Versus Systems Inc. (VS) Stock Explodes on Strategic Partnerships
Versus Systems, a company specializing in gamification, engagement, and QR code technology, is experiencing a dramatic surge in its stock price, with VS shares rocketing over 300% in premarket trading on Wednesday. The driving force behind this significant jump is the announcement of two strategic agreements with Aspis Cyber Technologies, Inc. (ASPIS), a company affiliated with Cronus Equity Capital Group, LLC, which holds a substantial 39.5% stake in Versus Systems.
A Dual-Pronged Strategy: Funding and Technology Licensing
The first agreement is a Business Funding Agreement, under which ASPIS will invest a total of $2.5 million in Versus Systems. An initial investment of $500,000 has already been made, with the remaining $2 million expected by November 15, 2024. In exchange for this investment, Versus Systems has issued an unsecured convertible promissory note for $2.5 million. This note can be converted into units, each containing one common share and a warrant for half a share, at an exercise price of $4.00. This conversion requires shareholder approval, which is scheduled to be sought at the company’s annual meeting in December 2024.
The second agreement is a licensing agreement that allows ASPIS to utilize Versus Systems’ innovative gamification, engagement, and QR code technology for its cybersecurity solutions. ASPIS will pay a monthly licensing fee and compensate for any technology updates or innovations. This partnership will enable ASPIS to enhance its cybersecurity offerings across various sectors, including government, finance, gaming, and social media.
Boosting Nasdaq Compliance and Ensuring Future Growth
These agreements play a pivotal role in supporting Versus Systems’ compliance plan, submitted to Nasdaq on October 7, 2024, to maintain the required $2.5 million in shareholders’ equity for continued listing on The Nasdaq Capital Market. By exceeding this minimum threshold, the company aims to ensure compliance until at least September 30, 2025. Furthermore, the agreements outline a potential scenario where, upon shareholder approval of the equity issuance and redomiciling to Delaware, ASPIS could convert the Note and exercise the warrants, resulting in a substantial ownership stake in Versus Systems. This could potentially grant ASPIS approximately 45.8% of Versus Systems’ outstanding common stock, excluding shares from warrant exercises or conversions of accrued cash interest into units.
A Promising Outlook and Upcoming Milestones
The License Agreement establishes a monthly fee of $165,000, commencing in January 2025, allowing ASPIS to utilize any modifications to the licensed technology for cybersecurity purposes. Nasdaq will review Versus Systems’ compliance plan. If the plan is not accepted or compliance is not met by February 18, 2025, delisting proceedings may begin. In such a scenario, Versus reserves the right to request a hearing for an additional extension.
The surge in VS shares is a testament to the strategic value these partnerships bring to Versus Systems. By securing significant funding and leveraging its technology to address the growing demand for robust cybersecurity solutions, the company is poised for sustained growth and success in the years to come.