VerSe Innovation Denounces Baseless Allegations in Commercial Dealings with Builder.ai

Company strongly rejects claims of revenue manipulation; asserts that work products for both expense & revenue that were included in the audited financial statements were duly received, delivered respectively and verified

Bengaluru, 1st June 2025: VerSe Innovation Pvt. Ltd. categorically denies all allegations—whether express or implied—made against the company in connection with its commercial dealings with Builder.ai. These allegations are not only factually incorrect and baseless, but also defamatory and misleading. In response to any such claims being published or disseminated, VerSe Innovation expressly reserves the right to pursue all appropriate legal remedies, with all consequences borne solely by those responsible.

VerSe Innovation affirms that revenue recorded in its financial statements, including the revenue from Builder.ai, relates to legitimate services rendered and delivered—either directly or through its subsidiaries. Similarly, expenses recorded by VerSe Innovation correspond only to services actually received, including from Builder.ai or its affiliated entities. This has been verified periodically by reputable independent third parties. VerSe Innovation further affirms that all payments from Builder.ai against the revenue recorded in the financial statements have been received. Similarly, the expenses that were recorded in VerSe Innovations’ financial statements for hyperscale cloud deployment and system migration, customized app development and software solutions services have been paid to Builder.ai or its relevant subsidiary.

Any insinuation that VerSe Innovation colluded with Builder.ai to inflate revenues, engaged in reciprocal billing without corresponding services, or manipulated invoicing practices to conceal any arrangement or payments were intentionally interspersed in timing and amount of the invoices to avoid suspicion is entirely false, defamatory, and irresponsible. VerSe Innovation rejects any such mischaracterizations and reiterates its commitment to transparency and legal compliance.

Over the past five years, VerSe Innovation engaged Builder.ai for services including hyperscale cloud deployment and system migration, customized app development and software solutions—at a cumulative spend of USD 80 million. During the same period, Builder.ai engaged VerSe Innovation for advertising services for its products and services, resulting in a total payment of USD 53 million to VerSe Innovation. This balance of trade further disproves any allegation that the payments were of similar amounts and part of any coordinated arrangement or round tripping.

As part of the statutory audit for FY24, the board and the management ensured that a comprehensive and detailed examination of several transactions—including those involving Builder.ai—was conducted. Each such transaction was validated and checked thoroughly, including review of services rendered and delivered, relevant supporting and payments against the same. Specifically, as part of the audit for that year, the auditors of the company performed and highlighted the extensive audit procedures undertaken by them in respect of each Builder.ai revenue and expense transaction included in the financial statements. This included the expenses for hyperscale cloud deployment and system migration, customized app development and software solutions services which were recorded in VerSe Innovation’s financial statements.

The statutory audit for FY24 concluded with an unmodified opinion from the auditors, confirming a true and fair view of VerSe’s financial statements. An unmodified opinion is only issued when the auditor is of the view that no modification (e.g. qualification) is required to its opinion on the financial statement which, in this case, stated the following:

“In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act (“Ind AS”) and other accounting principles generally accepted in India”

The opinion on the consolidated financial statements is similar.

While certain internal control weaknesses were noted in the report on internal controls on financial reporting (which is required only for the standalone financial statements), these did not impact the unmodified true and fair opinion of the auditors on the financial statements which is clear from the unmodified opinion and the following observation in the said ICFR report:

“We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the Standalone financial statements of the Company for the year ended March 31, 2024, and the material weaknesses mentioned in the Basis for Adverse Opinion paragraph above do not affect our opinion on the said Standalone financial statements of the Company”

With this matter clearly behind us, VerSe is now focused on the future - The company remains focused on its near-term goal of achieving breakeven in the second half of the fiscal year and strengthening its internal controls at the same time. This effort is being powered by its next-generation, AI-first product portfolio—including NexVerse.ai, Dailyhunt Premium, Josh Audio Calling & Stories, and VerSe Collab—which are collectively reshaping how consumers, creators, and brands engage within India’s fastevolving digital economy.