vpy investor presentation august 2019 v1 - versapay · 2019-08-08 · vice president and group...

PRIVATE & CONFIDENTIAL | © 2019 VersaPay Corporation

Investor PresentationAugust 2019

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Forward Looking Statements

This presentation contains “forward-looking information” which may include, but is not limited to, statements with respect to the activities, events or developments that the Company expects oranticipates will or may occur in the future. Such forward-looking information is often, but not always, identified by the use of words and phrases such as “plans,” “expects,” “is expected,” “budget,”“scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may,”“could,” “would,” “might” or “will” be taken, occur or be achieved.

These forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business. Management believesthat these assumptions are reasonable. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievementsof the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include, among others, risks relatedto the speculative nature of the Company’s business, the Company’s formative stage of development and the Company’s financial position.

Forward-looking statements contained herein are made as of the date of this presentation and the Company disclaims any obligation to update any forward-looking statements, whether as a result of newinformation, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking information will prove to be accurate, as actual results andfuture events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

Non-GAAP Financial Measures

This presentation contains references to certain financial measures, including Adjusted Earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Monthly Recurring Revenue(“MRR”), and Annual Recurring Revenue (“ARR”) that do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other entities. These non-IFRS measures should be viewed as a supplement to, and not a substitute for the Company's results of operations reported under IFRS.

The term Adjusted EBITDA (“Adjusted EBITDA”) is a non-IFRS measure and refers to earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted EBITDA provides usefulinformation to users as it reflects the net earnings prior to the effect of non-operating expenses (which includes M&A and non-recurring restructuring activities), share- based compensation (whichincludes share based payments, restricted share units, performance share units, and deferred share units), and unusual items such as discontinued operations. Management uses Adjusted EBITDA inmeasuring the financial performance of the Company as this measure reflects results that are controllable by management in day-to-day operations. Management monitors Adjusted EBITDA againstbudget and past results on a regular basis. Accordingly, Adjusted EBITDA is therefore unlikely to be comparable to similar measures presented by other issuers .

The term Monthly Recurring Revenue (“MRR”) is a non-IFRS measure and includes revenues earned in a given month relating to monthly fixed subscription fee, monthly transaction fees, ARC Lite™revenue, and PayPort™ revenue. MRR is a common metric used in Software as a Service (“SaaS”) companies and its definition is not guided by IFRS standards. Accordingly, MRR is unlikely to becomparable to similar measures presented by other issuers.

The term Annualized Recurring Revenue (“ARR”) is a non-IFRS measure and refers to multiplying the MRR value defined above by 12 to represent management’s best estimate of forward looking 12months of recurring revenues that the Company would earn based on the current Monthly Recurring Revenue.

Disclaimer

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VersaPay Timeline

OUR MISSION IS TO DRIVE A SEA CHANGEIN THE WAY COMPANIES MANAGE THEIR ACCOUNTS RECEIVABLE

2006

IPO on Toronto Stock Exchange January 2010

2013/14Two lines of business: Payments & Solutions

MERCHANT SERVICES

2017

Merchant Services business sold to BluePay to focus on ARC

White label partnership pilot launched

Significantbacking by global institutional investor

Named TSXV Tech Company of the Year

2018

Payment Facilitator relationship launched

Ranked Top 20 Most Innovative Public Companies

2019Named a leader in IDC MarketScape

Cash Application and Bank Rec Module launched

ARC Beta successfully completed

2015

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Current State of AR

SUPPLIER CUSTOMER

Supplier creates an invoice and send by mail or email

Customer requests new invoice

HIGH COST I HIGH DSO I NO VISIBILITY

• Customer may lose their invoice

• There may be disagreement on invoice amount or terms

• Customers may not have time to call or receive calls

• Time passes

THE MESSY MIDDLE

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ARC: AR Reinvented

CollaborationCommunicate with customersTrack and manage customer commitments and follow-ups

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3 CollectionsAutomate routine collections activities and enable team-based problem solving on overdue accounts

4 PaymentsOffer customers breadth of electronic payment optionsEnable scheduled payments and payment plans

5 Cash Application / Bank ReconciliationAll payments (on ARC and external) are automatically matched and reconciled with invoices and the bank

6 Insight and VisibilityComplete, accurate, real-time views of customer behaviourFull visibility across the organization and across currencies

PresentmentPublish invoices & supporting documentation online and deliver electronically

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5


A Compelling Business Case

Customer satisfaction Days to get paid

Actionable insights Collections Labor and other costs

Cash application

“The ROI for this project is a no-brainer”6


Powerful Insights Yet Easy to Use

…from any web-enabled device!7


Market size >$5B USD

Tens of thousands U.S. firms with $50M to $1B in revenue.

Selected Vertical Industries:• Wholesale / Distributors• Commercial Realty / Property Managers• Media• Trucking / Logistics• Manufacturing• Professional Services

The Opportunity

$500M – 1B+

$50M – 100M+

$100M – 500M+

TAM by Company Size

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A Recognized LeaderIDC MarketScape Worldwide SaaS and Cloud-Enabled

Accounts Receivable Applications, 2019One of 3 global Leaders in the A/R Automation space as chosen by an independent research firm

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ARC: Positioned to Grow Rapidly

• Our track record in the market has proven our story is compelling

• Addressable market is estimated to be at least 5B, with little competition

• The solution, pricing and implementation approach take away reasons to say no

• We have access to thousands of businesses through our community of channel partners

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Go-To-Market Strategy

Enterprise accounts

Extensive client base of Enterprise, mid-market and small businesses

Extensive client base of Enterprise and mid-market businesses

ARC as distribution channel for financial services to customers of our customers

DIRECT

FIs

ERP

ARC

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Direct and Channel Sales

Direct + Channel =ARR Growth

2017 2018 2019 2020 2021 2022

Payport Direct Channel ARC

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Highest Adoption in the Industry

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Recent Highlights

• $0.9M ARC ARR and $0.4M professional services won in Q2 2019

• Mastercard partnership announced

• ARC Cash Application module launched

• VersaPay Named Leading Vendor in IDC MarketScape

• Bought deal for $9.2M in growth capital completed

• Customer e-adoption tops 80%, online payments exceed 40%

• ARC Mobile app launched

• Two major accounting firms select ARC

• Versapay becomes a Payment Facilitator in partnership with First Data

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Great Companies Are Using ARC

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Customer Testimonials

“VersaPay ARC quickly became the clear cut answer to help us reshape our invoice-to-

cash operations including a simplified payment and cash application process as well as automated dispute resolution. As our business continues to grow, having a trusted partner in VersaPay that offers the

flexibility and scalability with its ARC solution is critical to ensuring a seamless

and modern payment process for our customers.”

Reid McCarthy, CFOJ.J. HAINES

“This was an important initiative for our company as we required a highly scalable

solution that offered the payment portal but also had extensive functionality well beyond

that to support the complexities of our business. We evaluated three other

solutions in the market, however, it became clear that VersaPay had already established

a fully functional, PCI compliant and industry leading solution.“

Scott Chase, Director of CreditAMER SPORTS

“We were looking for a platform that would enhance communications with our

customers as well as provide more payment options for our tenants. Given the scale of our company, we also wanted to simplify how we receive and reconcile payments

from our tenants, and found VersaPay’s ARC solution was a good fit for our needs.”

Dennis Hanifan, VP of Application SystemsBRIXMOR PROPERTY GROUP

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Financial OverviewAs of Q2 2019

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Consistent ARR Growth

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Top Line Momentum - ARC

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Quarterly Revenues

Reve

nue

(000

s)*

* Excludes POS Merchant Services business sold in January 2017

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Financial Summary

($000’s) Q2 ‘19 Q2 ‘18 YTD 2019 June YTD 2018

Revenue $2,176 $1,156 $4,127 $2,184

Gross Profit 1,765 869 3,301 1,601

Gross Margin 81% 75% 80% 73%

Consolidated Adjusted EBITDA (2,622) (2,805) (4,641) (5,071)

Total comprehensive (loss) earning (3,453) (3,605) (6,343) (6,262)

EPS ($0.08) ($0.09) ($0.14) ($0.17)

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Corporate Information

Ticker (TSX Venture) VPY

Market Capitalization $77M

Stock Price* $1.76

Shares Outstanding (Basic) 43,940,851

Fully Diluted Shares Outstanding 43,940,851

Year End December 31st

Cash and cash equivalent $6.55M

Head Office Toronto

* As of August 7th, 2019

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Investment Highlights

DISRUPTIVE PLATFORM WITH FIRST MOVER

ADVANTAGE

UNTAPPED LARGE ADDRESSABLE

MARKET

STRONG CUSTOMER REFERENCES

WELL CAPITALIZED TO PURSUE GROWTH

OPPORTUNITIES

MAJOR CHANNEL PARTNERS

Leading solution with a proven track

record

Market opportunity of over $5B

Signs of wide spread “sea change”

emerging

Growing customer adoption

In-depth industry knowledge in

various verticals

Access to thousands of

businesses through our partner network

No corporate debt

Clean balance sheet

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Board of DirectorsArt Mesher – Chairman of the Board of Directors: Art Mesher is considered one of the founders of SaaS networks and cloud computing. Mesher helped start VocamSystems, which went public before being acquired by Pitney Bowes in 1990. Subsequently, Mesher was President of Advanced Logistics Research and also launched the Integrated Logistics Strategies Services practice at Gartner Group Inc. He is currently the Chancellor of CleanSL8.DNA and the Chairman of the Board of The Core Group. He also sits on the Board of Directors for QHR Corporation, Nulogy, and Difference Capital Financial Inc.

Craig O’Neill – Chief Executive Officer and Director: Craig O'Neill was appointed to the position of Chief Executive Officer at VersaPay Corporation in September 2013. He has also been a Director on the company’s board since 2013. He has more than 20 years of experience delivering enterprise software. Prior to joining VersaPay, Craig was the co-founder and CEO of Xeye, where he directed the company’s growth of more than 40% per year and sale to Odyssey Financial Technologies, and ultimately to the Temenos Group, where he became SVP Strategy and Development.

Brandon Nussey – Director: Brandon has almost 20 years of experience as a technology executive. He was appointed CFO of The Descartes Systems Group in 2003. After serving as an Executive in Residence at Communitech, Brandon joined as CFO and member of the Board of Directors for D2L Inc (formerly Desire2Learn), a SaaS based education technology provider. Currently Brandon is CFO at Lightspeed POS Inc.. Brandon is also Treasurer and Board member for the Loran Scholars Foundation, named one of the Financial Post’s Top Charities in Canada.

David Dobson – Director: Mr. Dobson joined Digital River in February 2013 as the company’s Chief Executive Officer. Prior to his current role, Mr. Dobson served as executive vice president and group executive at CA Technologies Inc., as president of Pitney Bowes Management Services (PBMS) and as chief executive officer of Corel Corporation. Before joining Corel in 2005, David spent 19 years at IBM, where he held a number of senior management positions. He was a member of IBM’s Senior Leadership Team and is a member of the board of directors of John Wiley & Sons.

Mark Kohler – Director: Mr. Kohler is currently Chairman and Chief Executive Officer of Exelerate Capital. Over his 30 year career, Mr.Kohler has held C-level positions at many leading North American organizations including; Jameson Bank, the Hostopia Division of Deluxe Corporation, AirIQ Inc., Spectra Securities Software Inc., and Personus Inc.. He currently serves as a corporate director at BeWhere Holdings Inc..

Sheldon Pollack – Director: Mr. Pollack is an entrepreneur and investor. He co-founded OnX Enterprise Solutions in 1983, took the company public in April 2000 and subsequently re-privatized in April 2009. Today, OnX has revenues nearing $1 billion and offices throughout Canada, the United States and the United Kingdom. Mr. Pollack currently serves as Vice-Chairman of OnX. In addition, Mr. Pollack serves as chairman of the board of Acuity Ads Holdings Inc. Mr. Pollack founded www.abilitygives.org, a charity focused on providing specialized equipment to children with special needs.

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Key Contact Details

Craig O’Neill – Chief Executive Officer and DirectorT: 647-258-9378E: [email protected]

Shouvik Roy – Chief Financial Officer T: 647-402-9772 E: [email protected]

Art Mesher – Chairman of the Board of Directors T: 519-404-3967 E: [email protected]

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mailto:[email protected]



vpy investor presentation august 2019 v1 - versapay · 2019-08-08 · vice president and group...

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