VERSES Announces Convertible Debenture Financing of up to C$5,000,000

VANCOUVER, British Columbia, Feb. 27, 2023 (GLOBE NEWSWIRE) -- VERSES Technologies Inc. (NEO:VERS) (OTCQX:VRSSF) ("VERSES'' or the "Company”), a cognitive computing company specializing in the next generation of Artificial Intelligence (AI) solutions, announced a non-brokered private placement of unsecured convertible debentures units of the Company (“Units”) at a price of C$1,000 Unit for gross proceeds of up to C$5,000,000 (the “Private Placement”). Each Unit will consist of: (i) C$1,000 principal amount unsecured convertible debentures of the Issuer (“Convertible Debentures”); and (ii) 350 detachable warrants (“Warrants”) to purchase Class A Subordinate Voting shares of the Issuer (“Shares”).

Each Convertible Debenture will mature on the date that is 12 months from the date of issuance of the Convertible Debenture (the “Maturity Date”). On the Maturity Date, the outstanding principal amount of the Convertible Debentures (the “Principal Amount”) shall be repaid in cash. The Principal Amount shall be convertible, for no additional consideration, upon the closing of an Equity Financing (as defined below) into such number of Equity Securities (as defined below) as is equal to the Principal Amount divided by the Equity Financing Price (as defined below).

For the purposes of this news release, “Equity Securities” means Shares of the Company or any securities convertible into or exercisable or exchangeable for Shares. “Equity Financing” means a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells Equity Securities for aggregate gross proceeds of at least C$10,000,000 on or before the Maturity Date. “Equity Financing Price” means an amount equal to the lowest per-Equity Security selling price of the Equity Securities sold within a 45-day time period from the filing and acceptance of a Price Reservation Form with Neo Exchange Inc. (the “NEO”), if required, and the closing of the first tranche of the Equity Financing, provided however, that in no event shall the Equity Financing Price be lower than the greater of: (i) Maximum Discount to Market Price (as such term is defined under Neo Exchange Inc. policies); and (ii) C$0.80 per Equity Security.

The Convertible Debentures shall bear interest at a rate of 20% per annum from the date of issue, such interest to be paid (i) in cash, or (ii) in-kind in Equity Securities based on the Equity Financing Price. Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months. The interest will be payable in arrears on the earlier of the conversion of the Convertible Debentures and the Maturity Date, less any tax required to be deducted and withheld. If the conversion of the Convertible Debentures occurs prior to the Maturity Date, the holder of the Convertible Debentures shall be entitled to all accrued and outstanding unpaid interest, plus an amount equal to the amount of interest that would have otherwise accrued on the Principal Amount to the Maturity Date but for such prior conversion, provided however that, any amounts which are deemed to be interest under the Convertible Debenture shall in no event exceed the highest rate permissible under any applicable law.

The Principal Amount shall be converted into Equity Securities, subject to regulatory and the NEO approval without payment of additional consideration, on the date on which the Company completes an Equity Financing. In the event that the Company does not complete the Equity Financing on or before the Maturity Date, the Principal Amount and all accrued interest shall be repayable by the Company in cash.

The Convertible Debentures shall be unsecured debt obligations of the Company. Each Convertible Debenture shall rank subordinate to all secured debt obligations of the Company.

Each Warrant will be exercisable into one Share at a price of C$1.00 per share until August 15, 2025. If at any time prior to the expiry date of the Warrants (the “Expiry Date”), the volume-weighted average trading price of the Shares on the NEO (or such other principal exchange or market where the Shares are then listed or quoted for trading) exceeds C$2.00, as adjusted in accordance with the terms of the certificate representing the Warrants (the “Warrant Certificates”), for a period of 10 consecutive trading days, the Company may, at its option, accelerate the Expiry Date to the date that is 30 days following the written notice to the holders of the Warrants, in the form of a press release or other form of notice permitted by the Warrant Certificates.

The Company anticipates closing an initial tranche of the Private Placement on February 28, 2023. The proceeds from the Private Placement are intended to be used for general working capital purposes. The Private Placement is subject to acceptance by the NEO. All securities issued pursuant to the Private Placement, and any securities convertible thereunder, will be subject to a four month hold period from the date of issue.

VERSES may pay a fee to eligible finders in connection with the Private Placement comprised of: (i) a fee payable in cash equal to up to 8.0% of the gross proceeds raised in the Private Placement by investors introduced by the applicable finder; and (ii) such number of warrants (the “Broker Warrants”) equal to up to 8.0% of quotient obtained by dividing (X) the aggregate principal amount of the Convertible Debentures sold to subscribers introduced by the applicable finder by (Y) the closing market price on the date immediately preceding closing of the Private Placement. Each Broker Warrant will entitle the holder thereof to acquire one Share at an exercise price of C$1.00 until August 15, 2025 or on such other terms as required by the NEO.

VERSES is a cognitive computing company specializing in next-generation Artificial Intelligence. Modeled after natural systems and the design principles of the human brain and the human experience, VERSES' flagship offering, KOSM™, is a network operating system enabling distributed intelligence. Built on open standards, KOSM transforms disparate data into a universal context that fosters trustworthy collaboration between humans, machines, and AI, across digital and physical domains. Imagine a smarter world that elevates human potential through innovations inspired by nature. Learn more at VERSES, LinkedIn, and Twitter.

On Behalf of the Company
Gabriel René
VERSES Technologies Inc.
Co-Founder & CEO

Media and Investor Relations Inquiries
Leo Karabelas
Focus Communications

The NEO has not reviewed or approved this press release for the adequacy or accuracy of its contents.

Forward-Looking Statements Cautionary Note

This release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs of management of the Company regarding future events. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as “intends” or “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would” or “occur”. This information and these statements, referred to herein as "forward-looking statements", are not historical facts, are made as of the date of this news release and include without limitation, statements regarding discussions of future plans, estimates and forecasts and statements as to management's expectations and intentions with respect to, among other things, the securities offered under the Private Placement, the completion of the Private Placement, the use of proceeds from the Private Placement and the payment of finders’ fees.. In making the forward-looking statements in this news release, the Company has applied several material assumptions, including without limitation, that the Company will obtain approval of the Private Placement from the NEO in a timely manner.

These forward-looking statements involve numerous risks and uncertainties, and actual results might differ materially from results suggested in any forward-looking statements. These risks and uncertainties include, among other things, risks relating to the Company being unable to obtain approval of the Private Placement from the NEO, unanticipated costs and other risk factors disclosed in the Company’s disclosure record on under the Company’s profile. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are incorporated by reference herein, except in accordance with applicable securities laws.

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