Why did VS's Q3 earnings fall short of forecasts?

Versus Systems Inc. (NASDAQ:VS) experienced a shortfall in its Q3 earnings relative to forecasts due to several key factors: 1. **Revenue Decline**: The company's revenue fell significantly, from $158,000 in the previous year to just $26,530 in the first quarter of 2024. This reduction in revenue contributed to the earnings shortfall. 2. **Customer Base Reduction**: The number of customers served by Versus Systems dropped from 16 to 5. This decrease in customer base likely led to a decrease in revenue, as each customer may contribute differently to the overall earnings. 3. **Financial Restructuring**: The company underwent a major business restructuring, which included significant changes in the management team. While the restructuring was seen as a potential positive development, it also indicated the financial challenges faced by the company. The overhaul led to the immediate resignation of CEO Matthew Pierce, CFO Craig Finster, and three board members, including Chairman Keyvan Peymani. The company's new interim CEO, Curtis Wolfe, brings a fresh perspective but also represents a change that could have temporarily impacted financial performance. 4. **Cash Position and Operating Expenses**: Despite a substantial cut in operating expenses, Versus Systems faced a dwindling cash position. This financial constraint could have limited the company's ability to invest in growth opportunities or maintain its operations at optimal efficiency, thereby affecting earnings. In summary, Versus Systems' Q3 earnings fell short of forecasts due to a combination of revenue decline, reduction in customer base, financial restructuring, and cash position challenges. These factors collectively contributed to the company's financial performance not meeting expectations.