An anonymous director reports

VERSES ANNOUNCES PRIVATE PLACEMENT OF SPECIAL WARRANTS AND CLOSING OF FIRST TRANCHE

Verses AI Inc. has arranged a non-brokered private placement of special warrants for gross proceeds of up to $10-million through the sale of 10 million units at a price of $1.00 per special warrant. The company is further pleased to announce that it has closed the first tranche of the private placement, which consisted of seven million units for gross proceeds of $7-million.

Each special warrant shall convert into one unit of the company 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 comprises one Class A subordinate voting share of the company, and one-half of one Class A subordinate voting share purchase warrant. Each unit warrant shall be exercisable into one Class A subordinate voting share of the company at a price of $1.50 per unit warrant share for a period of two years from the date of issue of the unit warrants.

The proceeds received from the private placement are to be used for general corporate and working capital purposes, for the continued development of Genius and the release of the Genius beta program, and the repayment of outstanding loans. In particular, $2-million (U.S.) of the proceeds received will be used to repay the outstanding principal amount of loans accepted by Verses Technologies USA Inc., a wholly owned subsidiary of the company, from two arm's-length investors, as further described in the company's news release dated March 18, 2024. All securities issued pursuant to the private placement will be subject to a four-month hold period from the date of issue.

Under the first tranche of the private placement, the company paid fees to eligible finders consisting of: (i) $90,400; and (ii) 90,400 finder warrants. Each finder warrant will be exercisable into one unit at a price of $1.00 per finder unit until the date that is two years from the date of issue of the finder warrants, which finder unit will comprise a Class A subordinate voting share of the company and one-half of one Class A subordinate voting share purchase warrant. Each finder unit warrant shall be exercisable into one Class A subordinate voting share of the company at a price of $1.50 per finder unit warrant share for a period of two years from the date of issue of the finder unit warrants.

A director and an officer of the company purchased an aggregate of 76,582 special warrants under the first tranche of the private placement and such participation is considered to be a related party transaction as defined in Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (61-101). The company has relied on the exemptions from the formal valuation and minority shareholder approval requirements of 61-101 in respect of such insider participation as neither the fair market value of the securities issued to the related parties nor the consideration for such securities exceeded 25 per cent of the company's market capitalization. The company did not file a material change report more than 21 days before the expected closing of the first tranche of the private placement, as the details and amounts of the insider participation were not finalized until closer to the closing and the company wished to close the transaction as soon as practicable for sound business reasons.

The special warrants were offered to investors in both Canadian dollar and United States dollar denominations and as such, the aggregate proceeds from the first tranche of the private placement were determined in part by using an exchange rate of $1.00 (U.S.):$1.3699 (Canadian).

About Verses AI Inc.

Verses AI is a cognitive computing company specializing in biologically inspired distributed intelligence. Its flagship offering, Genius, is patterned after natural systems and neuroscience. Genius can learn, adapt and interact with the world. Key features of Genius include generalizability, predictive queries, real-time adaptation and an automated computing network. Built on open standards, Genius transforms disparate data into knowledge models that foster trustworthy collaboration between humans, machines and artificial intelligence, across digital and physical domains. Imagine a smarter world that elevates human potential through innovations inspired by nature.

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