Versus Systems Inc. (NASDAQ:VS) has reportedly addressed compliance issues raised by The Nasdaq Capital Market, according to a recent 8-K filing. The technology company, which specializes in computer processing and data preparation, with a market capitalization of just $6.43 million, was previously cited for deficiencies in stockholders' equity and for not holding an annual shareholder meeting as required by Nasdaq's listing rules. According to InvestingPro data, the company has faced significant challenges, with revenue declining nearly 80% in the last twelve months.
The company believes it has regained compliance regarding the stockholders' equity deficiency. On December 23, 2024, Versus Systems completed a transaction that involved the sale and issuance of 2,155,172 common shares and additional warrants to purchase 1,077,586 shares upon the conversion of a $2.5 million promissory note. This move increased the company's stockholders' equity, surpassing Nasdaq's minimum requirement.
However, Nasdaq has indicated that it will continue to monitor Versus Systems' compliance with the stockholders' equity requirement. The company could face delisting if it fails to maintain compliance in its next periodic report.
Furthermore, on January 6, 2025, Nasdaq issued another letter of deficiency to Versus Systems for failing to conduct an annual meeting of shareholders in 2024. In response, the company plans to hold a combined annual meeting for the years 2024 and 2025 in the second quarter of 2025 to rectify this issue.
Nasdaq has given Versus Systems until February 20, 2025, to submit a plan to regain compliance with the annual meeting requirement. If the plan is accepted, the company may be granted an extension until June 30, 2025, to meet this obligation. Versus Systems has expressed its intention to convene the required shareholder meeting within the second quarter of 2025, aiming to regain compliance with Nasdaq's regulations.
Investors are monitoring the situation as the company works to align with Nasdaq's listing standards and maintain its position on the exchange. Despite recent challenges, the stock has shown strong momentum with a 26.49% return over the past six months. InvestingPro analysis suggests the stock may be undervalued at current levels, though investors should note that analysts anticipate continued sales decline this year.
The information in this article is based on a press release statement and InvestingPro data, which offers 10 additional investment tips for VS stock.
In other recent news, Versus Systems Inc. has seen substantial corporate transformations and financial developments. The company recently completed a corporate transition, moving its incorporation from British Columbia to Delaware, and issued 2,155,172 new common shares connected to a $2.5 million promissory note conversion held by ASPIS Cyber Technologies. This move aligns with Versus Systems' broader strategy to align its corporate structure with business objectives.
Recent earnings reports showed a decrease in 3Q24 revenue to $3,848, a drop from both the previous quarter and year. In response to this, analyst firm H.C. Wainwright reduced Versus Systems' price target to $2.00 while maintaining a neutral rating.
The company has also made significant governance changes, with Aric Spitulnik joining its board of directors. Versus Systems is now working towards regaining full compliance with Nasdaq listing rules following these corporate governance adjustments.
In terms of partnerships, Versus Systems secured a licensing agreement with Aspis Cyber Technologies. Aspis will utilize Versus' gamification and QR code technology for a monthly fee of $165,000 starting in 2025, and will also invest $2.5 million in Versus Systems. This could potentially lead to Aspis owning an estimated 45.8% of Versus' outstanding common stock.
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