications of noncompliance from Nasdaq.

In accordance

with Nasdaq Listing Rule 5810(c)(3)(A), we were afforded until January 22, 2024 to regain compliance with the bid price requirement,

with Nasdaq Listing Rule 5810(c)(3)(A), we were afforded until February 18, 2025 to regain compliance with the bid price requirement,

which required that our common shares close at a price of at least $1.00 per share for a minimum of 10 consecutive trading days.

On December 28, 2023, we effected a 1-for-16 reverse stock split of our common shares, which increased the closing bid price above

$1.00 per share, and on January 16, 2024, Nasdaq notified us that we had regained compliance with the minimum bid price requirement.

Our principal executive offices in Canada are located at 1558 Hastings

Street, Vancouver, British Columbia V6G 3J4 Canada, and our telephone number at that address is (604) 639-4457.

On December 23, 2024, Nasdaq notified us that we had regained compliance with the minimum bid price requirement.

Our principal executive

offices are located at 3500 South DuPont Hwy.

Dover, DE 19901, and our telephone number is (604) 639-4457.

We are a distributed

organization and do not maintain offices in the United States, which is the country where all of our employees reside.

Our mailing address

in the United States is located at 10866 Washington Blvd #150, Culver City, CA 90232, and our telephone number in the United States

is (424) 226-8588.

Our website address is www.versussystems.com .

The information on or accessed through our website is not

incorporated in this annual report.

The SEC maintains an Internet site ( www.sec.gov ) that contains reports, proxy and information

statements, and other information regarding issues that file electronically with the SEC.

organization and do not maintain business offices in the United States, which is the country where all our employees reside.

website address is www.versussystems.com .

The information on or accessed through our website is not incorporated in this

annual report.

The SEC maintains an Internet site ( www.sec.gov ) that contains reports, proxy and information statements, and

other information regarding issues that file electronically with the SEC.

The following chart reflects

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United States

Versus Systems UK, Ltd

United Kingdom

United States

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The following table summarizes our staff by main

category of activity at December 31, 2023 and December 31, 2022:

category of activity at December 31, 2024 and 2023:

Main Activity

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General and administrative

All of our employees are located in the United

States and are predominantly full-time employees.

We have never had a work stoppage, and none of our employees is represented by a labor

organization or under any collective bargaining arrangements.

All of our employees are located

in the United States and are predominantly full-time employees.

We have never had a work stoppage, and none of our employees is represented

by a labor organization or under any collective bargaining arrangements.

We consider our employee relations to be good.

All employees are subject

to contractual agreements that specify requirements on confidentiality and restrictions on working for competitors, as well as other standard

As of April 1, 2024, we had

eight employees, including one in sales/marketing, two in engineering/product/design, one in accounts/operation, and four in general/administrative.

All employees

are subject to contractual agreements that specify requirements on confidentiality and restrictions on working for competitors, as well

as other standard matters.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business