Verses AI: Misrepresented Partnerships, Fake Resumes, and Inflated Demand. Real Delisting Risk

  • Verses purports to develop next-generation artificial intelligence technology “modeled after the Wisdom and Genius of Nature”.
  • In Oct 2023, Verses announced beta testing for its flagship AI operating system known as Genius.
  • Management touted a beta program with 10 “hand-selected” partners. 6 were announced: 4 obscure (several already partners) and 2 well known:
    • Volvo Cars. Company reps, whom we contacted, were initially unaware of Verses but found a “very limited” relationship. As a result, Volvo forced Verses to remove its press release on February 25.
    • NASA-JPL. Reps were unaware of any relationship with Verses and noted obvious errors in the press release which violated NASA policies. Through a FOIA request, we confirmed NASA is not partnered with Verses.
  • An ex-Verses employee told us that as of the end of Jan 2024, Genius beta testing had not begun because Genius was not functional.
  • The former employee told us Verses grossly inflated beta program demand by claiming interest from >1,500 entities when sign-ups were < 150.
  • Verses touted a “significant revenue” contract with the largest national pharmacy retailer (CVS) in September 2023, but has provided no updates since. We doubt this contract exists.
  • Since the 1990s, CEO and President have led a series of commercial entities in trendy sectors: video games, 3DTVs, mobile networks. All are now defunct.
  • President claims he completed a PhD at UC Berkeley in Artificial Intelligence, but our investigation finds this is likely fabricated. He also misrepresents his undergraduate degree.
  • CEO’s LinkedIn profile lists a degree in Immersive Reality Design from a defunct, non-school company previously run by Verses’ President.
  • CEO and President co-wrote a book, advertising it as a “#1 International Bestseller”. The book was self-published on Amazon where the Bestseller label is a notorious scam.
  • Initial funding included ~$6m in private token sales (undisclosed in filings). A former employee believes dozens of token investors are underwater, including one who is suing Verses for non-payment of $3.6m.
  • Verses’ only significant revenue generating contract was signed with a shareholder 3 years ago for warehouse picking software. We believe this minor contract is in jeopardy.
  • In a little over a year, Verses has engaged at least 18 entities for stock promotion and investor relations.
  • It’s no surprise then that since going public in 2022, Verses’ has spent more on investor relations, marketing, and consulting fees ($17m) than R&D ($14m).
  • Verses spent approximately $200k on inane stunt marketing: “inviting” OpenAI to partner in a full-page NYT ad and a billboard in front of OpenAI’s HQ.
  • Verses published patent portfolio consists of one abandoned application examiners found lacked unity, novelty, and inventiveness.
  • We submitted evidence of the misrepresented and/or fabricated partnerships to Canadian securities regulators.

Disclosure: We are short Verses. Please see full disclaimer at bottom of report.

“Management, financial portfolios, insurance, computers, black leather gloves, research and development, putting in the man hours to study the science of what you need… Investors? Possibly You!” – Step Brothers, 2008

April 9, 2024 — We’re short Verses AI (OTC:VRSSF) (NEO:VERS), an artificial intelligence developer asserting technological breakthroughs that can among other things eradicate poverty, end hunger, and promote “life below water”. Rather than demonstrating the technology in meaningful detail or delivering on promised milestones, Verses has served investors techno-claptrap, empty partnership hype, and recurrent dilution to feed operating expenses primarily devoted to stock promotion, marketing, and consulting.

Since its founding in 2018, Verses has appeared desperate for status and clout. Management name-drops alleged connections with IMAX, Apple, and Google, trumpets its attendance at Davos, and recently bought a full-page ad in the NY Times, “inviting” OpenAI to collaborate on a superior approach to artificial general intelligence. We think the company’s C$280m diluted market capitalization is equally absurd.

Partnerships with highly regarded companies serve as endorsements for Verses. However, our investigation finds the partnerships with NASA and Volvo are misrepresented or fabricated. We also find Verses is inflating customer interest in Genius, its lead product, by 10x and that contrary to what management has been claiming for months, as of the end of January the product was not even functional.

The professional backgrounds of co-founders CEO Gabriel Rene and President Dan Mapes consist of a series of failed pivots from one fad to another beginning in the 1990s: video games, mobile phones, blockchain, AR/VR, and now AI. Rene, a former house music producer, and Mapes, who we find did not complete an AI PhD at Berkeley as he claims, have co-founded multiple entities that we believe were primarily created to confer legitimacy to Verses – for example the Spatial Web Foundation, a non-profit formed in 2017 for which we find no significant current operations.

Based on our belief that the company’s current technology is vaporware and leadership is unqualified, we have high conviction that Verses shares are substantially overvalued if not worthless. We submitted evidence of the misrepresented partnerships to Canadian securities regulators. Considering the evidence is clear cut, we believe there’s a high probability regulators intervene, posing near term existential risk for Verses.

Verses Investor Presentation – “Impact Everything”

Initial Funding with >$6m Unregistered Tokens Potentially Creates Undisclosed Liabilities

Verses purports to be developing protocols and software for the “spatial web”. Loosely defined, spatial web generally refers to a three-dimensional internet incorporating various technologies including blockchain, augmented and virtual reality, IoT, and artificial intelligence (see this overview).

Co-founders Gabriel Rene and Dan Mapes founded the company in 2018 initially as a non-profit called the Verses Foundation. In 2019, the organization was separated into a non-profit entity called the Spatial Web Foundation and a for-profit operation called Verses Labs (VSL) which at some point was renamed Verses Technologies USA (VTU). In June 2022, VTU was listed on the NEO exchange.

Although undisclosed in Verses filings, according to media reports the company was funded by over $6m in private token sales in 2018 and 2019. This is corroborated by a July 2022 lawsuit filed by a former employee who alleges non-payment of $3.6m in promised VSL tokens. In addition, the complaint alleges the token sales were illegal since Verses, Rene, and Mapes neither filed an SEC registration statement nor obtained an exemption.

We suspect multiple restructurings occurred converting token agreements into promised equity stakes in VSL. According to a former employee whom we spoke with, the restructurings put over 30 token investors underwater, creating a significant degree of “bad blood”, and legitimate claims to a class action lawsuit.

Verses Arbitrarily Searches for a Business, Lands on Artificial Intelligence

Like the name changes, Verses communications have morphed over the years, latching on to whatever is trending. In 2018 interviews, Rene emphasized the company’s connection to blockchain and tokenization. In 2019, Rene spoke less about blockchain and more about the company’s fit with virtual and augmented reality. In 2022, the focus shifted to artificial intelligence (VTU changed its name to Verses AI in March 2023).

Verses currently calls itself a “cognitive computing company” and flogs a platform called Genius, an artificial intelligence operating system ostensibly based on the “Wisdom and Genius of Nature”. While Genius has also undergone multiple name changes (previously known as COSM, KOSMOS, and KOSM) – the general idea behind it remains the same: an operating system upon which developers build apps, similar to Android or iOS but for artificial intelligence.

Verses has 149m shares outstanding, 42% of which are held by Rene and Mapes. In addition, there are 25m warrants, 15m options and 9m RSUs, yielding a fully diluted share count of 198m.

We think Genius accounts for nearly all of the value in Verses’ current stock price.

Genius Partnerships with NASA and Volvo are Misrepresented or Fabricated

NASA

In November 2023, Verses issued a press release titled “VERSES and NASA Partner to Pursue Standards for Space Industry”.  Verses claimed NASA’s Jet Propulsion Laboratory (JPL) was joining the Genius beta program to “explore interoperability and governance infrastructure for global space economy”.

The announcement implied the partnership was a natural fit because NASA also prioritizes interoperability and open standards. NASA is quoted:

“Interoperability of systems is critical to ensure safe and robust space exploration. Therefore, the Artemis Accords call for partner nations to utilize open international standards, develop new standards when necessary, and strive to support interoperability to the greatest extent practical, says NASA.”

However, this wasn’t a NASA spokesperson commenting on the partnership – it’s a quote from the NASA Artemis Accords website.

We contacted NASA JPL to confirm a partnership with Verses. A spokesperson said while she was not familiar with the Verses press release, it violated NASA policy with unauthorized use of NASA’s logo, and erroneously described Defense Advanced Research Projects Agency (DARPA) as part of NASA.

Even we knew NASA’s logo is prohibited from use by outside organizations so it’s difficult to believe an actual partner was unaware of the policy. NASA guidelines are unambiguous:

“The NASA Insignia (the blue “meatball” logo), the NASA Logotype (the “worm” logo) and the NASA Seal may not be used for any purpose without explicit permission. These images may not be used by persons who are not NASA employees or on products, publications or web pages that are not NASA-sponsored. These images may not be used to imply endorsement or support of any external organization, program, effort, or persons.”

We filed a FOIA request with NASA JPL for records pertaining to Genius beta testing. JPL’s response noted that while it found a record, “NASA did not fund or was involved with the record.”

JPL cited a section of its NASA contract that protects procurement records from disclosure, including “pre-decisional, or similar documents relating to [JPL’s] deliberative process in selecting subcontractors.”

An ex-Verses employee told us that other than management assurances, they saw no evidence of a partnership with JPL:

Former Verses employee: “I never saw a [JPL] signed contract… typically there’s an RFP, there’s SOWs, there’s all sorts of experimentation, there’s a sales cycle because we’re trying to understand and validate what’s going to be done, how, and by whom and when. But those things were non-existent.”

The former Verses employee believes the so-called partnership is closer to a casual agreement between a Verses employee and a personal connection at JPL.

Former Verses employee: “I’m working on a way to turn butter into gold. Would you be interested in it? You want to partner on that? And you would probably say, yeah…  Hey, we think this is gonna be amazing if it works, would you agree to come on board with us? And because there’s probably a pre-existing relationship, they we’re most likely saying, yeah, yeah.”

Volvo Cars

In December 2023, Verses announced Volvo was joining the Genius beta program, touting a collaboration “centered on assisted and autonomous driving safety”. Similar to the NASA announcement, the press release was short on details, for example what applications Volvo would be testing, when, and how they fit into Genius.

We contacted Volvo media and investors relations to confirm the partnership. A Volvo spokesperson said Verses did not appear to be a partner:

Two weeks later, the spokesperson reported that after an internal search, a “very limited” collaboration was found, and that Volvo Cars forced Verses to remove its press release (archived).

We spoke to a former Verses employee who said they never saw evidence of any formal partnership with Volvo:

NMR: “Regarding the Volvo partnership, how did that come about?”

Former Verses employee: “You know, there wasn’t any kind of partnership meeting… it was just another instance of one of our commercial advocates having a contact and persuading them to agree to work with Verses… Are we gonna have a GitHub? What are we doing? You know, how do they go in there and play with their data and get a sense of how this platform works. And you know, that never happened.”

We believe Volvo’s involvement with Verses barely qualifies as a “partnership”. Similar to what likely occurred with JPL, we think a Verses employee had a pre-existing relationship with someone at Volvo who casually agreed to join the Genius beta.

Verses Touts “Significantly Revenue Bearing” Contract with CVS. We Suspect Such a Contract Does Not Exist

Considering what appear to be fake or misrepresented partnerships with NASA and Volvo, we doubt the contract with a “national US pharmacy retailer” announced in September 2023 is as presented.

Oddly, while the pharmacy retailer wasn’t named, Rene called it a “Top 10 Fortune 100 enterprise” which can only mean CVS. According to the press release, Verses will address the alleged customer’s suboptimal warehouse operations by:

“…mapping the US pharmacy retailer’s enterprise data into a unified knowledge model, powered by its intelligence platform, KOSM™ and its WayFinder™ services that will run simulations in order to more accurately predict and streamline decision-making around purchasing, resourcing, sequencing, routing, and inbound and outbound flow of products.”

Consistent with Verses’ other grand announcements, little evidence is offered to substantiate that KOSM and Wayfinder are actually capable of doing what is being claimed. Rene called the deal “significantly revenue bearing” but as of the last reported quarter ending December 2023, no revenue from the contract is apparent – revenue was down 3% sequentially. Moreover,  neither of the last two MD&As mentioned the signing of a contract with a pharmacy retailer.

The former Verses employee expressed doubts about the CVS deal:

NMR: “Why did management not want to mention CVS explicitly?”

Former Verses employee: “My opinion is that [CVS] might not want to align themselves with us until we had a, you know, minimum viable product. And my opinion is that they might have seen, you know, the strategy is just to get a lot of beta testing developmental press releases out there to create the [appearance] of truth.

NMR: “You never saw a CVS contract?”

Former Verses employee: “No.”

In an attempt to confirm the CVS deal, we sent messages to Verses, CVS, and a company called SimWell who is supposedly serving as “integration consultant” for the partnership. We have not received any response at the time of publishing.

Fake and Misrepresented NASA and Volvo Collaborations Continue to be Heavily Promoted

Since the initial announcements, Verses has aggressively touted the partnerships with NASA and Volvo. In a February 14 investor presentation, James Hendrickson, Verses GM of Enterprise, presented a slide highlighting relationships with NASA and Volvo:

“So, who has been using [Genius] or who is interested in this? Because it sometimes can be a bit of a big story to understand… we need big partners and a big approach and a big view on the world. And I’m not sure that you can have a bigger view on the world than the view through NASA. So, we are working with NASA… and Volvo the largest EU auto manufacturer.”

Note that Volvo is not the largest EU auto manufacturer and as of January 2022 was not even in the top 5 (Hendrickson could’ve used ChatGPT). While this is a relatively minor point compared to misrepresenting a partnership so badly that your supposed partner forced removal of your press release, it’s another amateurish blunder.

Hendrickson’s full presentation is a great example of the empty word-salad spread by Verses management. When asked to explain how the Genius platform can also be a product Hendrickson answers [23:00]:

“In this case a platform can also be a product, and in this case the platform is the product, where a product in a non-platform sense solves a problem or a small set of problems, whereas a platform is something that can be built upon and others can use to extend to build out to solve many, many problems, in this case nearly all problems if we’re being honest with ourselves…”

While Volvo Cars forced Verses to remove it’s press release after our inquiries, a link to the announcement distributed by GlobeNewswire is still on the Verses website and the logos of NASA, JPL, and Volvo are displayed on the website, violating the copyright policy of all 3 organizations.

Verses Fabricates Customer Interest in Genius, Actual Demand 90% Below Claims

When Genius beta testing was supposedly launched in October, Verses claimed it would be rolled out to a “select group of ten private beta partners”. At the time of Hendrickson’s February presentation only 5 had been announced, the last being Volvo over two months ago. In response to a question asking why Verses has not announced more beta partners, Hendrickson explains Verses is a victim of its own success:

“We got some feedback [from beta partners] saying ‘hey you’re flooding the market with these beta announcements, maybe slow down a little bit’. We frankly got more beta customers and partners signing up than we can handle, and we are working through that list… it’s a little overwhelming… we got so many that we’ve been trying to manage them appropriately and give them the attention and white glove service that they deserve.”

In October 2023, Verses claimed demand for Genius was overwhelming, with over 1,500 sign-ups for early access:

“We’ve been overwhelmed by the early demand from more than 1,500 developers, engineers and large enterprises that have already requested early access to Genius. Although many will have to wait for public beta, we believe the time has come to give a sneak peek of Genius’™ capabilities so that everyone can see the potential of this technology.”

Unfortunately, this appears to be another fabrication. According to a former employee we spoke to, 1,500 was the approximate number of website opt-ins including requests for company information and inquiries for any Verses product, while sign-ups for Genius only totaled around 150.

Verses Falsely Touts Management Employment at High Profile Companies

During the same presentation, Hendrickson touts a Verses management team with experience from notable companies:

However, a LinkedIn search for each team member shown reveals none of them worked at IBM, Intel, Amazon, Apple, or SAP.

Verses Has Promoted a Platform Beta Launch and Suspect Partnerships Going Back to 2018

Verses management has made suspect claims ever since the company’s founding in 2018. Then known as the “Verses Foundation”, the company was developing a new protocol for “interoperability across different emerging technologies”. In an August 2018 interview at the “Blockchain Futurist Conference”, Rene claimed Verses had in February 2018 developed a minimum viable product (a functional product with enough features to be useful):

“We hit MVP about six months ago, our proof-of-concept stage when we were confident, we were going to be able to deliver this at scale.”

Rene said the beta version would launch by the end of 2018, and that Verses already had signed “20 partners to do pilots across 20 different industries” including entertainment, robotics, and aeronautics.

During his presentation at the conference, Rene touted a Verses team from companies like Apple, Microsoft, Google, Samsung, Goldman Sachs, Mercedes Benz, and UNICEF.

He also presented a slide listing 22 partners including IMAX and relatively obscure crypto and AR/VR companies. IMAX would supposedly use Verses technology to produce AR and VR content.

Like the Volvo Cars, NASA, and CVS partnerships, we believe the IMAX partnership was fabricated or misrepresented. An internet search of Verses and IMAX only produces a 2018 article from LA Business First and YouTube videos from the 2018 Blockchain Futurist Conference. We were also unable to find corroborating evidence for most of the other alleged partners such as Fisherman Labs and Symbioses.

In a November 2018 interview, Rene claimed 25 beta partners had “signed up in the last 6 weeks”, which conflicts with his statement in August 2018 when he said Verses had 20 beta partners. The 25 beta partners apparently regressed into a “number of sort of alpha partners”, at least that’s how Rene described them in an October 2019 interview in which he said the alpha partners were moving into beta at the end of 2019, with a full global public launch of Verses’ new web protocol technology in the summer of 2020. Rene said Verses was targeting a “large symposium” for Q1 2020 where the company would demonstrate “functional demos” for applications in supply chain, retail, entertainment, and smart cities with multiple partners.

We found no evidence that a beta program occurred at the end of 2019, nor evidence that Verses had multiple partnerships let alone held a partner symposium in Q1 2020.

We believe the beta Rene was referring to in 2018 and 2019 is the same one that by July 2022 had not yet begun but according to Rene was supposedly receiving massive demand:

“We have a long list of, 100s of interested parties that want to be beta developers on top of the KOSM supply chain, many of whom are Fortune 500 companies.”

In September 2023, after Verses officially announced the Genius beta launch:

“Genius beta rollout is expected to begin in October with early access limited to private beta partners and developers through the end of the year.  The public release of Genius is expected in early 2024. With this list of milestones, VERSES demonstrates its leadership, innovation, and commitment to shaping the conversation around AGI.”

In a November 2023 interview, Rene pushed back to public launch to Spring 2024 [6:30]:

“We’re doing a 6-month pilot with 10 hand-selected customers across several different industries. In the Spring we’re going to open this up for developers.”

We spoke to an ex-Verses employee who told us that as of the end of January, no beta testing had occurred because Genius was not functional. Considering Rene was claiming Verses had a functional product in early 2018 and a beta launch by the end of that year, we’re not surprised the latest claims and milestones have been missed.

And while Rene claimed the enormous beta demand would be limited to “hand-selected” partners, the reality is quite different. In 6 months, only 6 partners have been announced: NASA and Volvo are fake and/or misrepresented, and the other 4 are obscure counterparties, 3 of whom were already linked with Verses in partnerships that were initially hyped but have produced little more than press releases.

Verses Hypes Partnerships That Invariably Go Nowhere

The latest Genius beta partner announced, Blue Yonder, was already partnered with Verses. In November 2022, Verses reported Blue Yonder, a supply chain management company, would resell the company’s “adaptive intelligence and Spatial Twin management applications”. It’s not explicitly clear which Verses product this referred to, but it was likely Wayfinder since Verses has  no other products available for sale.

This partnership appears to have produced little more than two additional press releases: in May 2023, Verses reported it was demonstrating Wayfinder at a Blue Yonder conference in Las Vegas, and in June 2023, Verses announced the release of the Wayfinder AI Routing Agent, which to us sounds like Wayfinder with a new name.

Verses has not reported any revenue from this partnership. In the company’s FY Q3 update published in September 2023, Rene blamed the lack of sales on “some mid-year executive turnover”.

Whether it’s IMAX, Blue Yonder, CVS, or dozens of blockchain companies, the pattern is unbroken: Every Verses partnership, assuming it’s real, has failed. And while management advertises interest from a “parade of Fortune 500s”, the partners are mostly obscure. For example, besides Blue Yonder, all of the below listed partners are minor nano-caps.

Only Significant Revenue Generating Product Now De-Emphasized

The only Verses product currently for sale is Wayfinder, a warehouse picking software system. Despite marketing Wayfinder since 2019, Verses only managed to sign one revenue generating contract in August 2021 with an obscure customer who was also a Verses shareholder. Since then, this customer/investor, a third-party logistics company called NRI, has accounted for most of Verses revenue: 80% of the $1.4m in revenue through the first 9 months of 2023 was from NRI.

After Verses was listed in June 2022, Rene aggressively promoted the market opportunity for Wayfinder. In one interview, he claimed Verses generated C$34m in bookings its first year in operation, referring to the NRI contract. This misrepresents the NRI contract which has two terms – the first includes payments of C$12m over 6 years, after which NRI has the option to renew for a second term of 4 years.

He went on to claim Verses signed five “6-figure” Wayfinder pilots that he expected would result in “7 and 8 figure” contracts which he expected to begin closing before the end of 2022:

“We expect to convert these [5 pilots] similarly to 7 and 8 figure contracts in the next couple of quarters and without giving any specific names these are all Fortune 500 companies: the largest auto manufacturers, the largest pharmaceutical companies, consumer products companies and even a project with the European Commission to help set up the infrastructure for an AI powered drone flight across 5 countries.”

According to Rene, Verses was fielding interest from a “parade of Fortune 500s” and was finalizing several large reseller agreements with the largest warehouse management companies in the world operating in 80 countries.

In a July 2022 interview, Rene claimed the “5 or 6” pilots were with widely known companies that do $40-100bn in annual revenue. According to Rene, the challenge for Verses wasn’t generating demand, but scaling to meet it.

But despite the hype, Verses never signed any 7 or 8 figure contracts other than the NRI deal which we believe is encountering issues. It appears Verses is de-emphasizing Wayfinder. After featuring prominently on the Verses website since 2021 (then known as Quicksilver), as of January Wayfinder has been removed.

Verses homepage December 2023

Verses homepage today

Moreover, Verses appears to be having trouble collecting payment from NRI. In the latest quarterly report filed on February 14, accounts receivable ballooned by $1.2m in FY 2023, nearly the amount due from NRI ($350k per quarter).

The filing discloses that subsequent to the quarter, Verses collected $920k of the accounts receivable balance, and converted a Simple Agreement for Future Equity (SAFE) held by NRI into 658k shares priced at CAD$2.05 [Pg. 27]. The timing of what appears to be a payment from NRI and the conversion of NRI’s equity stake is more than coincidental, in our view.

The failure of Verses to sell Wayfinder to anyone outside of a customer who also happens to be an investor despite what Rene said was a “parade of Fortune 500” demand is the Verses story in a nutshell.

Management Background: CEO and President Left Wake of Defunct Entities

Rene and Mapes often tout decades of experience in technology. However, we find both led or were involved in a series of obscure and now mostly defunct entities.

Dan Mapes

Dan Mapes’ LinkedIn profile begins with eCity Studios, a digital media company which he founded in 1998. In 2000, a marketing company called VSI acquired eCity from Oz Entertainment, where Mapes was CTO. Oz Entertainment was attempting to build a theme park in Kansas based on The Wizard of Oz. One year later, VSI sold eCity for a $1.2m loss. VSI filed for bankruptcy in 2002.

Between 2002-2006, Mapes was Founder and President of Deep Light, a 3D television company. A 2006 patent application filed by Deep Light was abandoned. Deep Light is defunct, officially dissolving in 2010.

In 2006, Mapes and Rene co-founded MagNet Solutions, a digital marketing company. We found one piece of MagNet business: an agreement with an entity called Privileged World Travel Club in 2012 for services in exchange for $60k and a revenue sharing arrangement. MagNet is defunct, dissolving in 2012.

In 2010, Mapes founded and was CEO of Cyberlab Technologies which according to its website, is an “award-winning global medialab with offices in Los Angeles, Seattle and Beijing.” Dozens of notable customers are named on Cyberlab’s homepage, including “Gobachev Foundation” (sic). Cyberlab also claims “Nobel Committee” as a customer, although it’s unclear what this refers to. According to the aforementioned July 2022 lawsuit, Cyberlab was dissolved in 2022.

Opencorporates shows Mapes was an officer at over 15 defunct entities not listed on his LinkedIn.

Gabriel Rene

Gabriel Rene’s LinkedIn profile begins at an entity called Cyberlab 7 in 1992, where he was Senior Sound Design Engineer. Cyberlab 7 is presumably a precursor to the Cyberlab listed on Mapes LinkedIn.

In 1997, Rene and Mapes co-founded the World Internet Center (WIC). A search of opencorporates did not produce any relevant results. It’s possible WIC was a branch of the Silicon Valley World Internet Center founded by Susan Duggan, but if so Rene’s description on his profile does not mention it.

Rene was employed at Renessiance Consulting (possibly misspelled) between 2002-2007. According to Rene’s LinkedIn, the company provided “consulting in mobile content licensing and business development”.  A search of opencorporates produced no records.

After co-founding the now defunct MagNet Solutions with Mapes, Rene joined Rok Mobile, a mobile virtual network provider where he eventually became CEO. Rok lost its network agreement with Verizon in 2018 and is defunct.

After Rok, Rene joined several non-profits: Open AR Cloud, VR AR Association, IEEE, and The Spatial Web Foundation which he co-founded with Mapes in October 2019.

Failed Commercial Entities Led by Rene and Mapes

Mapes and Rene co-wrote a book titled The Spatial Web which they tout as a “#1 International Best Seller”. This might sound impressive, but the book was self-published on Amazon where the “Bestseller” label is a notorious scam, easily manipulated by authors who self-publish a book, assign it to obscure categories, reduce its price, and ask friends to buy it.  In the middle of March, The Spatial Web was ranked #573,738 overall, but #5 in Holography, behind Macrame Magic and two notebooks of blank paper.

Co-Founder and President Dan Mapes Appears to Fabricate Berkeley PhD in Artificial Intelligence

Verses co-founder and current President Dan Mapes often refers to his PhD in AI from Berkeley. Mapes lists it on his LinkedIn profile along with an undergraduate degree from University of Cincinnati in Economics and Computer Science:

Mapes also mentions the PhD from Berkeley in interviews. Examples:

  • May 2020 – Mentor InSight [3:40]
  • February 2021 – Steffi Burkhart [0:40]
  • May 2021 – Agess, Inc: [28:50]
  • August 2023 – Denise Holt [8:10]
  • September 2023 – LIVE with Meta Mona [1:50]
  • September 2023 – Transforming Work with Sophie Wade [2:30]

We were unable to confirm that Mapes received a PhD at Berkeley in Artificial Intelligence (nor System Science or any other discipline). We hired an investigator who found the following:

  • UC Berkeley’s PhD Dissertations list between 1970-1995 contained no references to Dan Mapes.
  • Dan Mapes is not found in the Alumni listing for Berkeley’s Artificial Intelligence Research (BAIR) Lab – Alumni 1987 – 2018.
  • Checks were also carried out on Google Scholar and ProQuest and no references were identified.
  • General Boolean search terms were also searched upon and only the information provided in his bio was identified.

In the Agess interview linked above, Mapes says he did his PhD in the 1980s. In various places, Mapes claims to have studied under professors C. West Churchman and Erich Jantsch (example). However, UC Berkeley’s obituary of Churchman does not mention artificial intelligence, and Erich Jantsch died in 1980.

We also found discrepancies in Mapes representation of his undergraduate degree. The University of Cincinnati 1970 commencement program shows Mapes received a Bachelor of Business Administration (with Honors) [Pg. 25], not the Bachelor’s of Science in Economics and Computer Science on his LinkedIn profile.

Note: Rene’s LinkedIn lists a degree in Immersive Reality Design from Cyberlab – Advanced Research and Development Laboratory. Cyberlab was not a school nor a degree issuing institution, but a company run by Mapes which is now defunct.

Intellectual Property: Zero Patents, Only Full Application Apparently Abandoned

For a company claiming to be at the leading edge of next-generation artificial intelligence technology, Verses’ patent portfolio is remarkably thin.

In its initial prospectus filed June 2022, Verses listed zero granted patents and 1 patent application: Warehouse optimization patent application 63/360,286 filed Sept 21, 2021 (USPTO).

While not disclosed in the prospectus, this was a provisional rather than a full application for the technology behind Wayfinder. Provisional patent applications offer a quick, low-cost (likely $65) way to preserve an initial filing date. Applicants must file full non-provisional applications within one year or the provisional application is abandoned. Verses appears to have filed a corresponding non-provisional international Patent Cooperation Treaty (PCT) application exactly one year later, on Sep 21, 2022.

Method and System for Optimizing a Warehouse, was published in March 2023. PCT applications are examined by the International Searching Authority (ISA) for unity, novelty, and inventiveness. In an almost worst-case outcome, the opinion (mailed to Verses in Jan 2023) found the application failed in all three areas.

Of 51 total claims, only 16 were examined for novelty and inventiveness since the rest were determined to be unrelated from a patentability perspective. Of those 16 claims, the ISA concluded 13 lacked novelty, and none contained an inventive step.

Applicants receiving negative opinions from the ISA can respond with amendments within 22 months from the priority date, in this case Sep 21, 2021, the date Verses filed the provisional application. But Verses did not file amendments within the time limit, and while it can submit full applications to individual countries within 30 months of the priority date with the negative ISA opinion attached, it has not done so.

We think Verses has essentially abandoned the patent effort for Wayfinder. Indeed, the last time Verses discussed this application was in the FY2022 MD&A filed July 2022. Method and System for Optimizing a Warehouse is the only full patent application ever filed by Verses.

A search for co-founders Gabriel Rene and Dan Mapes reveals they were inventors in an application titled Spatial Transaction Protocol filed by Cyberlab in September 2019. Similar to the warehouse application, ISA inspectors found the application lacked unity of invention. Thus, of 62 claims only 5 were examined. While examiners determined these 5 claims were novel and inventive, it appears Mapes and Rene also abandoned this application as no amendments to correct the unity deficiency have been filed and national applications have not been submitted before the 30-month deadline.

After the time-limit expired on the Warehouse and Spatial applications, Verses’ patent effort consists of three provisional applications announced in May, August, and November of 2023.

In the context of the long pattern of obfuscation detailed above, it’s worth mentioning that while the press releases in August and November called those patent filings provisional, the May announcement did not thus implied a full application. However, we confirmed with investor relations that this application, which Rene heralded as “a pivotal moment in the evolution of AI”, was indeed provisional.

Since provisional applications are unpublished, it’s impossible to verify that all three have actually been submitted.

In summary, Verses owns zero issued patents and has no active non-provisional applications pending. Compare this to the patent portfolio of AI software developer C3 AI (NYSE: AI), with “19 issued patents in the United States, 12 issued counterpart patents in a number of international jurisdictions, over 45 patent applications pending in the United States, and 79 patent applications pending internationally.”

Brazen Stock Promotion

Verses engages in extremely heavy stock promotion for a company of its size. After a particularly aggressive email and digital marketing campaign run by Winning Media LLC during December 2023, OTC Markets Group required Verses to issue a statement clarifying the campaign was not materially false or misleading. Winning Media is run by Ty Hoffer, a career stock promoter associated with multiple pump and dumps (1, 2).

The statement listed 18 IR and stock promotion firms engaged by Verses in prior 12 months:

  • Winning Media LLC
  • Focus Communications IR
  • Brisco Capital Partners Corp
  • Integrous Communications
  • Blossom Social
  • Real Creative Agency
  • Hybrid Capital Corp
  • Apollo Relations
  • Factory Relations
  • Bryson Gillette Public Relations
  • Triple Bull Consulting Ltd
  • Emerging Markets Consulting, LLC
  • EQ Analytica Inc
  • VHLA Media Inc
  • i2i LLC
  • Omni8 Media Corp
  • CANACOM Group
  • Bospar Public Relations

Through the first 9 months of FY23, Verses spent $10m (+220% y-o-y) on consulting, investor relations, marketing, and travel vs $8m on R&D (+84% y-o-y).

Verses first engaged Winning Media on January 23, 2023. Since then, the company has paid Winning Media $1.3m for 19 separate stock promotion engagements.

In an amateurish and desperate marketing campaign, Verses recently placed a full-page advertisement in the New York Times and a physical billboard in San Francisco urging OpenAI to stop its pursuit of artificial general intelligence and instead collaborate with Verses. We estimate the campaign cost over $200K.

Credible developers of artificial intelligence let the work speak for itself. But Verses hasn’t shown its work, only demonstrating Genius during a recorded video in November 2023 which Rene compared to the “launch of the first rocket” and the Wright Brothers’ first flight. He promised a live demonstration which has not been delivered.

Disclaimer

As of the publication date of this report, Night Market Research (NMR) and Connected Persons (as defined hereunder), along with or through its members, partners, affiliates, employees, clients, and investors, and/or their clients and investors have a short position in the securities covered herein (and options, swaps, and other derivatives related to these securities), and therefore will realize significant gains in the event that the price of any stock covered herein declines. NMR and NMR Connected Persons are likely to continue to transact in the securities covered herein for an indefinite period after an initial report, and such position(s) may be long, short, or neutral at any time hereafter regardless of their initial position(s) and views as stated in NMR’s research.

Use of NMR’s research is at your own risk. In no event shall NMR or any NMR Connected Person be liable for any direct or indirect trading losses caused by any information in this report. You further agree to do your own research and due diligence, consult your own financial, legal, and tax advisors before making any investment decision with respect to transacting in any securities covered herein.

This is not an offer to sell or a solicitation of an offer to buy any security, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction. NMR is not registered as an investment advisor in the United States, nor does NMR have similar registration in any other jurisdiction. To the best of NMR ‘s ability and belief, all information contained herein is accurate and reliable, and has been obtained from public sources NMR believes to be accurate and reliable, and who are not insiders or connected persons of the issuer covered herein or who may otherwise owe any fiduciary duty or duty of confidentiality to the issuer. However, such information is presented “as is,” without warranty of any kind – whether express or implied. NMR makes no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use. All expressions of opinion are subject to change without notice, and NMR does not undertake to update or supplement this report or any of the information contained herein.

NMR Connected Person is defined as:  NMR and its affiliates and related parties, including, but not limited to any principals, officers, directors, employees, members, clients, investors, and agents.  One or more NMR Connected Persons may have provided NMR with publicly available information that NMR has included in this report, following NMR’s independent due diligence.