Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2024

Commission File Number: 333-282301

VERSES AI INC.

(Translation of registrant’s name into English)

205 - 810 Quayside Drive

New Westminster, British Columbia

Canada V3M 6B9

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

☐ Form 20-F ☒ Form 40-F

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VERSES AI INC.

	By:	/s/ Gabriel René
	Name:	Gabriel René
	Title:	Chief Executive Officer
Date: November 15, 2024

EXHIBIT INDEX

Exhibit No.		Description
99.1		Unaudited Condensed Consolidated Interim Financial Statements for the Three and Six Months Ended September 30, 2024.
99.2		Management’s Discussion and Analysis for the Three and Six Months Ended September 30, 2024.
99.3		Certification of the CEO Pursuant to NI 52-109.
99.4		Certification of the CFO Pursuant to NI 52-109.

Exhibit 99.1

VERSES AI INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2024 and 2023

(Expressed in United States dollars)

VERSES AI INC.

Condensed Consolidated Interim Statements of Financial Position

(Expressed in United States dollars)

		September 30, 2024			March 31, 2024
	Notes	(Unaudited)			(Audited)
ASSETS
CURRENT
Cash and restricted cash	3	$	2,236,498		$	892,727
Accounts receivable			155,000			100,000
Shares subscription receivable	11		2,042,307			-
Due from related parties	9		1,133,383			983,120
Deferred financing costs			-			80,993
Contract assets and unbilled revenue	4, 5		-			1,252,076
Tax receivable			548,896			374,964
Prepaid expenses	14		1,049,640			794,351
			7,165,724			4,478,231
Due from related parties	9		1,201,986			954,150
Equipment	7, 15		203,931			267,259
TOTAL ASSETS		$	8,571,641		$	5,699,640
LIABILITIES
CURRENT
Accounts payable and accrued liabilities	6, 9, 21	$	3,977,199		$	2,865,002
Deferred grant	3		176,030			-
Promissory notes	16		-			2,000,000
Provision for legal claim	21		6,307,258			6,307,258
Restricted share unit liability	8		1,157,224			576,214
Convertible debenture	13		8,495,706			-
			20,113,417			11,748,474
Loans payable	7		139,660			140,904
TOTAL LIABILITIES			20,253,077			11,889,378
SHAREHOLDERS’ DEFICIENCY
Share capital	11		75,323,907			62,570,235
Contributed surplus	8, 9, 12		13,954,019			13,244,512
Accumulated other comprehensive loss			(1,142,932	)		(920,958	)
Deficit			(99,816,430	)		(81,083,527	)
TOTAL SHAREHOLDERS’ DEFICIENCY			(11,681,436	)		(6,189,738	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIENCY		$	8,571,641		$	5,699,640

Approved and authorized for issue on behalf of the Board on November 14, 2024.

“Gabriel Rene”		“Dan Mapes”
Director		Director

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VERSES AI INC.

Condensed Consolidated Interim Statements of Comprehensive Loss

For the three and six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

		Three months ended September 30,						Six months ended September 30,
	Notes	2024			2023			2024			2023
REVENUE	4	$	155,000		$	558,814		$	155,000		$	834,333
COST OF REVENUE			(145,000	)		(474,632	)		(145,000	)		(743,702	)
			10,000			84,182			10,000			90,631
EXPENSES
Accounting fees			200,526			157,403			350,407			272,040
Consulting fees			1,398,831			1,248,158			2,855,032			2,082,956
Depreciation	15		47,857			65,424			93,907			126,234
Investor relations			340,576			786,867			605,993			1,409,316
Legal fees			426,198			360,629			864,112			709,217
Management fees	9		59,455			-			84,581			-
Marketing			292,969			1,215,893			1,199,050			2,658,515
Office and general			508,713			550,236			940,979			898,189
Personnel expenses	9		908,304			1,366,762			1,762,012			2,058,128
Provision for contract settlement	4, 5		-			-			1,252,076			-
Rent			24,741			8,163			60,079			10,383
Research and development			4,166,763			2,240,965			8,261,915			4,222,339
Share based payments	8, 9, 11		1,740,224			(80,819	)		1,961,724			965,393
Travel and meals			150,672			211,237			275,036			441,131
			(10,265,829	)		(8,130,918	)		(20,566,903	)		(15,853,841	)
OTHER ITEMS:
Interest expense	7, 13		(221,720	)		(58,428	)		(293,038	)		(344,628	)
Accretion expense	13		(411,813	)		(36,089	)		(453,839	)		(203,918	)
Other income	19		35,147			146,186			49,970			178,186
Grant income	3		56,034			-			56,034			-
Gain on derivative liability	13		2,464,873			-			2,464,873			-
NET LOSS			(8,333,308	)		(7,995,067	)		(18,732,903	)		(16,133,570	)
Foreign exchange difference			(134,465	)		(189,332	)		(221,974	)		(189,332	)
NET COMPREHENSIVE LOSS		$	(8,467,773	)	$	(8,184,399	)	$	(18,954,877	)	$	(16,322,902	)
Loss Per Class A Subordinate Voting Shares - Basic and Diluted		$	(0.05	)	$	(0.06	)	$	(0.14	)	$	(0.13	)
Loss Per Class B Proportionate Voting Shares - Basic and Diluted		$	Nil		$	(0.37	)		$Nil		$	(0.78	)
Weighted Average Number of Class A Subordinate Voting Shares - Basic and Diluted			156,068,423			75,495,559			132,455,199			68,046,105
Weighted Average Number of Class B Proportionate Voting Shares - Basic and Diluted			-			10,000,000			-			10,000,000

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VERSES AI INC.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Deficiency

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

	Number of Class B Proportionate Voting Shares			Number of Class A Subordinate Voting Shares		Share Capital			Contributed Surplus			Obligation to Issue Shares			Accumulated Other Comprehensive Loss			Deficit			Total Shareholders’ Deficiency
Balance, March 31, 2023		10,000,000			55,805,937	$	30,264,179		$	5,606,507		$	83,456		$	(636,527	)	$	(34,476,242	)	$	841,373
Exercise of options and warrants		-			11,859,442		9,435,874			(906,528	)		(83,456	)		-			-			8,445,890
Issuance of units for cash		-			4,878,048		7,491,999			-			-			-			-			7,491,999
Private placement issuance costs		-			50,000		(1,593,214	)		697,807			-			-			-			(895,407	)
Conversion of convertible debentures (net)		-			4,372,648		5,699,420			(98,048	)		-			-			-			5,601,372
Stock options granted		-			-		-			479,610			-			-			-			479,610
Modification of finders’ warrants		-			-		-			440,604			-			-			-			440,604
Special warrants issued		-			-		-			-			10,026,270			-			-			10,026,270
Special warrants issuance costs		-			-		-			782,626			(1,584,795	)		-			-			(802,169	)
Foreign exchange difference		-			-		-			-			-			(189,332	)		-			(189,332	)
Net loss		-			-		-			-			-			-			(16,133,570	)		(16,133,570	)
Balance, September 30, 2023		10,000,000			76,966,075	$	51,298,258		$	7,002,578		$	8,441,475		$	(825,859	)	$	(50,609,812	)	$	15,306,640
Exercise of options and warrants		-			2,089,679		1,606,701			(213,134	)		-			-			-			1,393,567
Stock options granted		-			-		-			6,455,068			-			-			-			6,455,068
Special warrants converted to shares		-			6,612,849		8,441,475			-			(8,441,475	)		-			-			-
Issuance of shares for settlement		-			200,000		198,801			-			-			-			-			198,801
SAFE conversion to shares		-			675,000		1,025,000			-			-			-			-			1,025,000
Foreign exchange difference		-			-		-			-			-			(95,099	)		-			(95,099	)
Net loss		-			-		-			-			-			-			(30,473,715	)		(30,473,715	)
Balance, March 31, 2024		10,000,000			86,543,603	$	62,570,235		$	13,244,512		$	-		$	(920,958	)	$	(81,083,527	)	$	(6,189,738	)
Exercise of options and warrants		-			2,764,349		2,713,826			(987,543	)		-			-			-			1,726,283
Stock options granted		-			-		-			1,380,843			-			-			-			1,380,843
Conversion of Class B Proportionate Voting shares into Class A Subordinate Voting shares		(10,000,000	)		62,500,000		-			-			-			-			-			-
Shares issued for services		-			50,000		49,714			-			-			-			-			49,714
Special warrants proceeds received		-			-		-			-			7,306,000			-			-			7,306,000
Special warrants issuance costs		-			-		-			181,394			(547,026	)		-			-			(365,632	)
Special warrants converted to shares		-			10,000,000		6,758,974			-			(6,758,974	)		-			-			-
Issuance of units for cash		-			6,250,000		3,686,000			-			-			-			-			3,686,000
Private placement issuance costs		-			-		(454,842	)		134,813			-			-			-			(320,029	)
Net loss		-			-		-			-			-			(221,974	)		(18,732,903	)		(18,954,877	)
Balance, September 30, 2024		-			168,107,952	$	75,323,907		$	13,954,019		$	-		$	(1,142,932	)	$	(99,816,430	)	$	(11,681,436	)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VERSES AI INC.

Condensed Consolidated Interim Statements of Cash Flows

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars)

For the year ended	September 30, 2024			September 30, 2023
Cash provided by (used in):
OPERATING ACTIVITIES
Net loss for the period	$	(18,732,903	)	$	(16,133,570	)
Items not involving cash
Accretion expense		453,839			203,918
Depreciation		93,907			126,234
Fair value gain on derivative liability		(2,464,873	)		-
Foreign exchange effect on convertible debenture		216,334			154,109
Interest expense		293,038			344,628
Issuance of shares for services and advisory units		49,714			61,049
Provision for contract settlement		1,252,076			-
Share based payments		1,961,724			965,393
		(16,877,144	)		(14,278,239	)
Net changes in non-cash working capital items:
Accounts receivable		(55,000	)		(535,000	)
Contract assets and unbilled revenue		-			207,158
Tax receivable		(173,932	)		(116,118	)
Prepaid expenses		(255,289	)		(597,432	)
Deferred financing costs		80,993			-
Deferred grant		(50,847	)		-
Deferred revenue		-			(65,000	)
Accounts payable and accrued liabilities		1,112,197			(151,504	)
Net cash used in operating activities		(16,219,022	)		(15,536,135	)
INVESTING ACTIVITIES
Due from related parties		(398,099	)		(300,287	)
Investment in equipment		(30,579	)		(110,865	)
Net cash used in investing activities		(428,678	)		(411,152	)
FINANCING ACTIVITIES
Deferred grant		226,877			-
Repayments of loans		(2,003,876	)		(3,877	)
Proceeds from issuance of units		1,643,693			7,491,999
Private placement issuance costs		(320,029	)		(956,456	)
Proceeds from issuance of convertible debenture		10,000,000			-
Proceeds from issuance of equity instruments		1,726,283			8,445,890
Proceeds from issuance of special warrants		7,306,000			10,026,270
Special warrants issuance costs		(365,632	)		(802,169	)
Lease payments		-			(66,128	)
Net cash provided by financing activities		18,213,316			24,135,529
Foreign exchange effect on cash		(221,845	)		(189,332	)

Net change in cash during the period		1,343,771			7,998,910
Cash, beginning of the period		892,727			4,397,281
Cash, end of the period	$	2,236,498		$	12,396,191

Supplemental cash flow information (Note 19).

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

1.	NATURE OF BUSINESS AND GOING CONCERN

Chromos Capital Corp. was incorporated under the Business Corporations Act (British Columbia) on November 19, 2020. On June 17, 2021, Chromos Capital Corp. changed its name to Verses Technologies Inc. On March 31, 2023, Verses Technologies Inc. changed its name to Verses AI Inc. (“VAI”, “VERSES” or the “Company”).

VERSES is a cognitive computing company specializing in biologically inspired distributed intelligence. Their flagship offering, Genius^TM, is patterned after natural systems and neuroscience. Key features of Genius^TM include generalizability, predictive queries, real-time adaptation, and an automated computing network. Built on open standards, Genius^TM transforms disparate data into knowledge models that foster trustworthy collaboration between humans, machines, and artificial intelligence, across digital and physical domains.

On June 28, 2022, the Class A Subordinate Voting Shares of the Company (the “Subordinate Voting Shares”) were listed and started trading on the Cboe Canada Exchange (“Cboe Canada”) (“Listing”) under the symbol “VERS”.

On October 4, 2022, the Company announced that the Company’s Subordinate Voting Shares have commenced trading on the OTCQX® Best Market, an over-the-counter public market in the United States, under the ticker symbol “VRSSF”. VERSES will continue to trade on Cboe Canada in Canada, as its primary listing.

The Company’s head office and registered and records office is located at 205 - 810 Quayside Drive, New Westminster, British Columbia, V3M 6B9, Canada.

For the six months ended September 30, 2024, the Company incurred a net loss of $18,732,903 (September 30, 2023 - $16,133,570) which was funded by the issuance of convertible debenture, special warrants, issuance of units, and exercises of options and warrants. As of September 30, 2024, the Company has an accumulated deficit of $99,816,430 (March 31, 2024 - $81,083,527). The Company’s ability to continue its operations and to realize its assets at their carrying values is dependent upon obtaining additional financing and generating revenues sufficient to cover its operating costs.

The necessity that the Company raise sufficient funds to carry out its growth plans are conditional, in part, on the continuation of its agreements and investor support. The material uncertainty raised by these events and conditions may cast substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated interim financial statements do not give effect to any adjustments, which would be necessary should the Company be unable to continue as a going concern. In such circumstances, the Company would be required to realize its assets and discharge its liabilities outside of the normal course of business, and the amounts realized could differ materially from those reflected in the accompanying condensed consolidated interim financial statements.

2.	SUMMARY OF MATERIAL ACCOUNTING POLICIES

Statement of compliance

The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting”. They do not include all of the information required for full annual financial statements and should be read in conjunction with the Company’s audited annual consolidated financial statements for the fiscal year ended March 31, 2024, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”).

The condensed consolidated interim financial statements were authorized for issue in accordance with a resolution from the Board of Directors on November 14, 2024.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

2.	SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)

Basis of preparation

These condensed consolidated interim financial statements have been prepared on the historical cost basis, using the accrual basis of accounting, except for cash flow information and certain financial instruments, which are measured at fair value. The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the audited annual consolidated financial statements as of March 31, 2024. The condensed consolidated interim financial statements should be read in conjunction with the Company’s audited annual consolidated financial statements for the year ended March 31, 2024.

Consolidation

These condensed consolidated interim financial statements include the accounts of the Company and its wholly owned subsidiaries. The results of the subsidiaries will continue to be included in the condensed consolidated interim financial statements of the Company until the date that the Company’s control over the subsidiaries ceases. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Details of the Company’s principal subsidiaries at September 30, 2024 and March 31, 2024 are as follows:

Name	Place of Incorporation	September 30, 2024 *Interest*			March 31, 2024 *Interest*
Verses Technologies USA, Inc. (formerly Verses Labs Inc.) (“VTU”)	Wyoming, USA		100	%		100	%
Verses Operations Canada Inc. (“VOC”)	British Columbia, CA		100	%		100	%
Verses Logistics Inc. (“VLOG”)	Wyoming, USA		100	%		100	%
Verses Realities Inc. (“VRI”)	Wyoming, USA		100	%		100	%
Verses Inc. (“VINC”)	Wyoming, USA		100	%		100	%
Verses Health Inc. (“VHE”)	Wyoming, USA		100	%		100	%
Verses Global BV (“VBV”)	Netherlands		100	%		100	%
Verses Solutions Inc (“VSOL”)	Wyoming, USA		100	%		Nil

Significant accounting estimates and judgments

The preparation of these condensed consolidated interim financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated interim financial statements and reported amounts of expenses during the reporting period. These condensed consolidated interim financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the condensed consolidated interim financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes could differ from these estimates.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

2.	SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)

Significant accounting estimates and judgments (continued)

The significant judgements made by management in the Company’s accounting policies and key sources of estimation uncertainty were the same as those applied in the annual audited consolidated financial statements for the year ended March 31, 2024, with the exception of the following:

●

Convertible Debenture – The convertible debenture included an option which can be settled in the Company’s Class A Subordinate Voting Shares. The conversion feature was determined to a derivative instrument and is measured at fair value through profit or loss using the Monte Carlo simulation. The host liability is initially recognized using the residual value method, as the fair value, calculated at the net present value of the liability based upon non-convertible debt issued by comparable companies would have exceeded the principal value of the convertible debenture, and subsequently accounted for at amortized cost using the effective interest rate method. The conversion feature was determined to a derivative instrument and is measured at fair value through profit or loss using the Monte Carlo simulation..

3.	DEFERRED GRANT

The Company’s subsidiary, VBV, entered into a grant agreement (alongside other beneficiaries) with the Horizon Europe, which is delegated under the European Commission, to provide technical expertise on artificial intelligence.

Under the grant agreement, VBV received $226,877 (€209,056) on July 24, 2024, upon the execution of the agreement. The funds under this agreement are to reimburse the Company for amounts spent on the project. The Company is required to submit their costs incurred related to the project and only approved expenses under the project are reimbursed.

Of the expenses incurred, $30,456 (2024 - $Nil) are outstanding in accounts payable and accrued liabilities, with $176,030 (2024 - $Nil) remaining in restricted cash. Grant income of $56,034 was recognized during the period ended September 30, 2024.

Balance, March 31, 2023 and 2024	$	-
Grant received		226,877
Expenses on the project		(56,034	)
Exchange difference		5,187
Balance, end of the period	$	176,030

4.	REVENUE

The Company recognized revenues from contracts with customers in accordance with the following timing under IFRS 15 Revenue from Contracts with Customers.

	Three months ended				Six months ended
	September 30,				September 30,
	2024		2023		2024		2023
Recognized at a point in time (1)	$	155,000	$	218,600	$	155,000	$	218,600
Recognized over the duration of contracts (2)		-		340,214		-		615,733
Total	$	155,000	$	558,814	$	155,000	$	834,333

(1) Includes revenues from completed Proof of Concept contracts (“POCs”).

(2) Includes revenue from Software as a Service (“SaaS”).

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

4.	REVENUE (continued)

On August 14, 2024, the Company announced the existing SaaS contract with its customer was voided by both parties. As a result, the Company has not recognized any revenues related to SaaS services in the current year, and has recorded a provision for the contract settlement for $1,252,076 (Note 5).

5.	CONTRACT ASSETS AND UNBILLED REVENUE

The Company’s contract assets and unbilled revenues are summarized as follows:

	Contract assets			Unbilled revenue			Total
Balance, March 31, 2023	$	156,490		$	1,193,945		$	1,350,435
Additions		-			1,108,131			1,108,131
Invoiced		-			(1,050,000	)		(1,050,000	)
Costs recognized		(156,490	)		-			(156,490	)
Balance, March 31, 2024	$	-		$	1,252,076		$	1,252,076
Provision for contract settlement (Note 4)		-			(1,252,076	)		(1,252,076	)
Balance, September 30, 2024	$	-		$	-		$	-

6.	ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The Company’s accounts payable and accrued liabilities are summarized as follows:

	September 30, 2024		March 31, 2024
Accounts payable	$	2,362,119	$	2,782,502
Accrued liabilities		1,615,080		82,500
	$	3,977,199	$	2,865,002

7.	LOANS PAYABLE

Loan activity consisted of the following:

For the period ended	September 30, 2024			March 31, 2024
Balance, beginning of the period	$	140,904		$	143,331
Repayment		(3,876	)		(7,752	)
Interest expense		2,632			5,325
Balance, end of the period	$	139,660		$	140,904

On June 5, 2020, the Company received a $142,400 loan from the U.S. Small Business Administration. The loan is secured by all tangible and intangible personal property of VTU, and bears interest of 3.75% per annum and requires monthly payments of $646 starting in June 2021 with a maturity of 30 years.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

8.	SHARE BASED PAYMENTS

The Company has an Omnibus Equity Incentive Plan (the “Plan”) available to employees, directors, officers, and consultants with grants under the Plan approved from time to time by the Board of Directors. Under the Plan, the Company is authorized to issue options to purchase an aggregate of up to 25% of the Company’s issued and outstanding Subordinate Voting Shares. Each option can be exercised to acquire one Subordinate Voting Share of the Company. The exercise price for an option granted under the Plan may not be less than the market price at the date of grant.

Options to purchase Subordinate Voting Shares have been granted to directors, employees, and consultants as follows:

Expiry date	Weighted Average Remaining Contractual Life in Years		Exercise Price (CAD$)		Outstanding
June 15, 2027		2.71		0.80		2,800,000
September 16, 2027		2.96		1.00		665,000
April 28, 2028		3.58		1.65		100,000
December 15, 2028		4.21		1.35		9,734,305
April 15, 2029		4.54		1.14		252,500
July 3, 2029		4.76		1.07		4,313,700
		4.06	$	1.18		17,865,505

A summary of the Company’s stock options as at September 30, 2024 and changes for the periods then ended is as follows:

	Number of stock options			Weighted Average Exercise Price (CAD$)
Outstanding, March 31, 2023		6,980,000			0.80
Granted		10,000,000			1.35
Exercised		(2,333,750	)		0.74
Outstanding, March 31, 2024		14,646,250		$	1.19
Granted		4,629,255			1.08
Exercised		(1,200,000	)		0.83
Cancelled		(210,000	)		1.35
Outstanding, September 30, 2024		17,865,505			1.18
Exercisable, September 30, 2024		11,037,730		$	0.85

During the period ended September 30, 2024:

	-	1,000,000 stock options were exercised at an exercise price of CAD$0.80 for the net proceeds of $584,400. The original fair value of these stock options of $513,376 was reclassified from contributed surplus to share capital upon exercise.
	-	200,000 stock options were exercised at an exercise price of CAD$1.00 for the net proceeds of $145,260. The original fair value of these stock options of $102,675 was reclassified from contributed surplus to share capital upon exercise.
	-	210,000 stock options at an exercise price of CAD$1.35 belonging to inactive employees were cancelled according to the Plan. The original fair value of these stock options of $125,621 was reclassified from contributed surplus to share based payments upon cancellation.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

8.	SHARE BASED PAYMENTS (continued)

On July 3, 2024, the Company granted 2,313,700 stock options to employees and independent contractors of the Company with a weighted average exercise price of CAD$1.08, expiring in 5 years, with 25% vesting on the date that is one (1) year from the vesting start date and 6.25% every subsequent quarter. The stock options were fair valued at the end of the period at $1,376,157 of which $457,060 is recognized in the current period using the Black-Scholes option pricing model with the following weighted average assumptions:

Share price at revaluation date		CAD$1.07
Risk-free interest rate		3.57	%
Expected life		5 years
Expected volatility		100	%
Expected forfeitures		0	%
Expected dividends		Nil
Grant date fair value per option	$	0.59

On July 3, 2024, the Company granted 2,000,000 stock options to strategic consultants of the Company with an exercise price of CAD$1.07, expiring in 5 years, where 33.33% stock options vested on the grant date and 33.33% will vest every 6 months after the grant date. The stock options were fair valued at $730,887 of which $570,392 is recognized in the current period using the Black-Scholes option pricing model with the following assumptions:

Share price at grant date		CAD$0.72
Risk-free interest rate		3.57	%
Expected life		5 years
Expected volatility		100	%
Expected forfeitures		0	%
Expected dividends		Nil
Grant date fair value per option	$	0.37

On April 15, 2024, the Company granted 115,000 stock options to employees and independent contractors of the Company with an weighted average exercise price of CAD$1.23, expiring in 5 years, with 25% vesting on the date that is one (1) year from the vesting start date and 6.25% every subsequent quarter. The stock options were fair valued at $72,423 of which $23,392 is recognized in the current period using the Black-Scholes option pricing model with the following assumptions:

Share price at grant date		CAD$1.23
Risk-free interest rate		3.77	%
Expected life		5 years
Expected volatility		100	%
Expected forfeitures		0	%
Expected dividends		Nil
Grant date fair value per option	$	0.63

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

8.	SHARE BASED PAYMENTS (continued)

On April 15, 2024, the Company granted 200,555 stock options to strategic consultants of the Company with an exercise price of CAD$1.14, expiring in 5 years, where 50,185 stock options vested on the grant date, 15,000 stock options will vest on May 1, 2024, and 15,000 stock options will vest at the beginning of every calendar month thereafter; the balance of 370 stock options will vest 33.33% every 6 months after the grant date.

For the period ended September 30, 2024, the Company recognized $53,395 as share-based payment for stock options granted in April 2024 for strategic consultants of the Company. The fair value of stock options is estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

Share price at revaluation date		CAD$0.72
Risk-free interest rate		2.90	%
Expected life		4.5 years
Expected volatility		100	%
Expected forfeitures		0	%
Expected dividends		Nil
Revaluation date fair value per option	$	0.34

On December 15, 2023, the Company granted 9,394,670 stock options to employees and strategic consultants of the Company with an exercise price of CAD$1.35, expiring in 5 years, where 4,676,035 stock options are vested on the grant date, based on previous commitments, and 6.25% every subsequent quarter.

For the period ended September 30, 2024, the Company recognized $538,965 as share-based payment for stock options granted in December 2023 using the graded vesting method over the vesting period.

On December 15, 2023, the Company granted 505,330 stock options to strategic consultants of the Company with an exercise price of CAD$1.35, expiring in 5 years, where 33.33% stock options vested on December 30, 2024, and 33.33% every 6 months thereafter.

For the period ended September 30, 2024, the Company derecognized $94,006 as share-based payment for stock options granted in December 2023. The fair value of stock options is estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

Share price at revaluation date		CAD$0.72
Risk-free interest rate		2.90	%
Expected life		4.2 years
Expected volatility		100	%
Expected forfeitures		0	%
Expected dividends		Nil
Revaluation date fair value per option	$	0.33

On April 28, 2023, the Company granted 100,000 stock options to a strategic consultant of the Company with an exercise price of CAD$1.65, expiring in 5 years, where 50,000 stock options vest 6 months after the grant date and 50,000 vests 12 months after the grant date.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

8.	SHARE BASED PAYMENTS (continued)

For the period ended September 30, 2024, the Company derecognized $42,734 as share-based payment for stock options granted in April 2023 for strategic consultants of the Company. The fair value of stock options is estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

Share price at revaluation date		CAD$0.72
Risk-free interest rate		2.90	%
Expected life		3.6 years
Expected volatility		100	%
Expected forfeitures		0	%
Expected dividends		Nil
Revaluation date fair value per option	$	0.28

Included in the Plan, the Company may grant RSUs to employees, directors, officers, and consultants. The RSUs can be settled at the election of the holder for Subordinate Voting Shares, cash, or a combination of Subordinate Voting Shares and cash. The RSUs were determined to be a liability instrument, and the fair value will be recognized as an expense using the graded vesting method over the vesting period.

On September 13, 2024, the Company granted 2,000,000 RSUs to a director of the Company with no exercise price or expiry date, vesting 666,672 within one year of the grant date and 8.33% every three months afterwards. The RSUs were fair valued on day of grant at $1,066,752 based on the market price of one Subordinate Voting Share on the date of issuance of which $33,469 is recognized in the current period using the graded vesting system.

On July 3, 2024, the Company granted 9,715,000 RSUs to a strategic consultant of the Company (50,000), directors (450,000), and employees of the Company (9,215,000), with no exercise price or expiry date, vesting 33,33% within one year of the grant date and 33.33% every one year afterwards. The RSUs were fair valued on the day of grant at $7,700,653 based on the market price of one Subordinate Voting Share on the date of issuance of which $772,136 is recognized in the current period using the graded vesting system.

On June 20, 2024, the Company granted 1,000,000 RSUs to a strategic investor of the Company, with no exercise price or expiry date, vesting equal installments of 10,000 RSU’s for every CAD$100,000 in revenue derived by the Company from commercial agreements it enters into with affiliates of the strategic investor. No value was attributed to these RSUs as the vesting is still uncertain.

On April 15, 2024, the Company granted 50,000 RSUs to a strategic consultant of the Company, with no exercise price or expiry date, vesting 100% on the grant date.

For the period ended September 30, 2024, the Company revalued the RSUs granted on April 15, 2024 based on the market price of one Subordinate Voting Share on the revaluation date. The Company recognized $26,668 as share-based payment for RSUs in the current period.

On November 15, 2023, the Company granted 150,000 RSUs to a strategic consultant of the Company, with no exercise price, with expiry date of 10 years from the grant date, vesting 33.33% on the grant date, 33.33% on December 28, 2023, and 33.33% on March 28, 2024.

For the period ended September 30, 2024, the Company revalued the RSUs granted on November 15, 2023. The RSUs were fair valued at $80,006 (March 31, 2024 - $142,449) based on the market price of one Subordinate Voting Share on the revaluation date. The Company derecognized $78,016 as share-based payment for RSUs in the current period.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

8.	SHARE BASED PAYMENTS (continued)

During the year ended March 31, 2023, 500,000 RSUs were granted to a director, with no exercise price or expiry date, vesting 1/3 on the first anniversary of the Listing and 1/3 each subsequent anniversary thereafter (Note 8). The RSUs were fair valued on day of grant at $309,400 based on the market price of one Subordinate Voting Share on the date of issuance. At September 30, 2024, the RSUs were valued at a fair value of $244,945 (March 31, 2024 - $433,765) based on the market price of one Subordinate Voting Share on revaluation date and the Company derecognized $173,376 as share-based payment for RSUs in the current period.

	Number of RSUs
Balance, March 31, 2023		500,000
Issued, November 15, 2023		150,000
Balance, March 31, 2024		650,000
Issued, April 15, 2024		50,000
Issued, June 20, 2024		1,000,000
Issued, July 3, 2024		9,715,000
Issued, September 13, 2024		2,000,000
Balance, September 30, 2024		13,415,000
Exercisable, September 30, 2024		700,000

A reconciliation of share based payments is as follows:

Share based payments	Stock Options			RSUs			Modification of broker’s warrants		Total
Previous year graded vesting		418,450			-			-		418,450
New grants April 2023		53,067			-			-		53,067
Revaluation RSUs 2023		-			53,272			-		53,272
Modification of broker’s warrants		-			-			440,604		440,604
Balance, September 30, 2023	$	471,517		$	53,272		$	440,604	$	965,393

Previous years graded vesting		402,225			-			-		402,225
Revaluation RSUs 2023		-			(251,392	)		-		(251,392	)
New grants April 2024		76,787			26,668			-		103,455
New grants July 2024		1,027,452			805,605			-		1,833,057
Cancelled options		(125,621	)		-			-		(125,621	)
Balance, September 30, 2024	$	1,380,843		$	580,881		$	-	$	1,961,724

9.	RELATED PARTY TRANSACTIONS AND BALANCES

The Company’s related parties consist of the directors, executive officers, and companies controlled by them. Transactions are measured at the exchange amount, which is the amount agreed to by the parties.

Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and senior officers.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

9.	RELATED PARTY TRANSACTIONS AND BALANCES (continued)

During the three and six months ended September 30, 2024 and 2023, related party transactions were as follows:

	Three months ended					Six months ended
	September 30,					September 30,
	2024		2023			2024			2023
Management fees	$	59,455	$	-		$	84,581		$	-
Management salaries and benefits included in personnel expenses		464,884		455,970			770,635			727,507
Share-based payments (Note 8)		34,914		(90,197	)		(67,827	)		225,288
	$	559,253	$	365,773		$	787,389		$	952,795

Included in accounts payable and accrued liabilities at September 30, 2024 were amounts totaling $42,500 (March 31, 2024 – $21,073) due to the a former director of the Company, for services provided as Chairman Emeritus and International Director of Global Partnerships, and $5,000 (March 31, 2024 - $Nil) due to the new Chairman of the Company.

Included in due from related parties at September 30, 2024 were amounts totaling $2,268,857 (March 31, 2024 - $1,872,334) due from companies controlled by key management personnel. These amounts are unsecured and interest-free.

Also, included in due from related parties, is a loan of $66,512 (March 31, 2024 - $64,936) to a key member of the management team that is unsecured and has an annual interest rate of 5% and requires principal and interest to be paid in full by May 1, 2033. No repayments were made in the period ended September 30, 2024.

On December 15, 2023, the Company granted 50,000 stock options to the Chief Operating Officer of the Company with an exercise price of CAD$1.35, expiring in 5 years, where 25% stock options will vest within one year of the grant date, and 6.25% every subsequent quarter. The stock options were fair valued at $38,203 of which $3,685 (September 30, 2023 - $nil) is recognized in the current period using the Black-Scholes option pricing model (Note 8).

On July 3, 2024, the Company granted 100,000 stock options to the Chief Operating Officer and 50,000 to the Chief Financial Officer of the Company with an exercise price of CAD$1.07, expiring in 5 years, where 25% stock options will vest within one year of the grant date, and 6.25% every subsequent quarter. The stock options were fair valued at $89,355 of which $28,656 (September 30, 2023 - $nil) is recognized in the current period using the Black-Scholes option pricing model (Note 8).

On July 3, 2024, the Company granted 50,000 RSUs to the Chief Financial Officer and 450,000 to the independent directors of the Company, with no exercise price or expiry date, vesting 33,33% within one year of the grant date and 33.33% every one year afterwards. The RSUs were fair valued on day of grant at $266,688 based on the market price of one Subordinate Voting Share on September 30, 2024, of which $39,739 is recognized in the current period using the graded vesting system.

At September 30, 2024, the RSUs granted to a director in the year ended March 31, 2023, were valued at a fair value of $266,688 (September 30, 2023 - $347,716) based on the market price of one Subordinate Voting Share on revaluation date, of which $105,104 (September 30, 2023 - $45,179) is derecognized in the current period.

At September 30, 2024, the stock options granted in prior periods to the directors recognized as an expense in the current period using the graded vesting method over the vesting period is $Nil (September 30, 2023 - $164,918).

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

10.

COMMITMENTS

The Company has an obligation to pay royalties to Cyberlab, LLC (“Cyberlab”) (a company controlled by a director and officer). Cyberlab shall be entitled to receive a share of the gross revenue derived from the sales, licensing, and other commercial activities involving Spatial Domain Names, pursuant to the following schedule:

	-	Years 1 through 10 of the Spatial Domain Program: Cyberlab shall be entitled to retain Five Percent (5%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Five Percent (95%) to allocate between itself and other Spatial Domain Program stakeholders (e.g., registries, registrars, etc.) as it sees fit.
	-	Years 11 through 14 of the Spatial Domain Program: Cyberlab shall be entitled to retain Four Percent (4%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Six Percent (96%).
	-	Years 15 through 17 of the Spatial Domain Program: Cyberlab shall be entitled to retain Three Percent (3%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Seven Percent (97%).
	-	Years 18 and 19 of the Spatial Domain Program: Cyberlab shall be entitled to retain Two Percent (2%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Eight Percent (98%).
	-	Years 20 to 25 of the Spatial Domain Program: Cyberlab shall be entitled to retain One Percent (1%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Nine Percent (99%).

As of September 30, 2024, no amounts are payable under the royalty agreement.

The Company is obligated to grant stock options (“Options”), deferred share units (“DSU”), or restricted stock units (“RSU”) to qualifying consultants and employees based on their respective contracts, to be determined at grant date based on the market price of the Company’s shares. As at September 30, 2024 the outstanding commitment balance is 37,500 (March 31, 2024 – 8,965,855) to be granted as options, RSUs or DSUs.

The Company has also entered into severance agreements with executives of the Company. In the case of involuntary termination or a change in control, the executives are entitled to a monetary payment equal to 12 month’s worth of base salary, continuation for 12 months of medical and dental insurance, and immediate, accelerated vesting of all stock options, equity, and related compensation.

11.

SHARE CAPITAL

Authorized shares

Effective July 20, 2021, the Company amended its Articles to create an unlimited number of Class A Subordinate Voting Shares and unlimited number of Class B Proportionate Voting Shares. Each Subordinate Voting Share shall entitle the holder thereof to one vote. Each Class B share shall entitle the holder thereof to 6.25 votes and such proportionate dividends and liquidation rights. Each Class B share is convertible, at the option of the holder, into 6.25 Subordinate Voting Shares.

On May 30, 2024, 10,000,000 Class B Proportionate Voting Shares were converted into 62,500,000 Subordinate Voting Shares

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

11.

SHARE CAPITAL (continued)

Issued

During the period ended September 30, 2024, the following equity instruments were exercised for gross proceeds of CAD$2,328,599:

	-	585,600 warrants with an exercise price of CAD$1.00.
	-	978,749 warrants with an exercise price of CAD$0.80.
	-	1,000,000 stock options with an exercise price of CAD$0.80.
	-	200,000 stock options with an exercise price of CAD$0.80.

The reclassification from contributed surplus from the exercises of warrants and stock options was $987,543.

On April 9, 2024, 50,000 shares were issued to a strategic consultant of the Company. The shares were fair valued at $49,714 considering the share price of CAD$1.35 stated in the consulting agreement.

In July and August 2024, the Company converted 10,000,000 Special Warrants units into 10,000,000 Subordinate Voting Shares and 4,999,998 warrants (Note 12).

On September 26, 2024, the Company closed the first tranche offering of 6,250,000 units (the “Units”) of the Company, for gross proceeds of $3,686,000 (the “LIFE Offering”), of which $2,042,307 was fully received subsequent of September 30, 2024.

Each Unit consists of one Class A Subordinate Voting share of the Company (a “Share”) and one-half of one Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will entitle the holder thereof to acquire one Share (each, a “Warrant Share”) at an exercise price of $1.20 per Share, subject to adjustment in certain circumstances, for a period of 36 months from September 26, 2024 (the “Closing Date”).

In connection with the Offering, the Company: (i) paid to certain finders and advisors an aggregate cash commission of $278,772; (ii) issued to certain finders and advisors an aggregate of 285,187 compensation warrants (the “Compensation Warrants”), and (iii) incurred in legal fees of $41,257. Each Compensation Warrant will be exercisable into one Unit at the Offering Price for a period of 36 months following the Closing Date.

12.

WARRANTS

In connection with the issuance of Life Offering the Company issued 3,125,000 warrants and 285,187 Compensation Warrants (Note 11).

The total fair value of the broker warrants was $134,813, estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

Share price at grant date	CAD$0.73
Risk-free interest rate	2.90	%
Expected life	3 years
Expected volatility (based on comparable publicly listed entities)	100	%
Expected dividends	Nil

On April 18, 2024, the Company announced a non-brokered private placement of special warrants (“Special Warrants”) for gross proceeds of up to CAD$10,000,000 through the sale of 10,000,000 Special Warrants at a price of CAD$1.00 per Special Warrant.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

12.

WARRANTS (continued)

Each Special Warrant shall convert into one Unit of the Company (a “Unit”) at no additional cost upon the earlier of: (i) the Company obtaining a receipt from the applicable securities commission(s) in Canada for the final prospectus qualifying the distribution of the Units to be issued upon exercise or deemed exercise of the Special Warrants; and (ii) the date that is four months and a day after date of issuance of the Special Warrants.

Each Unit is comprised of one Subordinate Voting Share (a “Unit Share”), and one-half of one Class A Subordinate Voting Share purchase warrant (each full warrant, a “Unit Warrant”). Each Unit Warrant shall be exercisable into one Subordinate Voting Share (a “Unit Warrant Share”) at a price of CAD$1.50 per Unit Warrant Share for a period of two (2) years from the date of issue of the Unit Warrants.

The proceeds received from the Special Warrants are to be used for general corporate and working capital purposes, for the continued development of Genius^TM and the release of the Genius beta program, and the repayment of outstanding loans. In particular, US$2,000,000 of the proceeds received will be used to repay the outstanding principal amount of loans accepted by VTU, from two arms’-length investors (Note 16). All securities issued pursuant to the Private Placement will be subject to a four-month hold period from the date of issue.

The Company completed the issuance of 10,000,000 Units for gross proceeds of CAD$10,000,000 and paid fees to eligible finders consisting of: (i) CAD$317,286; and (ii) 316,536 finder warrants (the “Finder Warrants”). Each Finders Warrant will be exercisable into one unit (a “Finder Unit”) at a price of CAD$1.00 per Finder Unit until the date that is two (2) years from the date of issue of the Finder Warrants, which Finder Unit will be comprised of a Subordinate Voting Share and one-half of one Subordinate Voting Share purchase warrant (each, whole warrant, a “Finder Unit Warrant”). Each Finder Unit Warrant shall be exercisable into one Subordinate Voting Share (a “Finder Unit Warrant Share”) at a price of CAD$1.50 per Finder Unit Warrant Share for a period of two (2) years from the date of issue of the Finder Unit Warrants.

The total fair value of the broker warrants was $181,394, estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

Share price at grant date (based on the announcement date)	CAD$1.02
Risk-free interest rate	4.25	%
Expected life	2 years
Expected volatility (based on comparable publicly listed entities)	100	%
Expected dividends	Nil

In July and August 2024, the Company converted 10,000,000 Special Warrants units into 10,000,000 Subordinate Voting Shares and 4,999,998 warrants (Note 11). Each warrant is exercisable at CAD$1.50 within 2 years of the issuance date.

In connection with the issuance of convertible debenture (Note 13) the Company issued 6,890,000 warrants. Because the unit price of the convertible debenture (CAD$1.00) is lower than the price of the units on announcement date (CAD$1.02), there is no value to be allocated to the warrants according to the residual value method.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

12.

WARRANTS (continued)

Warrants outstanding as at September 30, 2024 are summarized below:

	Number of warrants			Weighted Average Exercise Price (CAD$)
Balance, March 31, 2023		26,188,410		$	0.99
Issued		9,134,608			2.78
Exercised		(11,615,371	)		1.31
Balance, March 31, 2024		23,707,647		$	1.52
Issued		15,616,721			1.42
Exercised		(1,564,349	)		0.87
Expired		(45	)		0.80
Balance, September 30, 2024		37,759,974		$	1.51

As of September 30, 2024, the Company’s outstanding share purchase warrants expire as follows:

Expiry date	Weighted Average Remaining Contractual Life in Years		Exercise Price (CAD$)		Outstanding
April 3, 2025		0.51		1.20		3,153
April 20, 2025		0.55		1.20		5,250
June 2, 2025		0.67		1.20		31,038
June 16, 2025		0.71		1.20		27,465
July 10, 2025		0.78		1.20		2,660
August 15, 2025		0.87		1.20		223,512
August 15, 2025		0.87		0.80		1,151,892
August 15, 2025		0.87		1.00		10,675,599
August 25, 2025		0.90		1.20		4,977
April 15, 2026		1.54		0.40		1,250,000
April 17, 2026		1.55		1.00		90,400
April 29, 2026		1.58		1.00		180,160
May 16, 2026		1.62		1.00		45,976
July 6, 2026		1.76		2.05		789,127
July 6, 2026		1.76		2.55		7,956,740
August 17, 2026		1.88		1.50		3,499,998
August 30, 2026		1.92		1.50		1,162,650
September 17, 2026		1.96		1.50		337,350
December 22, 2026		2.23		1.20		21,840
June 20, 2027		2.72		1.50		6,890,000
September 26, 2027		2.99		0.80		285,187
September 26, 2027		2.99		1.20		3,125,000
		1.77	$	1.51		37,759,974

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

13.

CONVERTIBLE DEBENTURE

On June 20, 2024 the Company entered into a funding agreement with Group 42 Holding Ltd (“G42”), a leading UAE-based AI technology group (the “Strategic Investment”).

Pursuant to the Strategic Investment, G42 has invested $10,000,000 via a private placement of unsecured convertible debenture units of VERSES (the “Units”). Each Unit will consist of: (i) CAD$1,000 in principal amount of unsecured convertible debenture (“Convertible Debenture”); and (ii) 500 detachable share purchase warrants (the “Warrants”) to purchase Subordinate Voting Shares. The Convertible Debenture shall bear interest at a rate of 10% per annum and mature on June 20, 2026 (the “Maturity Date”).

The principal amount of the Convertible Debenture (the “Principal Amount”), together with all accrued interest (collectively, the “Convertible Amount”), shall be convertible, for no additional consideration, on the earliest to occur of: (A) the date on which the Company completes an equity financing, in one or more tranches, for aggregate gross proceeds of at least CAD$15,000,000 at a price per Subordinate Voting Share of not less than CAD$1.00 (an “Equity Financing”), (B) the date on which G42 elects to convert the Convertible Debenture, and (C) the Maturity Date.

In the event of a conversion of the Convertible Debenture: (i) on the Maturity Date or at the election of G42, the Convertible Amount shall be converted into such number of Subordinate Voting Shares as is equal to the Convertible Amount divided by CAD$1.20 per Share; and (ii) in connection with an Equity Financing, the Convertible Amount shall be converted into such number of Subordinate Voting Shares as is equal to the Convertible Amount divided by the issue price per Subordinate Voting Share sold pursuant to the Equity Financing, multiplied by 80%, provided that, in no event shall such conversion price be greater than CAD$1.20.

If the conversion occurs prior to the Maturity Date, the Holder 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.

Each Warrant will be exercisable into one Subordinate Voting Share at a price of CAD$1.50 per share until June 20, 2027 (the “Expiry Date”), subject to acceleration. If at any time prior to the Expiry Date, the volume-weighted average trading price of the Subordinate Voting Shares on Cboe Canada (or such other principal exchange or market where the Subordinate Voting Shares are then listed or quoted for trading) exceeds CAD$5.55, as adjusted in accordance with the terms of the certificate representing the Warrants (the “Warrant Certificates”), for a period of 10 consecutive trading days, Verses may, at its option, accelerate the Expiry Date to the date that is 30 days following the written notice to G42, in the form of a press release or other form of notice permitted by the Warrant Certificates.

In connection with commercial agreements that may be entered into between VERSES and affiliates of G42, G42 will also receive 1,000,000 restricted stock units (“RSUs”) of VERSES, each vested RSU to be settled through the issuance of one (1) Subordinate Voting Share. The RSUs will vest in installments of 10,000 RSUs for every CAD$100,000 of revenue derived by VERSES from such commercial agreements.

A reconciliation of convertible debenture is as follows:

Balance, March 31, 2024	$	-
Fair value of derivative liability (1)		2,926,151
Host liability (2)		4,608,976
Foreign exchange effect on convertible debenture		216,334
Accretion expense		453,839
Interest payable		290,406
Balance, September 30, 2024	$	8,495,706

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

13.

CONVERTIBLE DEBENTURE (continued)

(1) The Company measured the embedded derivative liability using the Monte-Carlo binomial model, with the following assumptions: share price of CAD$0.72 (issuance date CAD$1.12) based on the market price of the Company’s shares; risk-free interest rate of 3.96% (issuance date 4.63%) based on the Canadian bond yield rate; expected volatility of 100% based on comparable publicly listed entities; and an expected life between 0.2083 and 1.722 years (issuance date 0.20 and 2.0 years) based on management’s estimate of the probability of the conversion feature being exercised. The changes in the estimates resulted in a gain on the fair value of derivative liability of $2,464,873.

(2) IFRS 9 requires entities to calculate the fair value of the embedded derivative first, with the residual value being assigned to the host liability. Subsequently, the derivative liability is measured at FVTPL, while the host debt liability component is measured at amortized cost.

14.

PREPAID EXPENSES

Prepaid expenses consisted of the following:

	September 30, 2024		March 31, 2024
Deposit	$	13,375	$	59,535
Retainer		245,080		126,153
Prepaid insurance		345,807		107,663
Subscriptions		445,378		501,000
Balance, end of the period	$	1,049,640	$	794,351

15.

EQUIPMENT

Cost	Equipment
Balance, March 31, 2023		365,017

Additions		185,155
Balance, March 31, 2024	$	550,172
Additions		30,579
Balance, September 30, 2024	$	580,751

Accumulated depreciation	Equipment
Balance, March 31, 2023		130,177

Additions		152,736
Balance, March 31, 2024	$	282,913
Additions		93,907
Balance, September 30, 2024	$	376,820

Net book value, March 31, 2024	$	267,259
Net book value, September 30, 2024	$	203,931

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

16.

PROMISSORY NOTES

On March 11, 2024, the Company’s wholly owned subsidiary VTU, has accepted an interest free loan in the amount of $2,000,000 from two arms-length investors for $1,000,000 each. The loan matures on the earlier of (i) March 10, 2025; and (ii) the date the Company completes a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells its securities to one or more bona fide third parties. On the maturity date, the Company may elect to repay loan by way of cash, or through the issuance of Subordinate Voting Shares in the capital of the Company at a per share price equal to the price of the securities issued in the Equity Financing, subject to the approval of CBOE Canada Inc.

On April 18, 2024, the promissory notes were settled through the issuance of Special Warrants (Note 12).

17.

FINANCIAL INSTRUMENTS

As of September 30, 2024, the Company’s financial instruments consist of cash and restricted cash, accounts receivable, share subscription receivable, due from related parties, accounts payable and accrued liabilities, restricted share unit liability, provision for legal claim, convertible debenture, and loans payable.

IFRS 13 Fair Value Measurement establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. IFRS 13 prioritizes the inputs into three levels that may be used to measure fair value:

	●	Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities.
	●	Level 2 – Inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs (i.e., quoted prices for similar assets or liabilities).
	●	Level 3 – Prices or valuation techniques that are not based on observable market data and require inputs that are both significant to the fair value measurement and unobservable.

The Company uses judgment to select the methods used to make certain assumptions and in performing the fair value calculations in order to determine (a) the values attributed to each component of a transaction at the time of their issuance; (b) the fair value measurements for certain instruments that require subsequent measurement at fair value on a recurring basis; and (c) for disclosing the fair value of financial instruments subsequently carried at amortized cost. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market.

The fair value of cash and restricted cash, accounts receivable, share subscription receivable, due from related parties, accounts payable and accrued liabilities, promissory notes, provision for legal claim, and loans payable are measured using Level 1 inputs, the fair value of restricted share unit liability and convertible debentures are measured using Level 2 and Level 3 inputs.

The carrying value of the Company’s other financial instruments approximate their fair values due to their short-term maturities.

There were no transfers between the levels of the fair value hierarchy during the period.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

17.

FINANCIAL INSTRUMENTS (continued)

As of September 30, 2024	Level 1		Level 2		Level 3		Total
Assets:
Cash and restricted cash	$	2,236,498	$	-	$	-	$	2,236,498
Shares subscription receivable	$	2,042,307	$	-	$	-	$	2,042,307
Due from related parties	$	2,335,369	$	-	$	-	$	2,335,369
Liabilities:
Accounts payable and accrued liabilities	$	3,977,199	$	-	$	-	$	3,977,199
Convertible debenture	$	-	$	5,569,555	$	2,926,151	$	8,495,706
Provision for legal claim	$	6,307,258	$	-	$	-	$	6,307,258
Restricted share unit liability	$	-	$	1,157,224	$	-	$	1,157,224
Loans payable	$	139,660	$	-	$	-	$	139,660

As of March 31, 2024	Level 1		Level 2		Level 3		Total
Assets:
Cash	$	892,727	$	-	$	-	$	892,727
Accounts receivable	$	100,000	$	-	$	-	$	100,000
Due from related parties	$	1,937,270	$	-	$	-	$	1,937,270
Liabilities:
Accounts payable and accrued liabilities	$	2,865,002	$	-	$	-	$	2,865,002
Promissory notes	$	2,000,000	$	-	$	-	$	2,000,000
Provision for legal claim	$	6,307,258	$	-	$	-	$	6,307,258
Restricted share unit liability	$	-	$	576,214	$	-	$	576,214
Loans payable	$	140,904	$	-	$	-	$	140,904

Credit risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The financial instrument that potentially subjects the Company to concentrations of credit risk consists principally of cash, accounts receivable, and due from related parties. To minimize the credit risk, the Company places its cash with large financial institutions.

Amounts due from related parties of $2,335,369 (March 31, 2024 - $1,937,270) are due from companies controlled by key management personnel. These amounts are expected to be settled through future services agreements, and as such, credit risk is assessed as low. As of September 30, 2024, management assessed that there is no need to provide a credit loss allowance.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations, cash holdings, and anticipated future financing transactions.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

17.

FINANCIAL INSTRUMENTS (continued)

Contractual cash flow requirements as of September 30, 2024, were as follows:

	<1 year $		1-2 years $		2-5 years $		>5 years $		Total $
Accounts payable and accrued liabilities		3,977,199		-		-		-		3,977,199
Convertible debenture		-		10,286,195		-		-		10,286,195
Loans payable		7,752		7,752		23,256		100,900		139,660
Total		3,984,951		10,293,947		23,256		100,900		14,403,054

As of September 30, 2024, the Company had a working capital deficit of $12,947,693 (March 31, 2024 - $7,270,243).

Foreign exchange risk

Foreign exchange risk is the risk that the fair value or future cash flows will fluctuate due to changes in foreign exchange rates. The Company has financial assets denoted in Euros and Canadian dollars and is therefore exposed to exchange rate fluctuations. As of September 30, 2024, the Company had the equivalent of $6,808,930 (March 31, 2024 - $552,476) net financial liabilities denominated in Canadian dollars and $214,040 (March 31, 2024 - $117,648) in net financial assets denominated in Euros.

The foreign exchange risk exposure of the Company financial instruments as at September 30, 2024 is as below:

				+/- 10% fluctuation
	Currency			Increase/(decrease)
Financial Instrument Type	CAD$			$ impact
Cash		1,457,437			107,967		(107,967	)
Shares subscription receivable		2,756,894			204,231		(204,231	)
Tax receivable		740,776			54,877		(54,877	)
Prepaid expenses		1,009,244			74,765		(74,765	)
Accounts payable and accrued liabilities		(2,125,258	)		(157,439	)	157,439
Convertible debenture		(11,466,695	)		(849,571	)	849,571
Restricted share unit liability		(1,562,128	)		(115,722	)	115,722
		(9,189,730	)		(680,892	)	680,892

				+/- 10% fluctuation
	Currency			Increase/(decrease)
Financial Instrument Type	EURO			$ impact
Restricted cash		219,301			24,437		(24,437	)
Tax receivable		116			13		(13	)
Accounts payable and accrued liabilities		(27,331	)		(3,046	)	3,046
		192,086			21,404		(21,404	)

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The interest earned on cash balances approximate fair value rates, and the Company is not subject to significant risk due to fluctuating interest rates. As of September 30, 2024, the Company does not hold any liabilities that are subject to fluctuations in market interest rates.

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

17.

FINANCIAL INSTRUMENTS (continued)

Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or currency risk. The Company is not exposed to other price risk.

18.

MANAGEMENT OF CAPITAL

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of their technology. The Company considers the items in shareholders’ equity as capital. There has been no change to what the Company considers capital from the prior year. The Company does not have any externally imposed capital requirements to which it is subject to.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may issue Subordinate Voting Shares, dispose of assets or adjust the amount of cash. There has been no change to how capital is managed from the prior year.

19.

SUPPLEMENTAL CASH FLOW INFORMATION

The supplemental cash paid and received by the Company as at September 30, 2024 is as below:

	For six months ended
	September 30,
	2024		2023
Cash paid for interest	$	6,843	$	2,670
Cash received for interest	$	49,970	$	178,186

20.

SEGMENTED NOTE

All of the Company’s non-current assets as of September 30, 2024 and March 31, 2024 and all of the Company’s revenue for the period ended September 30, 2024 and 2023 were in the United States.

The operating segments have been disclosed by geographical region for the three and six months ended September 30, 2024 and 2023 as follows:

	Three months ended				Six months ended
	September 30				September 30
Total net (income) loss by country	2024		2023		2024		2023
United States	$	5,579,292	$	4,444,608	$	12,183,596	$	7,924,787
Canada		2,754,016		3,466,690		6,477,756		8,034,641
Netherlands		-		83,769		71,551		174,142
Total net loss by country	$	8,333,308	$	7,995,067	$	18,732,903	$	16,133,570

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

21.

PROVISION FOR LEGAL CLAIM

On July 13, 2022, David Thomson, a former independent contractor, filed a lawsuit against VTU, Cyberlab LLC, and two directors/officers of the Company in Los Angeles Superior Court. The claim alleged violations of various sections of the California Corporations code, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Plaintiff claims as much as $5,000,000 in damages, subject to proof.

On September 1, 2022, the Company filed an answer denying any wrongdoing, and also made its own counterclaim against Mr. Thomson. The cross-claims against David Thomson included: (i) misappropriation of trade secrets; (ii) breach of contract; (iii) violation of the California Computer Data Access and Fraud Act (“CDAFA”); and (iv) violation of the Economic Espionage Act, after the Company voluntarily dismissed three cross-claims (alleging violation of the Computer Fraud and Abuse Act, conversion, violation of the Stored Communications Act, respectively). The Company, for its part, sought to recover both compensatory and punitive damages from Mr. Thomson, as well as restitution of any ill-gotten gains and an award of reasonable attorneys’ fees. The CDAFA claim was dismissed on Summary Judgment, but the claims for trade secret misappropriation, breach of contract and unjust enrichment were allowed.

On March 30, 2023, arbitration was conducted via a single arbitrator at the American Arbitration Association. The CDAFA claim was dismissed on Summary Judgment, but the claims for trade secret misappropriation, breach of contract and unjust enrichment were upheld. Depositions were taken by both sides in December 2023 and early 2024, with final pre-trial witness and evidentiary exhibits being submitted on January 22, 2024.

A final arbitration award was issued in this action on May 17, 2024. The final award imposes liability against: (i) Verses Technologies USA, Inc., a subsidiary of the Company, jointly and severally with Cyberlab, LLC (a company owned by the Company’s president, Dan Mapes), in the amount of $6,307,258, inclusive of interest; and (ii) Cyberlab, VTU and its principals, Gabriel René and Daniel Mapes, jointly and severally, for damages in the amount of $1,900,000, interest of $709,973, costs of $64,303 and the fees of plaintiff’s counsel totaling $920,231. To resolve their part of joint and several liability, Mr. René and Mr. Mapes are working toward satisfying the portion of the award that applies to them as individuals. The remaining liability belongs to VTU, a subsidiary of the company. The Company has received $1,666,000 of insurance proceeds for the matter, and initial good faith payments of $125,000 have been made to the claimant. Although no settlement has been reached, VTU, for its part, is vigorously pursuing settlement negotiations. However, the likelihood of a favourable or unfavourable outcome, or an estimate of the amount or range of potential loss, which is isolated to VTU, is not reasonably foreseeable at this time.

From time to time the Company may be named as a defendant and as a plaintiff in various legal actions arising from the operations of the Company and previous affiliates of the Company. Currently, based upon information available to the Company, the Company does not believe any such matters would have a material adverse effect upon our financial condition or results of operations as at September 30, 2024, except those amounts already reflected in the consolidated financial statements. However, due to the inherent uncertainty of litigation, the Company cannot provide certainty as to their outcome. If the Company’s current evaluations are materially incorrect or if the Company is unable to resolve any of these matters favourably, there may be a material adverse impact on our financial performance, cash flows or results of operations.

Included in accrued liabilities is the net balance for the proceeds of the funds received by the Directors and Officers insurance (“D&O”) by $1,541,000 (March 31, 2024 - $Nil).

VERSES AI INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended September 30, 2024 and 2023

(Expressed in United States dollars - Unaudited)

22.

SUBSEQUENT EVENTS

On November 6, 2024, the Company announced that it intends to complete a non-brokered private placement of up to 6,800,000 units of the Company (the “LIFE Units”) at a price of CAD$0.50 per Unit for aggregate gross proceeds of up to CAD$3.4 million (the “LIFE Offering”) and a non-brokered private placement of up to 3,200,000 special warrants (the “Special Warrants”) of the Company, each exercisable for one unit of the Company (each, an “Equity Unit”, and together with the LIFE Units, the “Units”) at no additional cost, for aggregate gross proceeds of up to CAD$1.6 million (the “Special Warrant Offering”, and together with the LIFE Offering, the “Offering”).

Each Unit will consist of one Class A Subordinate Voting share of the Company (a “Share”) and one-half of one Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will entitle the holder thereof to acquire one Share (each, a “Warrant Share”) at an exercise price of CAD$0.70 per Share, subject to adjustment in certain circumstances, for a period of 36 months from the Closing Date.

On November 8, 2024, the Company announced that it closed its previously announced non-brokered private placement of 3,600,000 Special Warrants of the Company (the “Special Warrants”) at a price of CAD$0.50 (the “Offering Price”) per Special Warrant for aggregate gross proceeds of CAD$1.8 million (the “Special Warrant Offering”). The Company’s decision to increase the size of the Special Warrant Offering from CAD$1.6 million to CAD$1.8 million was accepted by Cboe Canada (the “Exchange”) prior to closing.

In connection with the Offering, the Company: (i) paid to certain finders and advisors an aggregate cash commission of CAD$91,325; and (ii) issued to certain finders and advisors an aggregate of 182,650 compensation warrants (the “Compensation Warrants”). Each Compensation Warrant will be exercisable into one Equity Unit at the Offering Price for a period of 36 months following November 8, 2024.

On November 8, 2024, the Company closed the first tranche of its previously announced non-brokered private placement of 5,807,700 units of the Company (the “LIFE Units”) at a price of CAD$0.50 per LIFE Unit (the “Offering Price”) for aggregate gross proceeds of CAD$2,903,850 (the “LIFE Offering”).

In connection with the Offering, the Company: (i) paid to certain finders and advisors an aggregate cash commission of CAD$103,675; and (ii) issued to certain finders and advisors an aggregate of 207,350 compensation warrants (the “Compensation Warrants”). Each Compensation Warrant will be exercisable into one Equity Unit at the Offering Price for a period of 36 months following the Closing Date.

Exhibit 99.2

VERSES AI INC.
Management’s Discussion and Analysis
As of November 14, 2024

This Management’s Discussion and Analysis (“MD&A”) of VERSES AI Inc. (“Company” or “VERSES”) is for the three months ended September 30, 2024, and is prepared by management using information available as of November 14, 2024. The Company’s fiscal year end is March 31. The six months ended September 30, 2024, is referred to as “Q2 2025”, and the three months ended on September 30, 2023 is referred to as “Q2 2024”. This MD&A should be read in conjunction with the condensed consolidated interim financial statements of the Company for the three and six month periods ended September 30, 2024 and the Company’s audited consolidated financial statements for the year ended March 31, 2024, and the notes thereto, prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board.

This MD&A complements and supplements, but does not form part of, the Company’s condensed consolidated interim financial statements. This MD&A contains forward-looking statements. Statements regarding the adequacy of cash resources to carry out the Company’s exploration programs or the need for future financing are forward-looking statements. All forward-looking statements, including those not specifically identified herein, are made subject to cautionary language.

This MD&A is prepared in conformity with National Instrument (“NI”) 51-102F1 Management’s Discussion & Analysis.

All dollar amounts referred to in this MD&A are expressed in United States dollars unless otherwise indicated.

DISCLAIMER FOR FORWARD LOOKING STATEMENTS

This following MD&A contains “forward-looking statements” (also referred to as “forward-looking information”) within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this MD&A that address activities, events or developments that the Company expects or anticipate will or may occur in the future, including statements about the anticipated impact of the operations of the Company, as well as the benefits expected to result from capital expenditures, potential management contracts for ongoing services, and other such matters are forward-looking statements. When used in this MD&A, the words “estimate”, “plan”, “anticipate”, “expect”, “intend”, “believe” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to the Genius^TM beta program and the Company’s future objectives and plans.

There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. Forward looking statements are subject to risks, uncertainties and assumptions, including those discussed elsewhere in this MD&A. Although the Company believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Such forward-looking statements are based on a number of assumptions of management, including, without limitation: that the Genius^TM beta program will proceed as planned and that the Company will be able to operate and advance its business objectives as currently anticipated.

Some of the risks which could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein include but are not limited to risks related to: failure to launch the Genius^TM beta program as anticipated, or at all; general business operations; sales assumptions; limited operating history; development of the Company’s brand; competition; need for continued improvement; intellectual property issues; interactive digital media; potential liability claims; litigation; insurance; economic downturns; currency; key personnel; conflicts of interest; changes in general applicable laws; compliance with advertising laws and regulations; foreign operations; no guaranteed return on investment; dilution; fluctuation of share price; access to capital; internal controls; accounting policies; and other factors beyond the control of the Company. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks as more particularly described under “Risk Factors.” Although the Company attempted to identify important factors that could cause actual results to differ materially, 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.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

BUSINESS OVERVIEW

The Company was incorporated under the Business Corporations Act (British Columbia) (the “BCBCA”) on November 19, 2020, under the name Chromos Capital Corp. On June 17, 2021, the Company changed its name to Verses Technologies Inc. and on June 21, 2021, the Company entered into a Contribution Agreement with Verses Technologies USA, Inc. (formerly Verses Labs Inc.) (“VTU”) pursuant to which VTU’s shareholders exchanged all of the outstanding shares for Class A Subordinate Voting Shares (“Subordinate Voting Shares”) of the Company (the “VTU Transaction”). Upon closing of the VTU Transaction on July 20, 2021, VTU became a wholly owned subsidiary of the Company, the shareholders of VTU held the majority of the Company’s outstanding Subordinate Voting Shares, all of the Company’s business was conducted through VTU and the management of VTU became the Company’s management.

On March 31, 2023, the Company changed its name to VERSES AI Inc.

VERSES is a cognitive computing company specializing in next generation intelligence systems. The Company is primarily focused on developing Genius™, an intelligence-as-a-service smart software platform, which has absorbed the Company’s previous KOSM™ and KOSM Exchange products.

The Company’s business is based on the vision of the “Spatial Web” – an open, hyper-connected, context-aware, governance-based network of humans, machines and intelligent agents. The Company’s ambition is to build tools that enable the Spatial Web and to become a leader in the transition from the information age to the intelligence age.

Overview of Genius^TM

Generative Artificial Intelligence (“AI”) models like GPT and DALL-E-2 excel at producing written and visual content by predicting the next statistically most likely word or pixel based on “correlations” and patterns found in enormous training data sets. While some outputs might suggest some spark of intelligence, mathematically, such generative AI models simply mimic the input data on which they were trained, including the biases therein, without genuine understanding or reasoning. Further, there are ethical concerns around, among other things, the predisposition of such technology for potentially generating misinformation, bias inherent in the training data and the likelihood of intellectual property infringement used in training data without consent or remuneration. The Company believes it will take more than increasing the volume of training data sets to create intelligent software that can reason, plan and learn.

VERSES is developing Genius as its flagship product, with the intention that it will generate intelligent agents (“Genius Agents”), that are each expected to function as a “digital brain” by transforming data into interoperable knowledge model (“Genius Core”) on which to infer the “causality” and hidden states that generate the data they observe. This causal modeling or “inference” mechanism is being built on Active Inference, a framework based on the Free Energy Principle.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

In conventional computing, storage and compute are independent components and the sequential data transfer between the two is massively inefficient in both time and energy. In the human brain, neurons function as both memory and processor and, being interconnected, process information in parallel. Genius Core and Genius Agents are being designed to function like integrated memory and processor. Consequently, Genius Agents and Genius Core are not separate products but rather integral parts of Genius.

Genius is not fully operational or widely available in the market, as it is currently in the development/testing stage.

The Company launched a private beta program of Genius (including Genius Agents and Genius Core) in early 2024 with ten partners, all of whom the Company had an existing business relationship with. The Company has launched the public beta program for a broader number of developers for the second half of 2024. This public beta program is expected to include enhanced functionalities and is intended to help the Company increase its potential customer base, while refining its product offerings in anticipation of the full launch of Genius.

Genius Agents

Genius Agents are intended to read from and write to HSML knowledge models to reason, plan and learn. Much like a real assistant, Genius Agents are being designed to solve complex problems based on context, intent, requirements, and restrictions. The more context (such as location, schedule, weather, history, preferences, goals, available resources) that a Genius Agent has, the more hyper-personalized the results and recommendations it can provide. Genius Agents are being designed to adapt to dynamically changing conditions and collaborate with other agents which is essential for evolving from automatic, to automated, to autonomous, and ultimately, to autonomic self-organizing systems.

Genius Agents are being designed to be able to perform other highly context-dependent and multi-step decisions in a professional capacity such as aggregating information from multiple sources into a unified report with charts, graphs, summaries, and suggested action items. For instance, a Genius Agent is being designed to be able to ingest a number of unstructured pdfs. research papers and generate an HSML knowledge graph mapping all authors, university attributions, bibliographical references, external citations, diagrams, formulas, and other content to answer complex questions – the answers to which are not explicit and must be inferred.

Genius Core

Genius Core is being developed to actively manage, organize, and store data, while transforming it into strategic, actionable insights. Data structures such as document-oriented databases, knowledge graphs, and vector databases offer different solutions for data storage and retrieval, each having unique strengths and weaknesses. Genius Core is being designed as a unique search, recommendation, and knowledge engine that is intended to combine the benefits of all three types (document, graph, and vector) by transforming structured and unstructured data into a unified hyperspatial knowledge model that is expected to be uniquely suited to serve as memory for AI systems which need to represent complex multidimensional relationships. In Genius Core, entities and their relationships are being modeled in HSML and queried via HSQL.

Business Model

The Company intends to market Genius to developers as a Software-as-a-Service (SaaS) for making their applications smarter, safer and more sustainable. We anticipate offering subscription tiers priced based on usage and pricing will be informed by various performance metrics gathered during the beta program.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

Highlights - Q2 2025 and Subsequent Events

On July 2, 2024, the Company appointed James Hendrickson as Chief Operating Officer. Mr. Hendrickson was previously the General Manager of VERSES Enterprise.

On August 14, 2024, the Company announced that third party logistics company NRI USA, LLC (“NRI”) will be upgrading to the GENIUS Beta program. Due to the change of platform and the structure of the GENIUS offering, the existing SaaS contract dated August 25, 2021 has been voided by both parties and no further obligations are required on behalf of either party in respect of the SaaS contract. The two companies intend to enter into a new contract for GENIUS on terms being negotiated by the parties.

On September 18, 2024, the Company announced the first in a series of joint smart city projects with Analog, an edge computing company focused on seamlessly connecting people, places and things using smart sensors and mixed reality devices, to simulate taxi fleet management in Abu Dhabi. Utilizing Genius™, the project objective is to understand how to optimize fleet operations while minimizing congestion and emissions.

The project objectives include 1) increasing the number of taxis in operation during designated periods of high demand, ensuring the highest possible fleet activity, 2) determining the optimal allocation of tasks for each taxi and driver, balancing operational demands with available resources and 3) automatically scheduling and conducting maintenance activities, ensuring that each taxi receives timely maintenance, and the arrangement aligns with facility capacities and capabilities.

By combining real-time disparate data sources into a probabilistic world model with factors such as local events, weather, fleet details, personnel preferences, legal requirements, maintenance schedules, and inventory Analog will be able to better monitor and respond to the dynamics of the overall city ecosystem, with a positive impact on several dimensions, including improved traffic and reduced air pollution.

On September 20, 2024, the Company announced that it intends to complete a non-brokered private placement (the “Offering”) of up to 12,500,000 units of the Company (the “Units”) at a price of CAD$0.80 per Unit (the “Offering Price”) for gross proceeds of up to CAD$10,000,000.

Each Unit will consist of one Class A Subordinate Voting share of the Company (a “Share”) and one-half of one Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will entitle the holder thereof to acquire one Share (each, a “Warrant Share”) at an exercise price of CAD$1.20 per Share, subject to adjustment in certain circumstances, for a period of 36 months from the Closing Date (as defined below).

The Offering has been structured to take advantage of the listed issuer financing exemption from prospectus requirements (the “Exemption”) in Part 5A of National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”), whereby shares issued pursuant to the Exemption are freely tradeable listed equity securities not subject to any hold period (see below). The Offering will be conducted in all the provinces of Canada, except Québec, under the Exemption, for aggregate gross proceeds up to CAD$10,000,000. The Offering may be conducted in the United States pursuant to exemptions from the registration requirements under Regulation D of the United States Securities Act of 1933, as amended (the “1933 Act”), subject to receipt of all necessary regulatory approvals, and in those other jurisdictions outside of Canada and the United States provided it is understood that no prospectus filing or comparable obligation arises in such other jurisdiction. The Units will not be subject to resale restrictions pursuant to applicable Canadian securities laws.

In connection with the Offering, the Company will: (i) pay to certain finders and/or advisors a cash commission equal to 6.5% of the gross proceeds raised from the sale of the Units; and (ii) issue to certain finders and/or advisors that number of compensation warrants (the “Compensation Warrants”) as is equal to 6.5% of the Units sold under the Offering. Each Compensation Warrant will be exercisable into one Unit at the Offering Price for a period of 36 months following the Closing Date.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

The net proceeds of the Offering will be used for general working capital and other general corporate purposes, all as more particularly described in the Offering Document.

On September 26, 2024, the Company announced that it has closed the first tranche of its previously announced non-brokered private placement (the “Offering”) of 6,250,000 units of the Company (the “Units”) at a price of CAD$0.80 per Unit (the “Offering Price”) for gross proceeds of CAD$5,000,000.

The Offering has been structured to take advantage of the listed issuer financing exemption from prospectus requirements (the “Exemption”) in Part 5A of National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”), whereby shares issued pursuant to the Exemption are freely tradeable listed equity securities not subject to any hold period. The Offering has been conducted in all the provinces of Canada, except Québec, under the Exemption, for aggregate gross proceeds of CAD$5,000,000. The Units were also offered and sold to persons in the United States pursuant to exemptions from the registration requirements under Rule 506(b) of Regulation D of the United States Securities Act of 1933, as amended (the “1933 Act”), and in those other jurisdictions outside of Canada and the United States provided it is understood that no prospectus filing or comparable obligation arises in such other jurisdiction. The Units are not subject to resale restrictions pursuant to applicable Canadian securities laws, however, the Units (and underlying Shares, Warrants and Warrant Shares) offered and sold to persons in the United States, will be considered restricted securities under the 1933 Act and will contain a restrictive legend referencing the 1933 Act.

In connection with the Offering, the Company: (i) paid to certain finders and advisors an aggregate cash commission of CAD$278,772; (ii) issued to certain finders and advisors an aggregate of 285,187 compensation warrants (the “Compensation Warrants”), and (iii) incurred in legal fees of CAD$41,257. Each Compensation Warrant will be exercisable into one Unit at the Offering Price for a period of 36 months following the Closing Date.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

SELECTED QUARTERLY FINANCIAL INFORMATION

The following table presents selected financial information for each of the last eight quarters.

	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
	$			$			$			$
Revenue		155,000			-			587,862			544,536
Net comprehensive profit (loss)		(8,467,773	)		(10,487,104	)		(15,668,551	)		(14,900,263	)
Loss per class A subordinate voting shares - basic and diluted		(0.05	)		(0.07	)		(0.11	)		(0.10	)
Loss per class B proportionate voting shares - basic and diluted	$	Nil		$	Nil			(0.66	)		(0.64	)
Total assets		8,571,641			13,550,293			5,699,640			11,400,490
Working capital (deficit)		(12,947,693	)		(9,320,085	)		(7,270,243	)		7,206,302

	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
	$			$			$			$
Revenue		558,814			275,519			392,492			560,546
Net comprehensive profit (loss)		(8,184,399	)		(8,150,603	)		(5,240,776	)		(4,571,356	)
Loss per class A subordinate voting shares - basic and diluted		(0.06	)		(0.07	)		(0.04	)		(0.04	)
Loss per class B proportionate voting shares - basic and diluted		(0.37	)		(0.41	)		(0.28	)		(0.25	)
Total assets		17,965,967			11,215,601			8,640,747			8,010,329
Working capital (deficit)		15,120,282			1,665,651			640,853			4,544,825

During the quarter ending December 31, 2022, the Company recorded revenues of $560,546 and net comprehensive loss of $4,571,356, mainly due to investments in research and development of $1,498,736.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

During the quarter ended March 31, 2023, the Company recorded net comprehensive loss of $5,240,776, which is $669,420 higher than the net comprehensive loss recorded in the quarter ending December 31, 2023, due to lower grant income and revenue ($383,723), and higher interest expenses from the convertible debenture ($101,918).

During the quarter ended June 30, 2023, the Company recorded net comprehensive loss of $8,150,603, which is $2,909,827 higher than the net comprehensive loss recorded in the quarter ending March 31, 2023, due higher marketing expenses ($942,011), share-based payments from the revaluation of the options and broker warrants ($615,394), investor relations expenses ($465,535), and research and development expenses ($414,746).

During the quarter ended September 30, 2023, the Company recorded total assets of $17,965,967 which is $6,750,366 higher than previous quarter mainly due to new fundraising in July 2023. The increase of total assets combined with the conversion of the convertible debentures resulted in a higher working capital, which is $13,454,631 higher than in the previous quarter.

During the quarter ended December 31, 2023, the Company recorded a net comprehensive loss of $14,900,263 which is $6,715,864 higher than previous quarter mainly due to the grant of stock options to employees and strategic consultants which resulted in a rise in share-based compensation to $6,267,643.

During the quarter ended March 31, 2024, the Company recorded a net comprehensive loss of $15,668,551 which is $768,288 higher than previous quarter mainly due a provision for legal settlement regarding an arbitration award against VTU for $6,307,258 which was partially offset by a lower share based payment expense of $5,650,560.

During the quarter ended June 30, 2024, the Company recorded a net comprehensive loss of $10,487,104 which is $5,181,447 lower than previous quarter mainly due a provision for legal settlement regarding an arbitration award against VTU for $6,307,258 recorded in the previous quarter. The difference was partially offset by the provision for contract settlement of $1,252,076 recorded in June 2024.

During the quarter ended September 30, 2024, the Company recorded a net comprehensive loss of $8,467,773 which is $2,019,331 lower than previous quarter mainly due the gain on the derivative liability portion of the convertible debenture recorded in the quarter ($2,464,873).

SELECTED QUARTERLY FINANCIAL INFORMATION

The following table sets forth selected financial information for Q2 2025 and Q2 2024, which has been derived from the condensed consolidated interim financial statements and accompanying notes, in each case prepared in accordance with IFRS. The following discussion should be read in conjunction with the condensed consolidated interim financial statements, and it may not be indicative of the Company’s future performance.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

FINANCIAL RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024

	Q2 2025			Q2 2024
Total revenue	$	155,000		$	558,814
Loss from Continuing Operations		(10,255,829	)		(8,046,736	)
Loss from Continuing Operations Per Class A Subordinate Voting Shares - Basic and Diluted		(0.07	)		(0.06	)
Loss from Continuing Operations Per Class B Proportionate Voting Shares - Basic and Diluted		$Nil			(0.36	)
Net Comprehensive loss		(8,467,773	)		(8,184,399	)
Loss Per Class A Subordinate Voting Shares - Basic and Diluted		(0.05	)		(0.06	)
Loss Per Class B Proportionate Voting Shares - Basic and Diluted		$Nil			(0.37	)
Total assets		8,571,641			17,965,967
Total liabilities	$	20,253,077		$	2,659,327

The following table provides an overview of the financial results in Q2 2025 as compared to Q2 2024:

	Q2 2025			Q2 2024
Revenue	$	155,000		$	558,814
Cost of revenue		(145,000	)		(474,632	)
		10,000			84,182
Expenses:
Accounting fees		200,526			157,403
Consulting fees		1,398,831			1,248,158
Depreciation		47,857			65,424
Investor relations		340,576			786,867
Legal fees		426,198			360,629
Management fees		59,455			-
Marketing		292,969			1,215,893
Office and general		508,713			550,236
Personnel expenses		908,304			1,366,762
Rent		24,741			8,163
Research and development		4,166,763			2,240,965
Share based payments		1,740,224			(80,819	)
Travel and meals		150,672			211,237
		10,265,829			8,130,918
Other items:
Interest expense		(221,720	)		(58,428	)
Accretion expense		(411,813	)		(36,089	)
Other income		35,147			146,186
Grant income		56,034			-
Gain on derivative liability		2,464,873			-
NET LOSS	$	(8,333,308	)	$	(7,995,067	)

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

DISCUSSIONS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024

VERSES recorded a net loss of $8,333,308 in Q2 2025, which is $338,241 higher than the loss of $7,995,067 in Q2 2024, mainly attributed to higher investments in research and development ($1,925,798) and share based payments ($1,821,043), which was partially offset by the gain on the derivative liability portion of the convertible debenture recorded in the quarter ($2,464,873) and lower investments in Marketing ($922,924).

Revenues

During Q2 2025, the Company’s revenue was $155,000, a decrease of $403,814 compared to $558,814 recorded in Q2 2024 mainly due to the early termination of the Company’s SaaS project.

For the quarter ended	Q2 2025		Q2 2024		Change
Recognized at a point in time	$	155,000	$	218,600	$	(63,600	)
Recognized over the duration of contracts		-		340,214		(340,214	)
Total Revenue	$	155,000	$	558,814	$	(403,814	)

Cost of revenue

The Company incurred $145,000 in cost of revenue during Q2 2025, a decrease of $329,632 when compared to $474,632 recorded in Q2 2024. The reduction is attributed to the early termination of the Company’s SaaS project.

Expenses

Expenses increased $2,134,911 from $8,130,918 in Q2 2024 to $10,265,829 in Q2 2025. The changes in expenses were attributable to the following items:

For the period ended	Q2 2025		Q2 2024			Change
Accounting fees	$	200,526	$	157,403		$	43,123
Consulting fees		1,398,831		1,248,158			150,673
Depreciation		47,857		65,424			(17,567	)
Investor relations		340,576		786,867			(446,291	)
Legal fees		426,198		360,629			65,569
Management fees		59,455		-			59,455
Marketing		292,969		1,215,893			(922,924	)
Office and general		508,713		550,236			(41,523	)
Personnel expenses		908,304		1,366,762			(458,458	)
Rent		24,741		8,163			16,578
Research and development		4,166,763		2,240,965			1,925,798
Share based payments		1,740,224		(80,819	)		1,821,043
Travel and meals		150,672		211,237			(60,565	)
Total operating expenses	$	10,265,829	$	8,130,918		$	2,134,911

●	Consulting fees increase of $150,673 is related to higher fees paid to the Company’s financial advisor ($359,493), which was partially offset by lower business development costs ($120,652) and European grant consulting team ($56,665). Other general consulting expenses decreased by $31,503 when compared to the previous year.
●	The investor relations decrease of $446,291 is mostly attributed to lower expenditure in the corporate and business strategy ($303,081), public relations to provide the Company a profile and visibility in the investment community ($150,906), and capital markets consultants ($66,924). Other general investor relations expenditures represented an increase of $74,620.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

●	Legal fees increased by $65,569 when compared to the previous year mainly due to special projects conducted by the Company with the support of external counsel.
●	The decrease of $922,924 in marketing is mostly related to lower investments in digital marketing services ($354,284), video production ($260,000), and spatial web adoption services ($84,000). Other general marketing expenditures represented a decrease of $224,640.
●	Personnel expenses decreased by $458,458 mainly due to lower expenses with the general and administrative overhead.
●	Research and development (“R&D”) increased by $1,925,798 as the Company increased the size of the team to focus on development of its products. R&D is compounded by payroll, payroll benefits, payroll taxes, independent contractors, and hosting related costs.
●	Share based compensation increased by $1,821,043 due to new grants of stock options and RSUs in July ($1,707,436), higher accrual of the graded vesting of stock options granted to employees and strategic consultants of the Company ($77,356), and higher valuation of the restricted stock units granted to the employees and strategic consultants of the Company ($36,251).

Other items

During Q2 2025, other items amounted to an income of $1,922,521, which is an increase of $1,870,852 from an income of $51,669 during Q2 2024. The changes in other items were impacted by the following items:

For the period ended	Q2 2025			Q2 2024			Change
Interest expense	$	(221,720	)	$	(58,428	)	$	(163,292	)
Accretion expense		(411,813	)		(36,089	)		(375,724	)
Other income		35,147			146,186			(111,039	)
Grant income		56,034			-			56,034
Gain on derivative liability		2,464,873			-			2,464,873
Total other items	$	1,922,521		$	51,669		$	1,870,852

	●	Interest expense decrease relates to the interest accrual of the convertible debentures.

	●	Accretion expense attributable to convertible debenture.

	●	Other income consisted of interest income from interest-bearing accounts.

	●	The changes in the estimates in the Monte-Carlo binomial model resulted in a gain on the fair value of derivative liability of the convertible debenture of $2,464,873.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

FINANCIAL RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2024

	September 30, 2024			September 30, 2023
Total revenue	$	155,000		$	834,333
Loss from Continuing Operations		(20,556,903	)		(15,763,210	)
Loss from Continuing Operations Per Class A Subordinate Voting Shares - Basic and Diluted		(0.16	)		(0.12	)
Loss from Continuing Operations Per Class B Proportionate Voting Shares - Basic and Diluted		(0.97	)		(0.75	)
Net loss		(18,954,877	)		(16,322,902	)
Loss Per Class A Subordinate Voting Shares - Basic and Diluted		(0.14	)		(0.13	)
Loss Per Class B Proportionate Voting Shares - Basic and Diluted	$	Nil			(0.78	)
Total assets		8,571,641			17,965,967
Total liabilities	$	20,253,077		$	2,659,327

The following table provides an overview of the financial results for the six months ended September 30, 2024, as compared to September 30, 2023:

For the period ended	September 30, 2024			September 30, 2023
Revenue	$	155,000		$	834,333
Cost of revenue		(145,000	)		(743,702	)
		10,000			90,631
Expenses:
Accounting fees		350,407			272,040
Consulting fees		2,855,032			2,082,956
Depreciation		93,907			126,234
Investor relations		605,993			1,409,316
Legal fees		864,112			709,217
Management fees		84,581			-
Marketing		1,199,050			2,658,515
Office and general		940,979			898,189
Personnel expenses		1,762,012			2,058,128
Provision for contract settlement		1,252,076			-
Rent		60,079			10,383
Research and development		8,261,915			4,222,339
Share based payments		1,961,724			965,393
Travel and meals		275,036			441,131
		20,566,903			15,853,841

Other items:
Interest expense		(293,038	)		(344,628	)
Accretion expense		(453,839	)		(203,918	)
Other income		49,970			178,186
Grant income		56,034			-
Gain on derivative liability		2,464,873			-
NET LOSS	$	(18,732,903	)	$	(16,133,570	)

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

DISCUSSIONS OF OPERATIONS

VERSES recorded a net loss of $18,732,903 during the period ending September 30, 2024, which is $2,599,333 higher than the loss of $16,133,570 during the period ending September 30, 2023, mainly attributable to increases in research and development ($4,039,576) and provision for contract settlement ($1,252,076), which was partially offset by a gain on derivative liability ($2,464,873) and lower marketing expenses ($1,459,465).

Revenues

During the period ending September 30, 2024, the Company’s revenue was $155,000, a decrease of $679,333 compared to $834,333 recorded in the period ending September 30, 2023, mainly due to the early termination of the Company’s SaaS project.

For the period ended	September 30, 2024		September 30, 2023		Change
Recognized at a point in time	$	155,000	$	218,600	$	(63,600	)
Recognized over the duration of contracts		-		615,733		(615,733	)
Total Revenue	$	155,000	$	834,333	$	(679,333	)

Cost of revenue

The Company incurred $145,000 in cost of revenue in the period ending September 30, 2024, a decrease of $598,702 when compared to $743,702 recorded in the period ending September 30, 2023. The reduction is attributed to the early termination of the Company’s SaaS project.

Expenses

Expenses increased $4,713,062 from $15,853,841 in the period ending September 30, 2023 to $20,566,903 in the period ending September 30, 2024. The changes in expenses were attributable to the following items:

For the year ended	September 30, 2024		September 30, 2023		Change
Accounting fees	$	350,407	$	272,040	$	78,367
Consulting fees		2,855,032		2,082,956		772,076
Depreciation		93,907		126,234		(32,327	)
Investor relations		605,993		1,409,316		(803,323	)
Legal fees		864,112		709,217		154,895
Management fees		84,581		-		84,581
Marketing		1,199,050		2,658,515		(1,459,465	)
Office and general		940,979		898,189		42,790
Personnel expenses		1,762,012		2,058,128		(296,116	)
Provision for contract settlement		1,252,076		-		1,252,076
Rent		60,079		10,383		49,696
Research and development		8,261,915		4,222,339		4,039,576
Share based payments		1,961,724		965,393		996,331
Travel and meals		275,036		441,131		(166,095	)
Total operating expenses	$	20,566,903	$	15,853,841	$	4,713,062

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

●	Consulting fees increase of $772,076 is related to higher fees paid to the Company’s financial advisors ($ 938,562), which was partially offset by lower business development costs ($150,948) and European grant consulting team ($81,432). Other general consulting expenses increased by $65,894 when compared to the previous year.

●	The investor relations decrease of $803,323 is mostly attributed to lower expenditure in the corporate and business strategy ($423,435), public relations ($254,313), and capital markets consultants ($56,663). Other general investor relations decreased by $68,912 when compared to the previous year.

●	Legal fees increased by $154,895 when compared to the previous year mainly due to special projects conducted by the Company with the support of external counsel.

●	The decrease of $1,459,465 in marketing is mostly related to lower investments in marketing and investor awareness ($387,065), video production ($360,000), digital marketing services ($342,819), and spatial web adoption services ($126,000). Other general marketing activities represented a reduction of $243,581.

●	Personnel expenses decreased by $296,116 mainly due to lower expenses with the general and administrative overhead.

●	Research and development (“R&D”) increased by $4,039,576 as the Company increased the size of the team to focus on development of its products. R&D is compounded by payroll, payroll benefits, payroll taxes, independent contractors, and hosting related costs.

●	Share based compensation increased by $996,331 due to new grants of stock options and RSUs in July and April ($1,810,891), which was partially offset by lower accrual of the graded vesting of stock options granted to employees and strategic consultants of the Company ($69,292), lower valuation of the restricted stock units granted to the employees and strategic consultants of the Company ($304,664), and the revaluation of the modification of broker’s warrants that happened in the last year ($440,604).

Other items

During the period ending September 30, 2024, other items amounted to an income of $1,824,000, which is an increase of $2,194,360 from an expense of $370,360 during the period ending September 30, 2023. The changes in other items were impacted by the following items:

For the year ended	September 30, 2024			September 30, 2023			Change
Interest expense	$	(293,038	)	$	(344,628	)	$	51,590
Accretion expense		(453,839	)		(203,918	)		(249,921	)
Other income		49,970			178,186			(128,216	)
Legal claim expense		56,034			-			56,034
Gain on derivative liability		2,464,873			-			2,464,873
Total other items	$	1,824,000		$	(370,360	)	$	2,194,360

	●	Interest expense decrease relates to the interest accrual of the convertible debentures.

	●	Accretion expense attributable to convertible debenture.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

	●	Other income consisted of interest income from interest-bearing accounts.

	●	The changes in the estimates in the Monte-Carlo binomial model, resulted in a gain on the fair value of derivative liability of the convertible debenture of $2,464,873.

LIQUIDITY AND CAPITAL RESOURCES

For the period ended	September 30, 2024			September 30, 2023			Change
Cash used in operating activities	$	(16,219,022	)	$	(15,536,135	)	$	(682,887	)
Cash used in investing activities		(428,678	)		(411,152	)		(17,526	)
Cash provided (used in) financing activities		18,213,316			24,135,529			(5,922,213	)
Foreign exchange effect on cash		(221,845	)		(189,332	)		(32,513	)
Net change in cash during the period	$	1,343,771		$	7,998,910		$	(6,655,139	)

Cash used in operating activities is comprised of net loss, add-back of non-cash expenses, and net change in non-cash working capital items. Cash used in operating activities increased to $682,887 in the period ended September 30, 2024 from $15,536,135 in the period ended September 30, 2023. The increase is mostly attributed to the higher loss adjusted by items not involving cash in the period ended September 30, 2024 ($2,598,905).

The decrease in financing activities is due to a reduction of net proceeds from the issuance of equity instruments ($6,719,607), issuance of units ($5,211,879), special warrants ($2,283,733), and repayment of promissory notes ($2,000,000). The decrease was partially offset by the issuance of convertible debentures ($10,000,000), grant received ($226,877) and lease payments ($66,128).

The Company has historically raised sufficient funds to carry out its growth plans, in part, on the continuation of its agreements and investor support. The Company will continue to rely on such support to generate sufficient amounts of cash and cash equivalents to maintain capacity, satisfy short and long term capital requirements, and meet planned growth objectives. The ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions and its success with its strategic collaborations. Any quoted market for the Company’s shares may be subject to market trends generally, notwithstanding any potential success of the Company in creating new revenues, cash flows or earnings.

The Company’s ability to continue its operations and to realize its assets at their carrying values is dependent upon obtaining additional financing and generating revenues sufficient to cover its operating costs. The necessity that the Company raise sufficient funds to carry out its growth plans are conditional, in part, on the continuation of its agreements and investor support. The material uncertainty raised by these events and conditions may cast substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not give effect to any adjustments, which would be necessary should the Company be unable to continue as a going concern. In such circumstances, the Company would be required to realize its assets and discharge its liabilities outside of the normal course of business, and the amounts realized could differ materially from those reflected in the accompanying condensed consolidated interim financial statements.

The Company’s condensed consolidated interim financial statements have been prepared on a going concern basis which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has incurred losses since inception and has not yet achieved profitable operations. The Company has been relying on debt and equity financing to fund its operation in the past. While the Company has been successful in securing financing to date, there can be no assurances that it will be able to do so in the future. As noted in the report of our independent public accountants for our financial statements for the year ended March 31, 2024, the aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that such audited annual financial statements were issued.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

Historically, the Company has used net proceeds from issuances of debt and equity to provide sufficient funds to meet its near-term asset development plans and other contractual obligations when due. Management plans to fund operations of the Company with its current working capital and through additional equity and/or debt financings. Management believes that this plan provides an opportunity for the Company to continue as a going concern.

In view of these matters, continuation as a going concern is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to, meets its financial requirements, raise additional capital, and the success of its future operations.

The Company’s long-term capital requirements may vary materially from those currently planned and will depend on many factors, including the rate of net sales growth, the timing and extent of spending on research and development efforts and other growth initiatives, the expansion of sales and marketing activities, the timing of new products, and overall economic conditions. The ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions and its success with its strategic collaborations. Any quoted market for the Subordinate Voting Shares may be subject to market trends generally, notwithstanding any potential success of the Company in creating new revenues, cash flows or earnings. The sale of additional equity would result in additional dilution to the Company’s shareholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that may restrict our operations. There can be no assurances that we will be able to raise additional capital on terms that are attractive to us or at all. The inability to raise capital would adversely affect our ability to achieve our business objectives.

COMMITMENTS

The Company has an obligation to pay royalties to Cyberlab, LLC (a company owned by a director and officer). Cyberlab shall be entitled to receive a share of the gross revenue derived from the sales, licensing and other commercial activities involving Spatial Domain Names, pursuant to the following schedule:

	●	Years 1 through 10 of the Spatial Domain Program: Cyberlab shall be entitled to Five Percent (5%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Five Percent (95%) to allocate between itself and other Spatial Domain Program stakeholders (e.g. registries, registrars, etc.) as it sees fit.
	●	Years 11 through 14 of the Spatial Domain Program: Cyberlab shall be entitled to retain Four Percent (4%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Six Percent (96%).
	●	Years 15 through 17 of the Spatial Domain Program: Cyberlab shall be entitled to retain Three Percent (3%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Seven Percent (97%).
	●	Years 18 and 19 of the Spatial Domain Program: Cyberlab shall be entitled to retain Two Percent (2%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Eight Percent (98%).
	●	Years 20 through 25 of the Spatial Domain Program: Cyberlab shall be entitled to retain One Percent (1%) of all gross revenue from the Spatial Domain Program, while VERSES shall retain the remaining Ninety-Nine Percent (99%).

As of September 30, 2024, no amounts are payable under the royalties agreement.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

OUTSTANDING SHARE CAPITAL

As at

The date of

this MD&A

September 30, 2024

Shares issued to Class A Subordinate Voting Share shareholders

173,915,652

168,107,952

OUTSTANDING WARRANTS

As at		The date of this MD&A		September 30, 2024
Warrants			41,053,824		37,759,974
Special Warrants	(Note 1)		3,600,000		-
			44,653,824		37,759,974

(1)

Each Special Warrant is exercisable, at no additional costs, for one unit of the Company (each, an “Equity Unit”). Each Equity Unit consists of one Class A Subordinate Voting share of the Company (a “Share”) and one-half of one Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will entitle the holder thereof to acquire one Share at an exercise price of CAD$0.70 per Share, subject to adjustment in certain circumstances, for a period of 36 months from November 8, 2024.

OUTSTANDING STOCK OPTIONS

As at

The date of

this MD&A

September 30, 2024

Stock options

17,865,505

OUTSTANDING RESTRICTED SHARE UNITS (“RSUs”)

As at

The date of

this MD&A

September 30, 2024

RSUs

(Note 1)

13,415,000

Note:

(1)

RSUs are convertible into one Subordinate Voting Shares or payable in cash.

TRANSACTIONS WITH RELATED PARTIES

The Company’s related parties consist of directors, executive officers, and companies owned in whole or in part by those individuals. Transactions are measured at the exchange amount, which is the amount agreed to by the parties.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and senior officers.

The following salaries, fees, and expenses were incurred:

	Three months ended					Six months ended
	September 30,					September 30,
	2024		2023			2024			2023
Management fees	$	59,455	$	-		$	84,581		$	-
Management salaries and benefits included in personnel expenses		464,884		455,970			770,635			727,507
Share-based payments		34,914		(90,197	)		(67,827	)		225,288
	$	559,253	$	365,773		$	787,389		$	952,795

The following management members incurred in the salaries and management fees:

	Three months ended				Six months ended
	September 30,				September 30,
	2024		2023		2024		2023
Management salaries, Chief Executive Officer and Founder		212,811		186,565		310,622		268,129
Management salaries, President and Founder		82,683		144,726		165,365		215,952
Management salaries, Chief Financial Officer		105,795		64,650		172,875		129,300
Management salaries, Chief Operating Officer		63,595		60,029		121,773		114,127
Management fees, Chair of the Board of Directors		59,455		-		84,581		-
Total	$	524,339	$	455,970	$	855,216	$	727,508

Included in due from related parties at September 30, 2024 were amounts totaling $2,268,857 (March 31, 2024 - $1,937,270) due from companies controlled by key management personnel, and a loan granted to one member of the management of the Company. These amounts are unsecured, interest-free, and settlement generally occurs in cash.

	-	$1,201,986 (March 31, 2024 - $954,150) was paid as pre-payment of royalties owing to Cyberlab, LLC (“Cyberlab”), an entity controlled by Dan Mapes, President and a director of the Company. Such royalties are payable and due upon the commercialization of spacial domains. This amount is unsecured and interest-free.
	-	$1,066,871 (March 31, 2024 - $918,184) was paid as advances to support the Spatial Web Foundation, an entity controlled Gabriel Rene, CEO and a director of the Company. The Spatial Web Foundation is currently developing standards for the ethical interoperability between augmented and virtual reality, which the Company considers essential for the proper development of Web 3.0. This amount is unsecured and interest-free.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

Also, included in the amounts due from related parties, is a loan of $66,512 (March 31, 2024 - $64,936) to a key member of the management team that is unsecured and has an annual interest rate of 5% and requires principal and interests to be paid in full by May 1, 2033. No repayments were made in the period ended September 30, 2024.

This amount was advanced to Michael Wadden, Chief Commercial Officer of the Company, as a loan to allow Mr. Wadden to discharge taxes owing in connection with equity compensation granted by the Company. This loan is unsecured and has an annual interest rate of 5% and requires principal and interests to be paid in full by May 1, 2033. No repayments were made in the year ended March 31, 2024.

CRITICAL ACCOUNTING ESTIMATES

	●	Equipment – The Company reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utilization of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utilization of equipment.

	●	Recoverability of accounts receivable, contracts assets, and unbilled revenues, and allowance for credit loss – The Company provides an allowance for the expected credit losses based on an assessment of the recoverability of accounts receivable. Allowances are applied to accounts receivable at initial recognition based on the probability of default by the customers. Management analyzes historical bad debts, customer concentrations, customer creditworthiness, current economic trends, and changes in customer payment terms when making a judgment to evaluate the adequacy of the allowance for expected credit losses. Where the expectation is different from the original estimate, such difference will impact the carrying value of accounts receivable.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

	●	Share-based payments – The fair value of stock options granted and compensatory warrants are measured using the Black-Scholes option pricing model. Measurement inputs include share price on measurement date, exercise price of the option, expected volatility, expected life of the options, expected dividends, and the risk-free rate. The Company estimates volatility based on its historical share price or historical share price of comparable companies, excluding specific time frames in which volatility was affected by specific transactions that are not considered to be indicative of the entities’ expected share price volatility. The expected life of the options and warrants is based on historical experience and general option holder behavior. Dividends were not taken into consideration as the Company does not expect to pay dividends.

	●	Convertible debenture – The convertible debenture included an option which can be settled in the Company’s Subordinate Voting Shares. Therefore, the value of the convertible debenture was separated into its liability and derivative components on the consolidated statements of financial position. The liability component is initially recognized at fair value, calculated at the net present value of the Convertible debenture, and the derivative component is fair valued based on the Monte Carlo simulation model and estimations are provided by the management. The effective interest rate used is the estimated rate for non-convertible debt with similar terms at the time of issue.

	●	Income tax – Income tax expense is comprised of current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity. Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

FINANCIAL INSTRUMENTS

IFRS 13 Fair Value Measurement establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. IFRS 13 prioritizes the inputs into three levels that may be used to measure fair value:

● Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities.

● Level 2 – Inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs (i.e., quoted prices for similar assets or liabilities).

● Level 3 – Prices or valuation techniques that are not based on observable market data and require inputs that are both significant to the fair value measurement and unobservable.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

The carrying value of the Company’s other financial instruments approximate their fair values due to their short-term maturities.

There were no transfers between the levels of the fair value hierarchy during the period.

As of September 30, 2024	Level 1		Level 2		Level 3		Total
Assets:
Cash and restricted cash	$	2,236,498	$	-	$	-	$	2,236,498
Shares subscription receivable	$	2,042,307	$	-	$	-	$	2,042,307
Due from related parties	$	2,335,369	$	-	$	-	$	2,335,369
Liabilities:
Accounts payable and accrued liabilities	$	3,977,199	$	-	$	-	$	3,977,199
Convertible debenture	$	-	$	5,569,555	$	2,926,151	$	8,495,706
Provision for legal claim	$	6,307,258	$	-	$	-	$	6,307,258
Restricted share unit liability	$	-	$	1,157,224	$	-	$	1,157,224
Loans payable	$	139,660	$	-	$	-	$	139,660

As of March 31, 2024	Level 1		Level 2		Level 3		Total
Assets:
Cash	$	892,727	$	-	$	-	$	892,727
Accounts receivable	$	100,000	$	-	$	-	$	100,000
Due from related parties	$	1,937,270	$	-	$	-	$	1,937,270
Liabilities:
Accounts payable and accrued liabilities	$	2,865,002	$	-	$	-	$	2,865,002
Promissory notes	$	2,000,000	$	-	$	-	$	2,000,000
Provision for legal claim	$	6,307,258	$	-	$	-	$	6,307,258
Restricted share unit liability	$	-	$	576,214	$	-	$	576,214
Loans payable	$	140,904	$	-	$	-	$	140,904

Credit risk

Amounts due from related parties of $2,335,369 (March 31, 2024 - $1,937,270) are due from companies controlled by key management personnel. These amounts are expected to be settled through future services agreements, and as such, credit risk is assessed as low. As of March 31, 2024, management assessed that there is no need to provide a credit loss allowance.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

Liquidity risk

Contractual cash flow requirements as of September 30, 2024, were as follows:

	<1 year $		1-2 years $		2-5 years $		>5 years $		Total $
Accounts payable and accrued liabilities		3,977,199		-		-		-		3,977,199
Convertible debenture		-		10,286,195		-		-		10,286,195
Loans payable		7,752		7,752		23,256		100,900		139,660
Total		3,984,951		10,293,947		23,256		100,900		14,403,054

As of September 30, 2024, the Company had working capital deficit of $12,947,693 (March 31, 2024 - $7,270,243)

Foreign exchange risk

Interest rate risk

Price risk

SIGNIFICANT PROJECTS NOT GENERATING REVENUE

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The information included in the consolidated financial statement and this MD&A is the responsibility of management, and their preparation requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amount of expenses during the reported period. Actual results could differ from those estimates.

VERSES AI INC.

Management’s Discussion and Analysis

As of November 14, 2024

RELIANCE ON KEY PERSONNEL

The success of the Company will be largely dependent upon the performance of its management and key employees and contractors. In assessing the risk of an investment in the shares of the Company, potential investors should realize that they are relying on the experience, judgment, discretion, integrity and good faith of the proposed management of the Company.

CONFLICTS OF INTEREST

Certain directors and officers of the Company will be engaged in, and will continue to engage in, other business activities on their own behalf and on behalf of other companies. As a result of these and other activities, such directors and officers of the Company may become subject to conflicts of interest. The BCBCA provides that in the event that a director or senior officer has a material interest in a contract or proposed contract or agreement that is material to the issuer, the director or senior officer must disclose his or her interest in such contract or agreement and a director must refrain from voting on any matter in respect of such contract or agreement, subject to and in accordance with the BCBCA. To the extent that conflicts of interest arise, such conflicts will be resolved in accordance with the provisions of the BCBCA. To the knowledge of the management of the Company, as at the date of this MD&A, there are no existing or potential material conflicts of interest between the Company and a director or officer of the Company, except as otherwise disclosed in this MD&A.

DIVIDENDS

To date, the Company has not paid any dividends on its outstanding Subordinate Voting Shares. Any decision to pay dividends on the shares of the Company will be made by the Board of Directors on the basis of the Company’s earnings, financial requirements and other conditions.

LIMITED OPERATING HISTORY

The Company was incorporated in November 2020 and has yet to generate a profit from its activities. The Company will be subject to all of the business risks and uncertainties associated with any business enterprise, including the risk that it will not achieve its growth objective. The Company anticipates that it may take several years to achieve positive cash flow from operations. There is no certainty that the Company will produce revenue, operate profitably or provide a return on investment in the future.

OTHER RISK FACTORS

The Company is subject to a number of other risks and uncertainties and is affected by several factors which could have a material adverse effect on the Company’s business, financial condition, operating results, and/or future prospects. These risks should be considered when evaluating an investment in the Company and may, among other things, cause a decline in the price of the Company’s securities. The risks and uncertainties which management considered the most material to the Company’s business are described in the section entitled, “RISK FACTORS” of the Company’s Annual Information Form filed on SEDAR on July 2, 2024.

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

Disclosure controls and procedures (“DC&P”) are intended to provide reasonable assurance that information required to be disclosed is recorded, processed, summarized, and reported within the time periods specified by securities regulations and that the information required to be disclosed is accumulated and communicated to management. Internal controls over financial reporting (“ICFR”) are intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. In connection with National Instrument 52-109 (Certificate of Disclosure in Issuer’s Annual and Interim Filings) (“NI 52-109”), the Chief Executive Officer and Chief Financial Officer of the Company have each delivered a certificate in form provided for in 52-109F2 - Certification of Interim Filings with respect to the Company’s DC&P and ICFR and the financial information contained in the consolidated financial statements for the period ended September 30, 2024 and this accompanying MD&A.

Changes in internal control over financial reporting

Since adoption on November 1, 2021, and during the period beginning on April 1, 2024 and ended on September 30, 2024, there have been no changes in the Company’s ICFR that have materially affected, or is reasonably likely to materially affect, the Company’s ICFR.

ADDITIONAL INFORMATION

Additional information about the Company, including the financial statements, is available on the Company’s website at https://www.verses.ai and on SEDAR+ at www.sedarplus.ca.

Exhibit 99.3

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, GABRIEL RENE, Chief Executive Officer of Verses AI Inc., certify the following:

1.	*Review:* I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Verses AI Inc. (the “issuer”) for the interim period ended September 30, 2024.

2.	*No misrepresentations:* Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.	*Fair presentation:* Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.	*Responsibility:* The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	*Design:* Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

- 2 -

5.1	*Control framework:* The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (2013 Framework) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2	N/A

*5.3*	*N/A*

6.	*Reporting changes in ICFR:* The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2024 and ended on September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 14, 2024

“Gabriel Rene”

GABRIEL RENE
Chief Executive Officer

Exhibit 99.4

Form 52-109F2

Certification of Interim Filings Full Certificate

I, KEVIN WILSON, Chief Financial Officer of Verses AI Inc., certify the following:

1.	*Review:* I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Verses AI Inc. (the “issuer”) for the interim period ended September 30, 2024.

2.	*No misrepresentations:* Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.	*Fair presentation:* Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.	*Responsibility:* The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	*Design:* Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)

- 2 -

5.1	*Control framework:* The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (2013 Framework) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2	N/A

*5.3*	*N/A*

6.	*Reporting changes in ICFR:* The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2024 and ended on September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 14, 2024

“Kevin Wilson”

KEVIN WILSON
Chief Financial Officer

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