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Item 1A. Risk Factors

2025-03-31 compared with 2024-04-01 · 323 added, 404 removed, 587 unchanged (55% of the section changed)

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Any one of these risks and uncertainties has the potential to cause material adverse effects

on our business, prospects, financial condition and operating results which could cause actual results to differ materially from any

forward-looking statements expressed by us and a significant decrease in the value of our common shares and warrants.

Refer to “Cautionary

Note Regarding Forward-Looking Statements.”

on our business, prospects, financial condition and operating results which could cause actual results to differ materially from any forward-looking

statements expressed by us and a significant decrease in the value of our common shares and warrants.

Refer to “Cautionary Note

Regarding Forward-Looking Statements.”

We may not be successful

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other alternatives that would likely result in our stockholders losing some or all of their investment in us.

We do not have any credit

facilities as a source of future funds, and there can be no assurance that we will be able to raise sufficient additional capital on acceptable

terms, or at all.

We do not have any credit facilities

as a source of future funds, and there can be no assurance that we will be able to raise sufficient additional capital on acceptable terms,

We may seek additional capital through a combination of private and public equity offerings, debt financings and strategic

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and marketing our existing products and services as well as launching new products, we may not be able to effectively:

adoption of our current and future products and services;

and retain customers for our products and services;

appropriate levels of customer training and support for our products and services;

an effective marketing strategy to promote awareness of our products and services;

manufacture and commercialize new products or achieve an acceptable return on our manufacturing or research and development efforts and

and adapt to changes in our market or predict future performance;

● accommodate

customer expectations and demands with respect to our products and services;

our market share by marketing and selling our products and services to new and additional market segments;

● maintain and develop strategic relationships with vendors to acquire necessary

information to our existing or future products and services;

or scale our activities to meet potential demand at a reasonable cost;

infringement and misappropriation of third-party intellectual property;

any necessary licenses to third-party intellectual property on commercially reasonable terms;

valid and enforceable patents that give us a competitive advantage;

our proprietary technology;

retain and motivate qualified personnel.

drive adoption of our current and future products and services;

attract and retain customers for our products and services;

provide appropriate levels of customer training and support for our products and services;

implement an effective marketing strategy to promote awareness of our products and services;

develop, manufacture and commercialize new products or achieve an acceptable return on our manufacturing or research and development efforts and expenses;

anticipate and adapt to changes in our market or predict future performance;

accommodate customer expectations and demands with respect to our products and services;

grow our market share by marketing and selling our products and services to new and additional market segments;

maintain and develop strategic relationships with vendors to acquire necessary information to our existing or future products and services;

adapt or scale our activities to meet potential demand at a reasonable cost;

avoid infringement and misappropriation of third-party intellectual property;

obtain any necessary licenses to third-party intellectual property on commercially reasonable terms;

obtain valid and enforceable patents that give us a competitive advantage;

protect our proprietary technology;

attract, retain and motivate qualified personnel.

If our products and services fail to achieve

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These risks include:

we may not have sufficient capital to achieve our growth strategy;

we may not develop our product and service offerings in a manner that enables us to be profitable and meet our customers’ requirements;

our growth strategy may not be successful;

fluctuations in our operating results will be significant relative to our revenues.

that we may not have sufficient capital to achieve our growth strategy;

that we may not develop our product and service offerings in a manner that enables us to be profitable and meet our customers’ requirements;

that our growth strategy may not be successful;

that fluctuations in our operating results will be significant relative to our revenues.

Our future growth will depend

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Our recent organizational changes and cost

cutting measures may not be successful.

Since January 2023, we implemented

reduction-in-force affecting approximately 62% of our workforce.

The objective of this workforce reduction was to realign our workforce

to meet our needs and to improve operating efficiency and reduce our cash burn.

However, these restructuring and cost cutting activities

may yield unintended consequences and costs, such as attrition beyond our intended reduction-in-force, a reduction in morale among our

remaining employees, and the risk we may not achieve the anticipated benefits of such reduction-in-force measure, all of which may have

an adverse effect on our results of operations or financial condition.

In addition, while positions have been eliminated, certain functions

necessary to our reduced operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees

among our remaining employees.

We may also discover the reductions in workforce and cost cutting measures will make it difficult for us

to resume development activities we have suspended or pursue new initiatives, requiring us to hire qualified replacement personnel, which

may require us to incur additional and unanticipated costs and expenses.

As a result of the loss

of services of a significant percentage of our personnel, including one executive officer and nearly all of our full-time engineering

staff, we may be unable to continue our operations and meet our ongoing obligations.

Any of these unintended consequences will likely

have a material adverse impact on our business, financial condition, and results of operations.

cutting measures are beginning to show promise, however may not be successful.

Since January 2024, we have

strategically realigned the focus of the business.

To achieve this, we changed our operating team, fostering a new energy and growth mindset

to the company.

This initiative began in June of 2024 with the addition of the new interim CEO and CFO.

The CFO was made permanent later

in the year and the then CEO completed their tasks and transitioned to a new position, installing a new and permanent CEO to steer the

company into the future.

This new management team since taking over, has opened new offices and a sales team in Brazil and has a clear

vision to grow the company in this market, whilst renewing existing contracts with existing and prior customers in the US.

exciting time for Versus and the company is making headway in its new strategy implementation.

Although changes to date have been positive,

we may also discover the prior major reductions in workforce and cost cutting measures may make it difficult for us to resume development

activities we have suspended or pursue new initiatives, requiring us to hire qualified replacement personnel, which may require us to

incur additional and unanticipated costs and expenses.

As a result of the loss of services of a

significant percentage of our personnel, including nearly all of our full-time engineering staff, we may be unable to continue our operations

and meet our ongoing obligations.

Any of these unintended consequences will likely have a material adverse impact on our business, financial

condition, and results of operations.

Future acquisitions or strategic investments

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risks, any of which could harm our business, including:

our financial resources to acquire a company;

● anticipated

benefits may not materialize as rapidly as we expect, or at all;

of management time and focus from operating our business to address acquisition integration challenges;

straining our financial resources to acquire a company;

anticipated benefits may not materialize as rapidly as we expect, or at all;

diversion of management time and focus from operating our business to address acquisition integration challenges;

retention of employees from the acquired company or from our company;

challenges associated with integrating employees from the acquired company into our organization;

● integration

of the acquired company’s accounting, management information, human resources and other administrative systems;

need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective

controls, procedures and policies;

or other claims in connection with the acquired company, including claims from terminated employees, former shareholders or other third

cultural challenges associated with integrating employees from the acquired company into our organization;

integration of the acquired company’s accounting, management information, human resources and other administrative systems;

the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies;

litigation or other claims in connection with the acquired company, including claims from terminated employees, former shareholders or other third parties.

Failure to appropriately mitigate

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our ongoing operations, effectively pursue our strategy or sustain our initiatives.

Our remaining liquidity and capital

resources may not be sufficient to allow us to fund our ongoing operations, effectively pursue our strategy or sustain our initiatives.

Our remaining liquidity and

capital resources may not be sufficient to allow us to fund our ongoing operations, effectively pursue our strategy or sustain our initiatives.

The report of our independent registered public accounting firm on our consolidated financial statements for the years ended December

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conditions include:

current and future financial results and position;

collateral availability of our otherwise unsecured assets;

market’s, investors’ and lenders’ view of our industry and products;

perception in the equity and debt markets of our ability to execute our business plan or achieve our operating results expectations;

price, volatility and trading volume and history of our common shares.

our current and future financial results and position;

the collateral availability of our otherwise unsecured assets;

the market’s, investors’ and lenders’ view of our industry and products;

the perception in the equity and debt markets of our ability to execute our business plan or achieve our operating results expectations;

the price, volatility and trading volume and history of our common shares.

If we are unable to obtain

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results could suffer.

The process of developing

and acquiring new technology products and services and enhancing existing offerings is complex, costly and uncertain.

The process of developing and

acquiring new technology products and services and enhancing existing offerings is complex, costly and uncertain.

If we fail to anticipate

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Investments in new technology are speculative.

Commercial success depends on many factors, including but not limited to innovativeness, developer support, and effective distribution

and marketing.

Commercial success depends on many factors, including but not limited to innovation, developer support, and effective distribution and

If customers do not perceive our latest offerings as providing significant new functionality or other value, they may reduce

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The size of our users’

level of engagement are critical to our success.

Our financial performance will be significantly determined by our success in adding,

retaining, and engaging active users of our products..

If people do not perceive our products to be useful, reliable, and trustworthy,

we may not be able to attract or retain users or otherwise maintain or increase the frequency and duration of their engagement.

in user retention, growth, or engagement could render us less attractive to video game publishers and developers, which may have a material

and adverse impact on our revenue, business, financial condition, and results of operations.

level of engagement is critical to our success.

Our financial performance will be significantly determined by our success in adding, retaining,

and engaging active users of our products.

If people do not perceive our products to be useful, reliable, and trustworthy, we may not

be able to attract or retain users or otherwise maintain or increase the frequency and duration of their engagement.

A decrease in user

retention, growth, or engagement could render us less attractive to video game publishers and developers, which may have a material and

adverse impact on our revenue, business, financial condition, and results of operations.

Any number of factors could potentially negatively

affect user retention, growth, and engagement, including if:

increasingly engage with competing products;

fail to introduce new and improved products or if we introduce new products or services that are not favorably received;

are unable to successfully balance our efforts to provide a compelling user experience with the decisions made by us with respect to

the frequency, prominence, and size of ads and other commercial content that we display;

are changes in user sentiment about the quality or usefulness of our products or concerns related to privacy and sharing, safety, security,

or other factors;

are unable to manage and prioritize information to ensure users are presented with content that is interesting, useful, and relevant

are adverse changes in our products that are mandated by legislation, regulatory authorities, or litigation, including settlements or

consent decrees;

or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience;

adopt policies or procedures related to areas such as sharing our user data that are perceived negatively by our users or the general

fail to provide adequate customer service to users, developers, or advertisers;

our software developers, or other companies in our industry are the subject of adverse media reports or other negative publicity.

If we are unable to build

and/or maintain relationships with publishers and developers or other content creators, our revenue, financial results, and future growth

potential may be adversely affected.

users increasingly engage with competing products;

we fail to introduce new and improved products or if we introduce new products or services that are not favorably received;

we are unable to successfully balance our efforts to provide a compelling user experience with the decisions made by us with respect to the frequency, prominence, and size of ads and other commercial content that we display;

there are changes in user sentiment about the quality or usefulness of our products or concerns related to privacy and sharing, safety, security, or other factors;

we are unable to manage and prioritize information to ensure users are presented with content that is interesting, useful, and relevant to them;

there are adverse changes in our products that are mandated by legislation, regulatory authorities, or litigation, including settlements or consent decrees;

technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience;

we adopt policies or procedures related to areas such as sharing our user data that are perceived negatively by our users or the general public;

we fail to provide adequate customer service to users, developers, or advertisers;

we, our software developers, or other companies in our industry are the subject of adverse media reports or other negative publicity.

If we are unable to build and/or

maintain relationships with publishers and developers or other content creators, our revenue, financial results, and future growth potential

may be adversely affected.

If we fail to keep up with industry trends

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We are a holding company.

All of our operations are conducted, and almost all of our assets are owned, by our subsidiaries.

Consequently, our cash flows and our

ability to meet our obligations depend upon the cash flows of our subsidiaries and the payment of funds by these subsidiaries to us in

the form of dividends, distributions or otherwise.

The ability of our subsidiaries to make any payments to us depends on their earnings,

the terms of their indebtedness, including the terms of any credit facilities, of which there are currently none, and legal restrictions.

While there are no restrictions on the ability of our subsidiaries to make any payments to us, such restrictions may arise in the future.

Any failure to receive dividends or distributions from our subsidiaries when needed could have a material adverse effect on our business,

our operations are conducted, and almost all of our assets are owned, by our subsidiaries.

Consequently, our cash flows and our ability

to meet our obligations depend upon the cash flows of our subsidiaries and the payment of funds by these subsidiaries to us in the form

of dividends, distributions or otherwise.

The ability of our subsidiaries to make any payments to us depends on their earnings, the terms

of their indebtedness, including the terms of any credit facilities, of which there are currently none, and legal restrictions.

there are no restrictions on the ability of our subsidiaries to make any payments to us, such restrictions may arise in the future.

failure to receive dividends or distributions from our subsidiaries when needed could have a material adverse effect on our business,

results of operations or financial condition.

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Our operations are dependent

upon a relatively small group of individuals and, in particular, our executive officers.

upon a relatively small group of individuals, and particularly our executive officers.

We believe that our success depends on the continued

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impact our business.

If we fail to keep our existing users, to acquire new users, to successfully implement an award-prizes model for our user community, our business, profitability and

prospects may be adversely affected.

If we fail to keep our existing users, to

acquire new users, to successfully implement an award-prizes model for our user community, our business, profitability and prospects may

be adversely affected.

Our success depends on our

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for more details.

We depend to a large extent on our ability to develop and maintain the intellectual property rights relating to our

existing portfolio of prizing, promotion and financial technologies that enable brands to reach the rapidly growing competitive gaming

audience of players, spectators and broadcasters.

We have devoted considerable time and energy to the development and improvement of our

portfolio of prizing, promotion and financial technologies intellectual property.

We depend largely on our ability to develop and maintain the intellectual property rights relating to our existing portfolio

of prizing, promotion and financial technologies that enable brands to reach the rapidly growing competitive gaming audience of players,

spectators and broadcasters.

We have devoted considerable time and energy to the development and improvement of our portfolio of prizing,

promotion and financial technologies intellectual property.

We rely primarily on a combination

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In recent years, individuals

and firms have purchased intellectual property assets in order to assert claims of infringement against technology providers and customers

that use such technology.

and firms have purchased intellectual property assets to assert claims of infringement against technology providers and customers that

use such technology.

Any such action naming us or our clients could be costly to defend or lead to an expensive settlement or judgment

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In addition, we rely on third-party

software in providing some of our services and solutions.

software to provide some of our services and solutions.

If we lose our ability to continue using such software for any reason, including

in the event that the software is found to infringe the rights of others, we will need to obtain substitute software or seek alternative

means of obtaining the technology necessary to continue to provide such services and solutions.

Our inability to replace such software,

or to replace such software in a timely or cost-effective manner, could materially adversely affect our results of operations.

if the software is found to infringe the rights of others, we will need to obtain substitute software or seek alternative means of obtaining

the technology necessary to continue to provide such services and solutions.

Our inability to replace such software, or to replace such

software in a timely or cost-effective manner, could materially adversely affect our results of operations.

Third parties may register trademarks or

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If the number of our end-users increases and more

user data are generated on our platform, we may be required to expand and adjust our technology and infrastructure to continue to reliably

user data is generated on our platform, we may be required to expand and adjust our technology and infrastructure to continue to reliably

store and process content.

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any of which may have a material adverse effect on our business, financial condition and results of operations.

We are considering a number of strategic

alternatives, which could have an adverse impact on our business or the price of our common shares.

We are considering a number of strategic alternatives

focused on maximizing shareholder value.

These strategic alternatives include, but are not limited to, an acquisition, merger, reverse

merger, sale of assets, strategic partnership, capital raise or other transaction, any of which may involve a change in our business plan.

There can be no assurance that this process will result in the approval or completion of any particular strategic alternative or transaction

in the future, or that any such strategic alternative or transaction, if approved or completed, will yield additional shareholder value.

Further, the process of exploring, reviewing, and pursuing strategic alternatives could adversely impact our business or the price of

its common shares.

Risks Related to International Operations

The risks related to international operations,

in particular in countries outside of the United States, could negatively affect our results.

We expect to incur up

to 10% of our total expenses from transactions denominated in currencies other than the United States dollar, such as the Canadian

As such, our operations may be adversely affected by changes in foreign government policies and legislation or social

instability and other factors which are not within our control, including, but not limited to, recessions in foreign economies,

expropriation, nationalization and limitation or restriction on repatriation of funds, assets or earnings, longer receivables

collection periods and greater difficulty in collecting accounts receivable, changes in consumer tastes and trends, renegotiation or

nullification of existing contracts or licenses, changes in gaming policies, regulatory requirements or the personnel administering

them, currency fluctuations and devaluations, exchange controls, economic sanctions and royalty and tax increases, risk of terrorist

activities, revolution, border disputes, implementation of tariffs and other trade barriers and protectionist practices, taxation

policies, including royalty and tax increases and retroactive tax claims, volatility of financial markets and fluctuations in

foreign exchange rates, difficulties in the protection of intellectual property particularly in countries with fewer intellectual

property protections, the effects that evolving regulations regarding data privacy may have on our online operations, adverse

changes in the creditworthiness of parties with whom we have significant receivables or forward currency exchange contracts, labor

disputes and other risks arising out of foreign governmental sovereignty over the areas in which our operations are conducted.

operations may also be adversely affected by social, political and economic instability and by laws and policies of such foreign

jurisdictions affecting foreign trade, taxation and investment.

If our operations are disrupted and/or the economic integrity of our

contracts is threatened for unexpected reasons, our business may be harmed.

Our international activities may require protracted negotiations with

host governments, national companies and third parties.

Foreign government regulations may favor or require the awarding of contracts

to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction.

event of a dispute arising in connection with our operations in a foreign jurisdiction where we conduct our business, we may be subject

to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions of the courts

of United States or enforcing United States judgments in such other jurisdictions.

We may also be hindered or prevented from enforcing

our rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity.

Accordingly, our activities in

foreign jurisdictions could be substantially affected by factors beyond our control, any of which could have a material adverse effect

Doing business in the industries

in which we operate often requires compliance with numerous and extensive procedures and formalities.

These procedures and formalities

may result in unexpected or lengthy delays in commencing important business activities.

In some cases, failure to follow such formalities

or obtain relevant evidence may call into question the validity of the entity or the actions taken.

Our management is unable to predict

the effect of additional corporate and regulatory formalities which may be adopted in the future including whether any such laws or regulations

would materially increase our cost of doing business or affect our operations in any area.

We may in the future enter

into agreements and conduct activities outside of the jurisdictions where we currently carry on business, which expansion may present

challenges and risks that we have not faced in the past, any of which could adversely affect our results of operations and/or our financial

We are subject to foreign exchange and currency

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We are exposed to currency exchange rate fluctuations because portions of our revenue

and expenses are denominated in currencies other than the United States dollar, particularly the Canadian dollar.

Exchange rate fluctuations

could adversely affect our operating results and cash flows and the value of our assets outside of the United States.

If a foreign currency

is devalued in a jurisdiction in which we are paid in such currency, then our customers may be required to pay higher amounts for our

products or services, which they may be unable or unwilling to pay.

Changes in exchange rates and our limited ability or inability to

successfully hedge exchange rate risk could have an adverse impact on our liquidity and results of operations.

and expenses are denominated in currencies other than the United States dollar.

Exchange rate fluctuations could adversely affect our

operating results and cash flows and the value of our assets outside of the United States.

If a foreign currency is devalued in a jurisdiction

in which we are paid in such currency, then our customers may be required to pay higher amounts for our products or services, which they

may be unable or unwilling to pay.

Changes in exchange rates and our limited ability or inability to successfully hedge exchange rate

risk could have an adverse impact on our liquidity and results of operations.

We may be unable to operate in new jurisdictions

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in any jurisdiction where our customers access our systems.

To expand into any such jurisdiction we may need to operate according to local

To expand into any such jurisdiction, we may need to operate according to

local regulations.

In some cases, this may require us to be licensed or obtain approvals for our products or services.

If we do not receive

or receive a revocation of a license in a particular jurisdiction for our products or services, we would not be able to sell or place

our products or services in that jurisdiction.

Any such outcome could materially and adversely affect our results of operations and any

growth plans for our business.

or receive a revocation of a license in a particular jurisdiction for our products or services, we will not be able to sell or place our

products or services in that jurisdiction.

Any such outcome could materially and adversely affect our results of operations and any growth

plans for our business.

Privacy concerns could result in regulatory

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applicable privacy regulations, any of which could adversely affect our business, liquidity and results of operations.

Our results of operations could be affected

by natural events in the locations in which we operate or where our customers or suppliers operate.

Our results of operations could be affected by natural events

in the locations in which we operate or where our customers or suppliers operate.

We, our customers, and our

suppliers have operations in locations subject to natural occurrences such as severe weather and other geological events, including hurricanes,

earthquakes, or flood that could disrupt operations.

earthquakes, or floods that could disrupt operations.

Any serious disruption at any of our facilities or the facilities of our customers

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In addition, any natural disaster

that results in a prolonged disruption to the operations of our customers or suppliers may adversely affect our business, results of operations

or financial condition.

that results in a prolonged disruption to the operations of our customers or suppliers may adversely affect our business, results of

operations or financial condition.

Risks Related to Regulation

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that we have violated any anti-corruption laws could have a material adverse impact on our business.

Changes in trade sanctions laws may

restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned entities.

Changes in trade sanctions laws

may restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned entities.

Violations of these laws and

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The adoption of new laws or regulations relating

to the internet, or particular applications or interpretations of existing laws, could decrease the growth in the use of the internet,

decrease the demand for our services, increase our cost of doing business or could otherwise have a material adverse effect on our business,

revenues, operating results and financial condition.

to the internet, or applications or interpretations of existing laws, could decrease the growth in the use of the internet, decrease

the demand for our services, increase our cost of doing business or could otherwise have a material adverse effect on our business, revenues,

operating results and financial condition.

Risks Related to Our Common Shares and Our Warrants

We are subject to the continued listing

criteria of Nasdaq, and our failure to satisfy these criteria may result in delisting of our common shares or Unit A Warrants from The

Nasdaq Capital Market and could also jeopardize our continued ability to trade in the United States on The Nasdaq Capital Market .

Our common shares and Unit

A Warrants are currently listed for trading on The Nasdaq Capital Market.

In order to maintain the listing on Nasdaq or any other securities

exchange we may trade on, we must maintain certain financial and share distribution targets, including maintaining a minimum number of

public shareholders.

In addition to objective standards, Nasdaq may delist our securities if, in the exchange’s opinion, our financial

condition and/or operating results appear unsatisfactory;

if it appears that the extent of public distribution or the aggregate market

value of the security has become so reduced as to make continued listing inadvisable;

if we sell or dispose of our principal operating

assets or cease to be an operating company;

if we fail to comply with the listing requirements;

or if any other event occurs or any condition

exists which, in their opinion, makes continued listing on the exchange inadvisable.

If the Nasdaq were to delist our common shares, investors may face

material adverse consequences, including, but not limited to, a lack of trading market for our common shares, reduced liquidity, decreased

analyst coverage, and/or an inability for us to obtain additional financing to fund our operations.

The trading price of our common shares has

been, and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of

which are beyond our control.

Our share price is highly volatile.

During the period from January 1, 2023 to December 31, 2023, the closing price of our common shares ranged from a high of $26.56

per share to a low of $2.37 per share.

The stock market in general has experienced extreme volatility that has often been unrelated to

the operating performance of particular companies;

however, the fluctuation in the price of our common shares is still larger than the

stock market in general.

As a result of this volatility, you may not be able to sell your common shares at or above the price at which

you purchased your common shares and you may lose some or all of your investment.

If we are unable to regain compliance with

the listing requirements of the Nasdaq Capital Market, our common stock may be delisted from the Nasdaq Capital Market which could have

a material adverse effect on our financial condition and could make it difficult for you to sell your shares.

Our common stock is listed on Nasdaq, and we

are therefore subject to its continued listing requirements, including requirements with respect to the market value of publicly held

shares, market value of listed shares, minimum bid price per share, minimum stockholders’ equity, annual meetings of shareholders,

among others, and requirements relating to board and committee independence.

If we fail to satisfy one or more of the requirements, we

may be delisted from the Nasdaq Capital Market.

We are currently not in compliance with the annual

meeting of shareholders threshold, however, have been granted an extension until June 30 th 2025 to regain compliance.

be hosting an annual meeting by such time, which will correct our non-compliance and enable our continued listing on Nasdaq and the requirement

that we should have held a 2024 annual meeting of shareholders.

In the event we do not regain compliance with

those requirements, our securities may be delisted from Nasdaq.

Delisting from the Nasdaq Capital Market may adversely affect our ability

to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors

to trade our securities and may negatively affect the value and liquidity of our common stock.

Delisting also could have other negative

results, including the potential loss of employee confidence, the loss of institutional investors or interest in business development

opportunities.

If we are delisted from Nasdaq and we are not able to list our common stock on another exchange, our common stock could

be quoted on the OTC Bulletin Board or in the “pink sheets.” As a result, we could face significant adverse consequences

including, among others:

● a limited availability of market

quotations for our securities;

● a determination that our common

stock is a “penny stock” which will require brokers trading in our common stock

to adhere to more stringent rules and possibly result in a reduced level of trading activity

in the secondary trading market for our securities;

● a limited amount of news and little

or no analyst coverage for us;

● an inability to qualify for exemptions

from state securities registration requirements, which may require us to comply with applicable

state securities laws;

● a decreased ability to issue additional

securities (including pursuant to registration statements on Form S-3) or obtain additional

financing in the future.

There can be no assurance, however, that we will

be able to regain compliance with Nasdaq rules, and even if we do, there can be no assurance that we will be able to maintain compliance

with the continued listing requirements or that our common stock will not be delisted in the future.

In addition, we may be unable to

meet other applicable listing requirements.

The trading price of our common shares

has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some

of which are beyond our control.

Our share price is highly

During the period from January 1, 2023 to December 31, 2024, the closing price of our common shares ranged from a high

of $3.95 per share to a low of $1.09 per share.

The stock market in general has experienced extreme volatility that has often been unrelated

to the operating performance of companies;

however, the fluctuation in the price of our common shares is still larger than the stock

market in general.

As a result of this volatility, you may not be able to sell your common shares at or above the price at which you

purchased your common shares and you may lose some or all of your investment.

In addition to the general volatility risks of the market,

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No assurance can be given that an active market in our common shares will develop or be sustained.

The market prices of our common shares and

Unit A Warrants are likely to be highly volatile because of several factors, including a limited public float.

The market prices of our common shares

and Unit A Warrants are likely to be highly volatile because of several factors, including a limited public float.

The market prices of our common

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be highly volatile in the future.

You may not be able to resell our common shares or Unit A Warrants following periods of volatility because

of the market’s adverse reaction to volatility.

You may not be able to resell our common shares or Unit A Warrants following periods of volatility

because of the market’s adverse reaction to volatility.

Other factors that could cause

such volatility may include, among other things:

or anticipated fluctuations in our operating results;

absence of securities analysts covering us and distributing research and recommendations about us;

may have a low trading volume for a number of reasons, including that a large portion of our stock is closely held;

stock market fluctuations;

● announcements

concerning our business or those of our competitors;

or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms;

or trends in the industry;

● litigation;

in market valuations of other similar companies;

sales of common shares;

of key personnel or failure to hire key personnel;

market conditions.

actual or anticipated fluctuations

in our operating results;

the absence of securities

analysts covering us and distributing research and recommendations about us;

we may have a low trading

volume for several reasons, including that a large portion of our stock is closely held;

overall stock market fluctuations;

announcements concerning

our business or those of our competitors;

actual or perceived limitations

on our ability to raise capital when we require it, and to raise such capital on favorable terms;

conditions or trends in

the industry;

changes in market valuations

of other similar companies;

future sales of common

departure of key personnel

or failure to hire key personnel;

general market conditions.

Any of these factors could

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Unit A Warrants, regardless of our actual operating performance.

One shareholder

owns a significant percentage of our common shares and will be able to exert significant control over matters subject to shareholder approval.

shareholder, Cronus Equity Capital Group, LLC (“Cronus”), beneficially owns 39.50 %

of our outstanding common shares, which allows Cronus to exert substantial influence over matters such as electing directors and approving

mergers or other business combination transactions.

As a result, Cronus possesses substantial ability to impact our management and affairs

and the outcome of matters submitted to shareholders for approval.

In addition, this concentration of ownership and voting power may discourage,

delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their

common shares as part of a sale of our company and might reduce the price of our common shares.

These actions may be taken even if they

are opposed by our other shareholders.

Two shareholders

own a significant percentage of our common shares and will be able to exert significant control over matters subject to shareholder approval.

Cronus Equity Capital Group, LLC (“Cronus”), beneficially

owns 20.20% of our outstanding common shares, and ASPIS Cyber Technologies, Inc (“ASPIS”), beneficially owns 43.97%

of our outstanding common shares, which allows Cronus and ASPIS to exert substantial influence over matters such as electing directors

and approving mergers or other business combination transactions.

As a result, Cronus and ASPIS possesses a substantial ability to impact

our management and affairs and the outcome of matters submitted to shareholders for approval.

In addition, this concentration of ownership

and voting power may discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity

to receive a premium for their common shares as part of a sale of our company and might reduce the price of our common shares.

These actions

may be taken even if they are opposed by our other shareholders.

See “Principal Shareholders” for more information.

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were a “penny stock” under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below

While our common shares and Unit A Warrants are not currently considered “penny stock” because they are listed on

The Nasdaq Capital Market, if we are unable to maintain that listing and our common shares and/or our Unit A Warrants are no longer listed

on The Nasdaq Capital Market, unless we maintain a per-share price above $5.00, our common shares and/or Unit A Warrants will be considered

“penny stock.” These rules impose additional sales practice requirements on broker-dealers that recommend the purchase or

sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.”

For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks.

Broker-dealers

must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document

that provides information about penny stocks and the risks in the penny stock market.

The broker-dealer also must provide the customer

with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction,

furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special

written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement

to the transaction.

While our common shares and Unit A Warrants are not currently considered “penny stock” because they are listed

on The Nasdaq Capital Market, if we are unable to maintain that listing and our common shares and/or our Unit A Warrants are no longer

listed on The Nasdaq Capital Market, unless we maintain a per-share price above $5.00, our common shares and/or Unit A Warrants will

be considered “penny stock.” These rules impose additional sales practice requirements on broker-dealers that recommend the

purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited

investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks.

Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure

document that provides information about penny stocks and the risks in the penny stock market.

The broker-dealer also must provide the

customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson

in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account,

provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s

written agreement to the transaction.

Legal remedies available to

an investor in “penny stocks” may include the following:

a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities

laws, the investor may be able to cancel the purchase and receive a refund of the investment.

a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that

committed the fraud for damages.

If a “penny stock”

is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may

be able to cancel the purchase and receive a refund of the investment.

If a “penny stock”

is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for

These requirements may have

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may have a limited market and, consequently, limited liquidity.

We can give no assurance at what time, if ever, our common shares or our

Unit A Warrants will not be classified as a “penny stock” in the future.

We can give no assurance at what time, if ever, our common shares or

our Unit A Warrants will not be classified as a “penny stock” in the future.

We may continue to be subject to Canadian income tax liabilities

that may adversely affect our working capital.

Following our continuation from being a Canadian

corporation to being incorporated under the laws of the State of Delaware, Canadian tax law has deemed us to have disposed of all of

our property at its fair market value, which may cause net taxable capital gains and income for which we may incur Canadian tax liability.

Furthermore, if the fair market value of our property immediately before the continuance exceeded the aggregate of our liabilities at

that time and the amount of paid-up capital at that time on all of our issued common shares, we will incur an additional Canadian emigration

tax liability.

The anticipated benefits of our continuation may not be realized.

We incurred direct costs and expenses related

to the continuance, including attorneys’ fees, accountants’ fees, financial printing expenses and filing fees.

While we believe

that the Continuance will result in operational, administrative and other benefits that significantly outweigh the related costs and

expenses, we cannot assure you that those benefits will be realized.

If the benefits of any proposed acquisition

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The stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating

performance of the particular companies affected.

The trading prices and valuations of these stocks, and of our securities, may not be

A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to

be similar to us could depress the price of our common shares and/or Unit A Warrants regardless of our business, prospects, financial

conditions or results of operations.

A decline in the market price of our securities also could adversely affect our ability to issue

additional securities and our ability to obtain additional financing in the future.

performance of the companies affected.

The trading prices and valuations of these stocks, and of our securities, may not be predictable.

A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar

to us could depress the price of our common shares and/or Unit A Warrants regardless of our business, prospects, financial conditions

or results of operations.

A decline in the market price of our securities also could adversely affect our ability to issue additional

securities and our ability to obtain additional financing in the future.

Shares eligible for future sale may adversely

affect the market.

From time to time, certain of our shareholders may be eligible to sell

all or some of their common shares by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under

the Securities Act of 1933, as amended, or the Securities Act, subject to certain limitations.

In general, pursuant to Rule 144, non-affiliate

shareholders may sell freely after six months, subject only to the current public information requirement.

Affiliates may sell after six

months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information, and notice requirements.

the approximately 2,506,015 common shares outstanding as of December 31, 2023, approximately 1,516,112 shares were tradable without restriction.

Given the limited trading of our common shares, resale of even a small number of our common shares pursuant to Rule 144 or an effective

registration statement may adversely affect the market price of our common shares.

From time to time, certain

of our shareholders may be eligible to sell all or some of their common shares by means of ordinary brokerage transactions in the open

market pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, or the Securities Act, subject to certain limitations.

In general, pursuant to Rule 144, non-affiliate shareholders may sell freely after six months, subject only to the current public information

Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public

information, and notice requirements.

Of the approximately 4,901,677 common shares outstanding as of December 31, 2024, approximately

3,176,372 shares were tradable without restriction.

Given the limited trading of our common shares, resale of even a small number of our

common shares pursuant to Rule 144 or an effective registration statement may adversely affect the market price of our common shares.

We have never paid dividends on our common

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We intend to retain future earnings,

if any, to provide funds for operations of our business.

Therefore, any return investors in our common shares may have will be in the

form of appreciation, if any, in the market value of their common shares.

if any, to provide funds for the operations of our business.

Therefore, any return investors in our common shares may have will be in

the form of appreciation, if any, in the market value of their common shares.

See “Dividend Policy.”

Holders of our warrants will have no rights

Holders of our warrants have no rights

as a common shareholder until they acquire our common shares.

Until you acquire our common

shares upon exercise of your warrants, you will have no rights as a shareholder in respect of the common shares underlying such warrants.

Upon exercise of your warrants, you will be entitled to exercise the rights of a common shareholder only as to matters for which the record

date occurs after the exercise date.

Our articles and certain Canadian legislation

contain provisions that may have the effect of delaying or preventing a change in control.

Certain provisions of our

articles could discourage potential acquisition proposals, delay or prevent a change in control and limit the price that certain investors

may be willing to pay for our common shares.

The material differences between the British Columbia Business Corporations Act, or BCBCA,

and Delaware General Corporation Law, or DGCL, that may have the greatest such effect include, but are not limited to, the following:

(i) for certain corporate transactions (such as mergers and amalgamations or amendments to our articles) the BCBCA generally requires

the voting threshold to be a special resolution approved by 66 2/3% of shareholders, whereas DGCL generally only requires a majority vote;

and (ii) under the BCBCA a holder of 5% or more of our common shares can requisition a special meeting of shareholders, whereas such right

does not exist under the DGCL.

In addition, a non-Canadian

must file an application for review with the Minister responsible for the Investment Canada Act and obtain approval of the Minister prior

to acquiring control of a “Canadian Business” within the meaning of the Investment Canada Act, where prescribed financial

thresholds are exceeded.

Finally, limitations on the ability to acquire and hold our common shares may be imposed by the Competition Act

The Competition Act (Canada) establishes a pre-merger notification regime for certain types of merger transactions that exceed

certain statutory shareholding and financial thresholds.

Transactions that are subject to notification cannot be closed until the required

materials are filed and the applicable statutory waiting period has expired or been waived by the Commissioner.

However, the Competition

Act (Canada) permits the Commissioner of Competition to review any acquisition or establishment, directly or indirectly, including through

the acquisition of shares, of control over or of a significant interest in us, whether or not it is subject to mandatory notification.

Otherwise, there are no limitations either under the laws of Canada or British Columbia, or in our articles on the rights of non-Canadians

to hold or vote our common shares.

Any of these provisions may discourage a potential acquirer from proposing or completing a transaction

that may have otherwise presented a premium to our shareholders.

We cannot predict whether investors will find our company and our common

shares less attractive because we are governed by foreign laws.

Because we are a corporation incorporated

under the laws of British Columbia and some of our directors and officers are residents of Canada, it may be difficult for investors in

the United States to enforce civil liabilities against us based solely upon the U.S.

federal securities laws.

Similarly, it may be difficult

for Canadian investors to enforce civil liabilities against our directors and officers residing outside of Canada.

We are a corporation incorporated

under the laws of British Columbia.

Some of our directors and officers or other experts named herein are residents of Canada and all or

a substantial portion of our assets and those of such persons are located outside the United States.

Consequently, it may be difficult

investors to effect service of process within the United States upon us or our directors or officers who are not residents of

the United States, or to realize in the United States upon judgments of courts of the United States predicated upon civil liabilities

under the U.S.

federal securities laws.

Investors should not assume that Canadian courts:

(1) would enforce judgments of U.S.

courts obtained

in actions against us or such persons predicated upon the civil liability provisions of the U.S.

federal securities laws or the securities

or blue sky laws of any state within the United States or (2) would enforce, in original actions, liabilities against us or such persons

predicated upon the U.S.

federal securities laws or any such state securities or blue sky laws.

We have filed with the SEC to redomicile

from British Columbia to Delaware, however the transaction may not be approved by shareholders, or we may abandon the effort before the

transaction is consummated.

We filed an S-4 registration

statement to redomicile from British Columbia to Delaware, but we may not receive shareholder approval to enact the move or we may abandon

the effort before the transaction is consummated.

shares upon exercise of your warrants, you have no rights as a shareholder in respect of the common shares underlying such warrants.

Upon exercise of your warrants, you will be entitled to exercise the rights of a common shareholder only as to matters for which the

record date occurs after the exercise date.

As we are a reporting company under the

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Our compliance

with Section 404 requires that we incur substantial accounting expense and expend significant management efforts.

with Section 404 requires that we incur substantial accounting expenses and expend significant management efforts.

We may need to hire

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Any failure to maintain

internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of

internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results

of operations.

If we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence

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We are an emerging growth company within

the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth

companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with

other public companies.

the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging

growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance

with other public companies.

We are an “emerging

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We could be an emerging growth company

for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common shares

held by non-affiliates exceeds US$700 million as of any November 30 before that time, in which case we would no longer be an emerging

for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common

shares held by non-affiliates exceeds US$700 million as of any November 30 before that time, in which case we would no longer be an emerging

growth company as of the following May 31.

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rely on these exemptions.

If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading

prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the

trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of

the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until

If some investors find our securities less attractive as a result of our reliance on these exemptions, the

trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities

and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1)

of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until

private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class

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growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison

of our consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth

company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting

standards used.

This may make

comparison of our consolidated financial statements with another public company which is neither an emerging growth company nor an emerging

growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences

in accounting standards used.

We will continue to incur increased costs

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requirements of The Nasdaq Capital Market and other applicable securities rules and regulations impose various requirements on public

We are also obligated to file with the Canadian securities regulators similar reports pursuant to securities laws and regulations

applicable in all the provinces and territories of Canada in which we will be a reporting issuer.

Compliance with these laws and regulations

has increased and will continue to increase our legal and financial compliance costs and make some activities more difficult, time-consuming

Our management and other personnel must devote a substantial amount of time to compliance with these requirements.

these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.

For example, these rules and regulations make it more difficult and more expensive for us to obtain directors’ and officers’

liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors.

predict or estimate the amount of additional future costs we will incur as a public company or the timing of such costs.

Holders of our common shares may suffer

adverse tax consequences if we are treated as a passive foreign investment company.

corporation generally

will be treated as a passive foreign investment company, or PFIC, for U.S.

federal income tax purposes, in any taxable year if either

(1) at least 75% of its gross income for such year is passive income (such as interest income) or (2) at least 50% of the value of its

assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held

for the production of passive income.

Based on the current and anticipated composition of the income, assets and operations of the Company

and its subsidiaries, we do not believe that we will be a PFIC for U.S.

federal income tax purposes for the current taxable year or for

future taxable years.

However, the application of the PFIC rules is subject to uncertainty in several respects, and a separate determination

must be made after the close of each taxable year as to whether we are a PFIC for that year.

Changes in the composition of our income

or assets may cause us to become a PFIC.

Accordingly, there can be no assurance that we will not be a PFIC for any taxable year.

are a PFIC for any taxable year during which a U.S.

Holder (as that term is defined below in “Material U.S.

Federal Income Tax Considerations

Holders”) holds our common shares, such U.S.

Holder may be subject to adverse tax consequences.

In particular, absent certain

elections, a U.S.

Holder would generally be subject to U.S.

federal income tax at ordinary income tax rates, plus a possible interest

charge, in respect of a gain derived from a disposition of our common shares, as well as certain distributions by us.

The PFIC rules are

complex, and each prospective investor is strongly urged to consult its tax advisors regarding the application of these rules to such

investor’s particular circumstances.

See “Material United States Federal Income Tax Considerations for U.S.

Compliance with these laws and regulations has increased and will continue to increase our legal and financial compliance

costs and make some activities more difficult, time-consuming or costly.

Our management and other personnel must devote a substantial

amount of time to compliance with these requirements.

Moreover, these rules and regulations increase our legal and financial compliance

costs and make some activities more time-consuming and costly.

For example, these rules and regulations make it more difficult and more

expensive for us to obtain directors’ and officers’ liability insurance, which could make it more difficult for us to attract

and retain qualified members of our board of directors.

We cannot predict or estimate the amount of additional future costs we will incur

as a public company or the timing of such costs.

Changes to tax laws may have an adverse

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CRA, may also have a material adverse effect on our shareholders and their investment in our common shares.

Purchasers of our common shares

should consult their tax advisors regarding the potential tax consequences associated with the acquisition, holding and disposition of

our common shares in their particular circumstances.

Purchasers of our common

shares should consult their tax advisors regarding the potential tax consequences associated with the acquisition, holding and disposition

of our common shares in their circumstances.

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 1A. Risk Factors