Versus Systems Inc F-1/A, filed Nov 15, 2022

Versus Systems Inc. (VS)

F-1/A 2022-11-15

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British Columbia		7374		Not Applicable
(State or other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

	Per Unit(2)	Total
Public offering price	$	$
Underwriting discounts and commissions(1)	$	$
Proceeds, before expenses, to us	$	$

		Page
ABOUT THIS PROSPECTUS		ii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		iii
PROSPECTUS SUMMARY		1
RISK FACTORS		9
CURRENCY AND EXCHANGE RATE INFORMATION		11
USE OF PROCEEDS		12
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS		13
DILUTION		14
CAPITALIZATION		16
DESCRIPTION OF SECURITIES		17
MEMORANDUM AND ARTICLES OF ASSOCIATION		21
SHARES ELIGIBLE FOR FUTURE SALE		38
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS		40
CANADIAN TAX IMPLICATIONS FOR NON-CANADIAN HOLDERS		47
UNDERWRITING		49
LEGAL MATTERS		52
EXPERTS		52
EXPENSES		52
ENFORCEMENT OF CIVIL LIABILITIES		53
WHERE YOU CAN FIND ADDITIONAL INFORMATION		54
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE		55

Name of Subsidiary	Country of Incorporation	Proportion of Ownership Interest
Versus Systems (Holdco), Inc.	United States of America	81.9	%
Versus Systems UK, Ltd	United Kingdom	81.9	%
Versus, LLC	United States of America	81.9	%
Xcite Interactive, Inc.	United States of America	100	%

Issuer		Versus Systems Inc.
Units offered by us:		1,198,630 units each consisting of one common share and one warrant to purchase one and a half common shares at an assumed public offering price of $2.92 per unit, which represents the last reported sale price of our common shares as reported on Nasdaq on November 11, 2022.
Pre-funded warrants offered by us:		We are also offering to certain purchasers whose purchase of common shares in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common shares immediately following the consummation of this offering, the opportunity to purchase, if such purchasers so choose, pre-funded warrants, in lieu of common shares that would otherwise result in any such purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common shares. Each pre-funded warrant will be exercisable for one common share. The purchase price of each pre-funded warrant and the accompanying warrant will equal the price at which the common shares and the accompanying warrant are being sold to the public in this offering, minus $0.0001, and the exercise price of each pre-funded warrant will be $0.0001 per share. The pre-funded warrants will be exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full. This offering also relates to the common shares issuable upon exercise of any pre-funded warrants sold in this offering. For each pre-funded warrant we sell, the number of common shares we are offering will be decreased on a one-for-one basis. Because we will issue one warrant for each common share and for each pre-funded warrant to purchase one common share sold in this offering, the number of warrants sold in this offering will not change as a result of a change in the mix of the common shares and pre-funded warrants sold. For additional information, see “Description of Securities”.
Warrants offered by us:		The warrant included within the unit is exercisable immediately and has an exercise price equal to $2.92 per common share (100% of the assumed public offering price of one unit), which represents the last reported sale price of our common shares as reported on Nasdaq on November 11, 2022. The warrants will expire five years from the date of issuance. The common shares and the warrants comprising the units are immediately separable upon issuance and will be issued separately in this offering. This offering also relates to the common shares issuable upon exercise of any warrants sold in this offering. For additional information, see “Description of Securities”.

Assumed Public Offering Price:		$2.92 per unit, which represents the last reported sale price of our common shares as reported on Nasdaq on November 11, 2022.
Common shares outstanding before the offering:		2,072,254 common shares.
Common shares to be outstanding after the offering:		3,270,884 excluding 1,797,945 common shares issuable upon exercise of the warrants sold in this offering and any securities that would be issued if the underwriters’ over-allotment option is exercised.
Overallotment option:		We have granted the representative of the underwriters a 45-day option to purchase up to 179,795 additional common shares and/or warrants to purchase up to 269,692 additional common shares at a public offering price reflected above, solely to cover over-allotments, if any.
Use of Proceeds:		We intend to use the net proceeds of this offering for working capital and general corporate purposes, including marketing and sale expenses, the costs and expenses of continuing development of our engagement and rewards platform and salaries and wages. See “Use of Proceeds.”
Representative Warrants		The registration statement of which this prospectus is a part also registers for sale warrants (the “Representative Warrants”) to purchase 241,225 common shares (equal to 7.0% of the total number of securities included in the units sold in this offering) to Roth Capital Partners, LLC (the “Representative”), as representative of the underwriters in the offering, as a portion of the compensation payable to the Representative in connection with this offering. The Representative Warrants will be immediately exercisable at an exercise price of $2.92 (100% of the assumed public offering price per unit), which represents the last reported sale price of our common shares as reported on Nasdaq on November 11, 2022. The Representative Warrants expire on the fifth anniversary of the commencement of sales of this offering. See “Underwriting” section on page 49.
Risk Factors:		Investing in our securities is highly speculative and involves a high degree of risk. You should carefully consider the information set forth in the “Risk Factors” section beginning on page 9 before deciding to invest in our securities.
Trading Symbol:		Our common shares are listed on The Nasdaq Capital Market under the symbol “VS”. There is no established public trading market for the warrants or pre-funded warrants, and we do not expect such markets to develop. In addition, we do not intend to apply for a listing of the warrants or pre-funded warrants on any national securities exchange or any other trading system.
Lock-up:		We and our directors, officers and certain of our principal shareholders have agreed with the underwriters not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our common shares or securities convertible into common shares for a period of 90 days after the date of this prospectus. See “Underwriting” section on page 49.

	Period End	Period Average	Low	High
	(C$ per US$)
Year Ended December 31:
2016	1.3426	1.3243	1.2544	1.4592
2017	1.2517	1.2984	1.2131	1.3745
2018	1.3644	1.2957	1.2280	1.3650
2019	1.2962	1.3269	1.2962	1.3591
2020	1.2753	1.3422	1.2715	1.4539
2021	1.2777	1.2533	1.2031	1.2941
2022:
January	1.2694	1.2622	1.2462	1.2757
February	1.2662	1.2711	1.2647	1.2840
March	1.2482	1.2660	1.2482	1.2893
April	1.2802	1.2628	1.2452	1.2831
May	1.2639	1.2859	1.2639	1.3055
June	1.2871	1.2804	1.2524	1.3054
July	1.2801	1.2936	1.2801	1.3100
August	1.3091	1.2917	1.2744	1.3091
September	1.3752	1.3339	1.2976	1.3752
October	1.3639	1.3689	1.3532	1.3873

Assumed public offering price per common share				$	2.92
Net tangible book value per share as of September 30, 2022	$	(1.09	)
Increase in net tangible book value attributed to sale of common share and common share equivalents subsequent to September 30, 2022		0.76
Pro forma net tangible book value after giving effect to sale of common share and common share equivalents subsequent to September 30, 2022		(0.33	)
Increase in pro forma net tangible book value per share attributed to the investors purchasing shares issued in this offering		1.03
Adjusted pro forma net tangible book value per share after giving effect to this offering					0.70
Dilution to net tangible book value per share to new investors purchasing shares in this offering				$	2.22

	Actual (unaudited)			Pro forma (unaudited)
Cash and Cash Equivalents	$	1,029,301		$	5,128,674
Liabilities:
Notes payable		2,562,810			2,562,810
Total liabilities		3,600,105			3,600,105
Equity
Share capital
Common shares, no par value; unlimited shares authorized and 1,659,962 shares issued and outstanding on an actual basis, 3,270,884 shares issued and outstanding on a pro forma basis		119,650,950			123,750,323
Class A shares; 338 shares authorized and 338 issued and outstanding on an actual and on a pro forma and a pro forma as adjusted basis		28,247			28,247
Reserves		14,200,425			14,200,425
Cumulative translation adjustment		156,600			156,600
Deficit		(113,962,608	)		(113,962,608	)
Total Equity before non-controlling interest		20,073,614			24,172,987
Non-controlling interest		(5,932,235	)		(5,932,235	)
Total Equity		14,141,379			18,240,752
Total Liabilities and Equity	$	17,741,484		$	21,840,857

Number of Share Purchase Warrants	Exercise Price (USD$)		Expiry Date
40,750	$	73.35	November 17, 2022
112,489	$	112.50	January 20, 2026
331,042	$	28.80	February 28, 2027
414,500	$	7.80	January 18, 2028
898,781

		Delaware		British Columbia
Stockholder/Shareholder Approval of Business Combinations; Fundamental Changes		Under the DGCL, certain fundamental changes such as amendments to the certificate of incorporation, a merger, consolidation, sale, lease, exchange or other disposition of all or substantially all of the property of a corporation not in the usual and regular course of the corporation’s business, or a dissolution of the corporation, are generally required to be approved by the holders of a majority of the outstanding stock entitled to vote on the matter, unless the certificate of incorporation requires a higher percentage.		Under the BCBCA and our articles, certain changes to our authorized share structure and the change of our name maybe approved by a resolution of the directors our company. Under the BCBCA and our articles, certain extraordinary company alterations, such as to continuances, into or out of province, certain amalgamations, sales, leases or other dispositions of all or substantially all of the undertaking of a company (other than in the ordinary course of business), liquidations, dissolutions, and certain arrangements are required to be approved by ordinary or special resolution as applicable.

	Delaware	British Columbia
	transaction in which the stockholder becomes an interested stockholder; (ii) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or (iii) the board of directors and the holders of at least two-thirds of the outstanding voting stock not owned by the interested stockholder approve the business combination on or after the time of the transaction in which the person became an interested stockholder.
	For the purpose of Section 203, the DGCL, subject to specified exceptions, generally defines an interested stockholder to include any person who, together with that person’s affiliates or associates, (i) owns 15% or more of the outstanding voting stock of the corporation (including any rights to acquire stock pursuant to an option, warrant, agreement, arrangement or understanding, or upon the exercise of conversion or exchange rights, and stock with respect to which the person has voting rights only), or (ii) is an affiliate or associate of the corporation and owned 15% or more of the outstanding voting stock of the corporation at any time within the previous three years.
Appraisal Rights; Rights to Dissent	Under the DGCL, a stockholder of a corporation participating in some types of major corporate transactions may, under varying circumstances, be entitled to appraisal rights pursuant to which the stockholder may receive cash in the amount of the fair market value of his or her shares in lieu of the consideration he or she would otherwise receive in the transaction.	The BCBCA provides that shareholders of a company are entitled to exercise dissent rights in respect of certain matters and to be paid the fair value of their shares in connection therewith. The dissent right is applicable where the company resolves to (i) alter its articles to alter the restrictions on the powers of the company or on the business it is permitted to carry on; (ii) approve certain amalgamations;

	Delaware	British Columbia
Stockholder/Shareholder Consent to Action Without Meeting	Under the DGCL, unless otherwise provided in the certificate of incorporation, any action that can be taken at a meeting of the stockholders may be taken without a meeting if written consent to the action is signed by the holders of outstanding stock having not less than the minimum number of votes necessary to authorize or take the action at a meeting of the stockholders.	Although it is not customary for public companies to do so, under the BCBCA, shareholder action without a meeting may be taken by a consent resolution of shareholders provided that it satisfies the thresholds for approval in a company’s articles, the BCBCA and the regulations thereunder. A consent resolution is as valid and effective as if it was a resolution passed at a meeting of shareholders.
Special Meetings of Stockholders/ Shareholders	Under the DGCL, a special meeting of shareholders may be called by the board of directors or by such persons authorized in the certificate of incorporation or the bylaws.	Under the BCBCA, the holders of not less than 5% of the issued shares of a company that carry the right to vote at a general meeting may requisition that the directors call a meeting of shareholders for the purpose of transacting any business that may be transacted at a general meeting. Upon receiving a requisition that complies with the technical requirements set out in the BCBCA, the directors must, subject to certain limited exceptions, call a meeting of shareholders to be held not more than 4 months after receiving the requisition. If the directors do not call such a meeting within 21 days after receiving the requisition, the requisitioning shareholders or any of them holding in aggregate not less than 2.5% of the issued shares of the company that carry the right to vote at general meetings may call the meeting.
Distributions and Dividends; Repurchases and Redemptions	Under the DGCL, subject to any restrictions contained in the certificate of incorporation, a corporation may pay dividends out of capital surplus or, if there is no surplus, out of net profits for the current and/or the preceding fiscal year in which the dividend is declared, as long as the amount of capital of the corporation following the declaration and payment of the dividend is not less than the aggregate amount of the capital represented by issued and outstanding shares having a preference upon the distribution of assets. Surplus is defined in the DGCL as the excess of the net assets over capital, as such capital may be adjusted by the board.	Under the BCBCA, a company may pay a dividend in money or other property unless there are reasonable grounds for believing that the company is insolvent, or the payment of the dividend would render the company insolvent. The BCBCA provides that no special rights or restrictions attached to a series of any class of shares confer on the series a priority in respect of dividends or return of capital over any other series of shares of the same class. Under the BCBCA, the purchase or other acquisition by a company of its shares is generally subject to solvency tests similar to those

	Delaware	British Columbia
Constitution and Residency Of Directors	The DGCL does not have residency requirements, but a corporation may prescribe qualifications for directors under its certificate of incorporation or bylaws.	The BCBCA does not place any residency restrictions on the boards of directors.
Removal of Directors; Terms of Directors	Under the DGCL, except in the case of a corporation with a classified board or with cumulative voting, any director or the entire board may be removed, with or without cause, by the holders of a majority of the shares entitled to vote at an election of directors.	Our articles allow for the removal of a director by special resolution of the shareholders. According to our articles, all directors cease to hold office immediately before the election or appointment of directors at every annual general meeting, but are eligible for re-election or re- appointment.
Inspection of Books and Records	Under the DGCL, any holder of record of stock or a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may inspect the corporation’s books and records for a proper purpose.	Under the BCBCA, directors and shareholders may, without charge, inspect certain of the records of a company. Former shareholders, to the extent permitted under our articles, and former directors may also inspect certain of the records, free of charge, but only those records pertaining to the times that they were shareholders or directors. Public companies must allow all persons to inspect certain records of the company free of charge.
Amendment of Governing Documents	Under the DGCL, a certificate of incorporation may be amended if: (i) the board of directors adopts a resolution setting forth the proposed amendment, declares the advisability of the amendment and directs that it be submitted to a vote at a meeting of shareholders; provided that unless required by the certificate of incorporation, no meeting or vote is required to adopt an amendment for certain specified changes; and (ii) the holders of a majority of shares of stock entitled to vote on the matter approve the amendment, unless the certificate of incorporation requires the vote of a greater number of shares.	Under the BCBCA, a company may amend its articles or notice of articles by (i) the type of resolution specified in the BCBCA, (ii) if the BCBCA does not specify a type of resolution, then by the type specified in the company’s articles, or (iii) if the company’s articles do not specify a type of resolution, then by special resolution. The BCBCA permits many substantive changes to a company’s articles (such as a change in the company’s authorized share structure or a change in the special rights or restrictions that may be attached to a certain class or series of shares) to be changed by the resolution specified in that company’s articles.

Number of Shares		Date
2,072,254		On the date of this prospectus.
2,858,592		After 91 days from the date of this prospectus (subject, in some cases, to volume limitations).
3,270,884		After 180 days from the date of this prospectus (subject, in some cases, to volume limitations).

Description	Amount
SEC Filing Fee	$	1,789.94
FINRA Filing Fee		2,936.39
Printing Expenses		30,000.00
Accounting Fees and Expenses		50,000.00
Legal Fees and Expenses		60,000.00
Miscellaneous		5,273.67
Total	$	150,000.00

Exhibit Number	Exhibit Description	Incorporation by Reference
Exhibit Number	Exhibit Description	Form	Filing Date	Exhibit Number
23.4*	Consent of Pryor Cashman LLP (included in Exhibit 5.2).
24.1**	Power of Attorney (included on signature page).
99.1	Charter of the Audit Committee.	F-1/A	1/11/2021	99.1
99.2	Charter of the Compensation Committee.	F-1/A	1/11/2021	99.2
99.3	Charter of the Nominating and Corporate Governance Committee.	F-1/A	1/11/2021	99.3
107*	Filing Fee Table

		VERSUS SYSTEMS INC.
		By:		/s/ Matthew Pierce
				Matthew Pierce
				Chief Executive Officer (Principal Executive Officer)

Name	Position	Date
/s/ Matthew Pierce	Chairman and Chief Executive Officer	November 14, 2022
Matthew Pierce	(Principal Executive Officer)
/s/ Craig Finster	Chief Financial Officer	November 14, 2022
Craig Finster	(Principal Financial and Accounting Officer)
/s/ Keyvan Peymani	Director	November 14, 2022
Keyvan Peymani
*	Director	November 14, 2022
Brian Tingle
*	Director	November 14, 2022
Michelle Gahagan
*	Director	November 14, 2022
Paul Vlasic
*	Director	November 14, 2022
Jennifer Prince
*	Director	November 14, 2022
Shannon Pruitt

	Per Unit	Total with no Over-Allotment	Total with Full Over-Allotment
Public offering price	$	$	$
Underwriting discount (7.0%)	$	$	$
Proceeds, before expenses, to us	$	$	$

Underwriters	Closing Shares	Pre-Funded Warrants	Closing Common Warrants	Closing Purchase Price
Roth Capital Partners, LLC

Total

	versus systems inc.

	By:
		Name: Matthew Pierce
		Title: Chief Executive Officer

	COMPUTERSHARE, INC., AND COMPUTERSHARE TRUST COMPANY, N.A. as Warrant Agent

	By:
		Name:
		Title:

Name:
		(Please Print)

Address:		(Please Print)

Phone Number:

Email Address:

Dated: _______________ __, ______

Holder’s Signature:

Holder’s Address:

	2.	When issued and paid for, in such amount as shall be determined pursuant to the Pricing Resolutions, as contemplated in the Registration Statement in accordance with the terms of the Underwriting Agreement filed as Exhibit 1.1 to the Registration Statement, the Pre-Funded Warrants included in the Units will be duly authorized and will be validly issued and fully paid and non-assessable securities of the Company.

	3.	When issued and paid for, in such amount as shall be determined pursuant to the Pricing Resolutions, as contemplated in the Registration Statement in accordance with the terms of the Underwriting Agreement filed as Exhibit 1.1 to the Registration Statement, the Unit Warrants included in the Units will be duly authorized and will be validly issued and fully paid and non-assessable securities of the Company.

	1.	With respect to the Pre-Funded Warrants, provided that (i) the Registration Statement has become effective under the Securities Act (and no stop order suspending the effectiveness of the Registration Statement has been issued) and the Prospectus contained therein has been delivered and filed with the Commission as required by all applicable laws; (ii) the Underwriting Agreement has been duly authorized by the Company and each of the underwriters named therein by all necessary corporate or company action, as applicable; (iii) the Underwriting Agreement is in substantially the form filed as an exhibit to the Registration Statement and has been duly executed and delivered by the Company and each of the underwriters named therein; (iv) the Pre-Funded Warrants are in substantially the form filed as an exhibit to the Registration Statement and have been duly executed and delivered by the Company; (v) the issuance and terms of the Pre-Funded Warrants have been duly authorized by the Company by all necessary corporate action; (vi) the terms of the Pre-Funded Warrants and of their issuance and sale have been duly established in conformity with the Underwriting Agreement and as described in the Registration Statement and the related Prospectus so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company, so as to be in conformity with the Articles and the Notice of Articles, and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company; and (vii) the Pre-Funded Warrants have been duly executed and delivered by the Company against payment therefor pursuant to the Underwriting Agreement, the Pre-Funded Warrants, when issued and sold as contemplated in the Registration Statement and the Prospectus and in accordance with the Underwriting Agreement, will be valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally, and by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity).

	2.	With respect to the Unit Warrants, provided that (i) the Registration Statement has become effective under the Securities Act (and no stop order suspending the effectiveness of the Registration Statement has been issued) and the Prospectus contained therein has been delivered and filed with the Commission as required by all applicable laws; (ii) the Underwriting Agreement has been duly authorized by the Company and each of the underwriters named therein by all necessary corporate or company action, as applicable; (iii) the Underwriting Agreement is in substantially the form filed as an exhibit to the Registration Statement and has been duly executed and delivered by the Company and each of the underwriters named therein; (iv) the Warrant Agreement has been duly authorized by the Company and the Warrant Agent by all necessary corporate action; (v) the Warrant Agreement is in substantially the form filed as an exhibit to the Registration Statement and has been duly executed and delivered by the Company and the Warrant Agent; (vi) the issuance and terms of the Unit Warrants have been duly authorized by the Company by all necessary corporate action; (vii) the terms of the Unit Warrants and of their issuance and sale have been duly established in conformity with the Underwriting Agreement and the Warrant Agreement and as described in the Registration Statement and the related Prospectus so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company, so as to be in conformity with the Articles and the Notice of Articles, and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company; and (viii) the Unit Warrants have been duly executed and delivered by the Company and authenticated by the Warrant Agent pursuant to the Warrant Agreement and delivered against payment therefor pursuant to the Underwriting Agreement, the Unit Warrants, when issued and sold as contemplated in the Registration Statement and the Prospectus and in accordance with the Underwriting Agreement and the Warrant Agreement, will be valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally, and by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity).

Vancouver, Canada	Chartered Professional Accountants

November 14, 2022