Versus Systems (VS) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01As we have incurred recurring losses and negative operating cash flows since our inception, and there is no assurance that we will be able to continue as a going concern absent additional financing, which we may not be able to obtain on favorable terms or at all
2. 02We are an early, commercial-stage company with a limited operating history
3. 03If our products and services fail to achieve and sustain sufficient market acceptance, we will not generate expected revenue and our business may not succeed
4. 04We have a relatively limited operating history and limited revenues to date and thus are subject to risks of business development and you have only a limited basis on which to evaluate our ability to achieve our business objective
5. 05Our recent organizational changes and cost cutting measures are beginning to show promise, however may not be successful
6. 06Future acquisitions or strategic investments could disrupt our business and harm our business, results of operations or financial condition
7. 07We may require additional funding for our growth plans, and such funding may result in a dilution of your investment
8. 08We may not have sufficient capital to fund our ongoing operations, effectively pursue our strategy or sustain our initiatives
9. 09Our operations are significantly dependent on changes in public and customer tastes and discretionary spending patterns. Our inability to successfully anticipate customer preferences or to gain popularity for games may negatively impact our profitability
10. 10If we cannot continue to develop, acquire, market and offer new products and services or enhancements to existing products and services that meet customer requirements, our operating results could suffer
11. 11We have made significant investments in new products and services that may not achieve expected returns
12. 12If we fail to keep up with industry trends or technological developments, our business, results of operations and financial condition may be materially and adversely affected
13. 13We are subject to cybersecurity risks
14. 14We are a holding company and depend upon our subsidiaries for our cash flows
15. 15Our insurance coverage may not adequately protect us against all future risks, which may adversely affect our business and prospects
16. 16Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations
17. 17We are dependent upon our executive officers and their departure could adversely affect our ability to operate
18. 18Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests
19. 19Our business may be harmed if our licensing partners, or other third parties with whom we do business, act in ways that put our brand at risk
20. 20If 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
21. 21Our failure to protect our intellectual property rights may undermine our competitive position
22. 22Our services or solutions could infringe upon the intellectual property rights of others or we might lose our ability to utilize the intellectual property of others
23. 23Our business is highly dependent on the proper functioning and improvement of our information technology systems and infrastructure. Our business and operating results may be harmed by service disruptions, or by our failure to timely and effectively scale up and adjust our existing technology and infrastructure
24. 24We are considering a number of strategic alternatives, which could have an adverse impact on our business or the price of our common shares

Risks Related to International Operations

1. 25We are subject to foreign exchange and currency risks that could adversely affect our operations, and our ability to mitigate our foreign exchange risk through hedging transactions may be limited
2. 26We may be unable to operate in new jurisdictions where our customers operate because of new regulations
3. 27Privacy concerns could result in regulatory changes and impose additional costs and liabilities on us, limit our use of information, and adversely affect our business
4. 28Our results of operations could be affected by natural events in the locations in which we operate or where our customers or suppliers operate

Risks Related to Regulation

1. 29We are subject to various laws relating to trade, export controls, and foreign corrupt practices, the violation of which could adversely affect our operations, reputation, business, prospects, operating results and financial condition
2. 30Regulations that may be adopted with respect to the internet and electronic commerce may decrease the growth in the use of the internet and lead to the decrease in the demand for our services

Risks Related to Our Common Shares and Our Warrants

1. 31If 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
2. 32The 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
3. 33The 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
4. 34Two shareholders own a significant percentage of our common shares and will be able to exert significant control over matters subject to shareholder approval
5. 35We may continue to be subject to Canadian income tax liabilities that may adversely affect our working capital
6. 36The anticipated benefits of our continuation may not be realized
7. 37If the benefits of any proposed acquisition do not meet the expectations of investors, shareholders or financial analysts, the market price of our common shares and/or Unit A Warrants may decline
8. 38Shares eligible for future sale may adversely affect the market
9. 39We have never paid dividends on our common shares and may not do so in the future
10. 40Holders of our warrants have no rights as a common shareholder until they acquire our common shares
11. 41We will continue to incur increased costs as a result of operating as a reporting company under the Exchange Act, and our management will continue to be required to devote substantial time to compliance with our reporting company responsibilities and corporate governance practices
12. 42Changes to tax laws may have an adverse impact on us and holders of our common shares