Versus Systems Inc. Stock Compensation Disclosure

10.	SHARE CAPITAL

 

a)

Authorized share capital

 

The Company is authorized to issue an unlimited number of Class A Shares. The Class A Shares do not have any special rights or restrictions attached. As of December 31, 2024 and 2023, there were 0 and 0 Class A Shares issued and outstanding, respectively. The Class A shares were converted to common shares on December 22, 2023.

 

b)

Issued share capital

 

During the year ended December 31, 2024, the Company:

 

i)

Issued 2,155,172 shares at a price of $1.16 per share for total proceeds of $2,500,000 as a result of the conversion of the Senior Note, net of issuance cost of $106,768.

 

ii)

Issued 240,490 common shares pursuant to exercise of 240,490 warrants at a price of $3.68 per share for total proceeds of $885,003.

 

During the year ended December 31, 2023, the Company:

 

i)

Issued 156,238 shares at a price of $14.40 per share for total proceeds of $2,250,000 in a registered direct offering. In connection with the offering, the Company incurred $226,545 in issuance costs as part of the transaction.

 

ii)

Issued 283,875 common shares pursuant to exercise of 283,875 warrants at a price of $17.37 per share for total proceeds of $4,561,200.

 

iii)

Issued 815,217 shares at a price of $3.68 per share for total proceeds of $3,000,000 in a registered direct offering. In connection with the offering, the Company incurred $453,345 in issuance costs as part of the transaction.

 

ix)

Issued 989,903 shares at a price of $2.59 per share for total proceeds of $2,562,660 in a private placement.

 

xi)

Issued 21 shares upon the conversion of Class A shares.

 

c)

Stock options

 

The Company may grant incentive stock options to its officers, directors, employees, and consultants. The Company has implemented a rolling Stock Option Plan (the “Plan”) whereby the Company can issue up to 10% of the issued and outstanding common shares of the Company. Options have a maximum term of ten years and vesting is determined by the Board of Directors.

A continuity schedule of outstanding stock options is as follows:

 

		Number Outstanding				Weighted Average Exercise Price
						($)
Outstanding – December 31, 2022			14,238				594.08
Granted			25,000				14.40
Exercised			-				-
Forfeited			(10,247	)			392.60
Outstanding – December 31, 2023			28,990				165.38
Forfeited			(26,435	)			135.62
Outstanding – December 31, 2024			2,555				64.99

 

During the year ended December 31, 2023, no stock options were granted by the Company, and the Company recorded share-based compensation of $160,865 relating to options vested during the period. As of December 31, 2024, there was approximately none of unrecognized compensation cost related to outstanding unvested stock options.

 

During the year ended December 31, 2023, 25,000 stock options were granted by the Company, and the Company recorded share-based compensation of ($1,452,380) relating to options vested during the period.

 

The Company used the following assumptions in calculating the fair value of stock options for the period ended:

 

		December 31, 2024				December 31, 2023
Risk-free interest rate			-				3.93%
Expected life of options			-				3.69 years
Expected dividend yield			-				Nil
Volatility			-				132.65%

d)

Warrants outstanding

 

During the year ended December 31, 2024, the Company:

 

i)

Issued 1,077,586 warrants in conjunction with the conversion of the Senior Note issuance, with an exercise price of $4.00 per share.

 

During the year ended December 31, 2023, the Company:

 

iv)

Issued 10,938 placement agent warrants in conjunction with a registered direct offering on February 2, 2023, with an exercise price of $14.40 per share.

 

v)

Issued 815,217 warrants in conjunction with a public offering on October 17, 2023, with an exercise price of $3.68 per share.

 

vi)

Issued 24,457 placement agent warrants in conjunction with a public offering on October 17, 2023, with an exercise price of $4.05 per share.

 

The Company used the following assumptions in calculating the fair value of the warrants for the period ended:

 

		December 31, 2024		December 31, 2023
Risk-free interest rate		4.43%		4.13% - 4.49%
Expected life of warrants		5 years		2.06 – 4.80 years
Expected dividend yield		Nil		Nil
Volatility		132.78%		132.78%
Weighted average fair value per warrant		$1.71		$4.69

 

At December 31, 2024, the Company had share purchase warrants outstanding as follows:

 

Expiration Date		Warrants Outstanding				Exercise Price				Weighted Average Remaining Life
						($)				(years)
January 20, 2026(1)			7,030				1,800.00				1.06
February 28, 2027			20,689				460.80				2.16
December 6, 2027			13,781				20.00				2.93
December 9, 2027			9,876				17.60				2.94
January 18, 2028			25,906				124.80				3.05
February 2, 2028			10,938				14.40				3.10
October 17, 2028			543,468				3.68				3.80
October 17, 2028			24,457				4.05				3.80
December 24, 2029			1,077,586				4.00				4.92
			1,733,741				32.36				4.45

 

(1)

Unit A warrant balance is 7,030 as of December 31, 2024 and 2023.