Versus Systems enters funding, technology licensing agreement with Aspis

Versus Systems announced the execution of two significant agreements with Aspis Cyber Technologies, a cloud-based mobile endpoint cybersecurity technology firm. Aspis is affiliated with Cronus Equity Capital Group which holds approximately 39.5% of the company’s outstanding common stock. A significant shareholder of Cronus is also a shareholder of Aspis, reinforcing the strategic alignment between the entities. In addition, a director of the company is also a director of Aspis and owns an equity interest in Aspis. The first agreement, a business funding agreement, provides for Aspis to invest $2.5M in Versus Systems. Under the funding agreement, Aspis has initially invested $500,000, and on or before November 15, Aspis will invest the balance of $2M. In exchange for the investment, the company has issued Aspis an unsecured convertible promissory note with a principal balance of $2.5M. The note is convertible into units with each unit comprised of one common share and one warrant to purchase one half of one common share at an exercise price of $4.00 per share. The note may also be paid in cash at the option of Aspis. The note will not be convertible by the holder unless and until the company obtains approval from its shareholders of the issuance of the equity under the note and of the company’s redomiciling to Delaware. The conversion price for the note will be at least $1.16 but will be determined by the greater of the 5-day volume-weighted average price, including the date prior to the initial funding, and $1.16. The company anticipates that it will hold its annual meeting to seek shareholder approval in December. The note is a senior note and will bear simple interest on the amounts funded at the rate of 10% per annum. The second agreement, a technology licensing and software development agreement, enables Aspis to license Versus Systems’ gamification, engagement, and QR code technology for integration into its cybersecurity offerings, particularly in sectors such as government, finance, gaming, and social media in exchange for a monthly license fee paid to the company. Aspis will also compensate the company for any updates or innovations related to this technology. These agreements form the foundation of the company’s compliance plan, submitted to Nasdaq on October 7 to address the company’s requirement to maintain a minimum of $2.5M in shareholders’ equity for continued listing on Nasdaq Capital Market, as outlined in Nasdaq Listing Rule 5550. Through these agreements, Versus Systems aims to exceed the required minimum shareholders’ equity, ensuring compliance until at least September 30, 2025. The company cannot provide any guarantee or assurances, however, that it will exceed or continue to meet the minimum shareholders’ equity requirement.