XR Immersive Tech clarifies SVR licensing structure after deal termination and CSE review

XR Immersive Tech Inc. (CSE: VRAI) saw its share price fall 9.09% to CAD 0.30 on June 28, 2025, amid investor reaction to the termination of its proposed CGM technology acquisition and clarifying disclosures related to its SVR licensing agreement. The Canadian virtual reality technology company, known for its immersive entertainment systems and enterprise XR platforms, issued a detailed press release on June 26, 2025, addressing the regulatory scrutiny triggered by its earlier disclosures.

The clarifications follow a review by the British Columbia Securities Commission and mark a critical juncture in XR Immersive Tech Inc.’s transition away from direct SVR operations. The firm, whose core assets include the UNCONTAINED hardware platform and Synthesis VR network, is seeking to realign investor expectations around its current revenue model and strategic roadmap.

Why did XR Immersive Tech terminate the InsulinQ acquisition and what does it mean for its diversification goals?

The proposed acquisition of InsulinQ’s Continuous Glucose Monitoring (CGM) technology—initially disclosed in January 2025—was formally terminated due to delays in satisfying the deal’s closing conditions. XR Immersive Tech Inc. confirmed that no shares, cash, or fees had been issued or paid, and stated it has no ongoing obligations related to the transaction.

This development effectively halts the Canadian immersive entertainment company’s short-lived attempt to diversify into health technology. While speculative investor interest initially surged around the deal’s announcement, analysts now view the termination as a necessary retrenchment. Institutional observers noted that the pivot was unusually aggressive for a company still dependent on immersive media revenue, and expressed relief that no capital was diverted from core operations.

What changes did XR Immersive Tech make to clarify the licensing agreement with Deploy Reality?

The central clarification involved the structure and economic implications of XR Immersive Tech’s July 2024 licensing agreement with Deploy Reality, a firm co-owned by two of XRi’s former executives. Originally presented as a standard licensing deal, the agreement in substance resembled a deconsolidation of the SVR business unit.

The agreement granted Deploy Reality full operational control of SVR, including client servicing, billing rights, brand usage, and platform management. While legal ownership remains with XR Immersive Tech, the firm acknowledged that the arrangement effectively removed SVR from its consolidated operations. This admission was spurred by the BCSC’s review and marks a significant shift in how the company reports its revenue streams.

Importantly, no upfront cash was received from Deploy Reality. Instead, the disclosed CAD 805,571 “initial payment” was primarily the extinguishment of historical liabilities owed to Deploy Reality and its principals. These included unpaid compensation, interest, and a CAD 368,571 share transfer involving 2,047,620 XRi shares at CAD 0.18 each.

How significant was the SVR division to XR Immersive Tech’s revenue base prior to deconsolidation?

Prior to the licensing arrangement, the SVR division accounted for roughly 92.4% of XR Immersive Tech Inc.’s total revenue for the nine months ending September 30, 2023. This made SVR the primary income-generating engine of the Canadian technology company. As such, its deconsolidation materially alters the firm’s financial profile.

Deploy Reality now invests CAD 102,147 per month into SVR’s operations, covering salaries, development expenses, game licensing, and marketing. While these funds ensure continuity for SVR customers and employees, they do not represent revenue or consideration for XR Immersive Tech itself.

The Canadian immersive software developer retains legal ownership of SVR but no longer consolidates the unit’s performance in its financials. This separation means that XR Immersive Tech’s go-forward earnings reports will reflect only its other business units, notably its UNCONTAINED hardware platform and software integrations for major enterprise clients.

Why did the BCSC flag the agreement and what were the compliance concerns under MI 61-101?

The British Columbia Securities Commission raised concerns under Multilateral Instrument 61-101 (MI 61-101), which governs related party transactions. Deploy Reality is 50% owned by Shabeer Sinnalebbe and Kamen Plamenov Petrov, both former insiders of XR Immersive Tech. Because the fair market value of the licensing agreement exceeded 25% of XRi’s market capitalization, a formal valuation and minority shareholder approval should have been obtained.

The company admitted that these compliance steps were not followed, likely due to its original classification of the transaction as a non-sale licensing deal. With the recent clarification, this oversight has now been flagged publicly. Although no enforcement actions were announced as of June 26, analysts suggest the episode may affect investor trust and corporate governance ratings.

How is XR Immersive Tech adjusting its accounting treatment for the SVR agreement going forward?

One of the most consequential updates relates to the accounting treatment of the Deploy Reality agreement. Initially, XR Immersive Tech recorded Q3 2024 revenue as license amortization. However, during the ongoing audit of its full-year 2024 financials, auditors determined that this recognition does not comply with IFRS 15.

As a result, the company announced that its Q3 2024 MD&A and financials contain material errors and should not be relied upon. Instead, the firm expects to restate its earnings by recording a one-time gain on the extinguishment of debt—corresponding to the liabilities removed by the Deploy Reality deal—rather than recurring licensing revenue.

This restatement may have implications for valuation models and investor projections, particularly among small-cap tech investors who rely on top-line growth signals. It also reinforces the structural shift underway at XRi from revenue-recognized client operations to capital-light platform ownership.

What are analysts and investors expecting from XR Immersive Tech’s future growth strategy?

Institutional sentiment remains cautious. While some investors continue to back XR Immersive Tech Inc. for its strategic focus on location-based metaverse infrastructure and deep enterprise relationships, others see the SVR deconsolidation as a sharp contraction in commercial activity.

XRi still highlights collaborations with blue-chip clients like Intel, Capital One, Scotiabank, Bayer, and the FDA, delivered via its Uncontained/OS platform. However, with SVR revenue removed and no new monetized assets replacing it yet, the market is pressing for visibility into the company’s product pipeline and near-term revenue drivers.

Future catalysts may include licensing milestones achieved by Deploy Reality that trigger incremental payments or the scaling of its Synthesis VR network across international locations. The firm’s strength in immersive experience design and its modular hardware stack also position it well for entertainment venues and simulation training segments.

What is the outlook for XR Immersive Tech Inc. as it navigates post-deal restructuring and market repositioning?

Analysts believe the next two quarters will be pivotal. The company must demonstrate that its immersive infrastructure strategy—focused on hardware, SDK platforms, and VR operator tools—can scale independently of the SVR business. There is optimism around potential new licensing revenue from Uncontained/OS and around XRi’s AI-powered virtual agents and haptic system innovations, particularly in simulation training and industrial safety.

However, the firm’s current CAD 0.30 stock price reflects diminished investor confidence after the CGM acquisition fell through and financial statements required revision. XR Immersive Tech Inc. will likely need to deliver clear commercial wins or strategic partnerships to regain market momentum in the second half of 2025.