TORONTO, ONTARIO–(Marketwired – May 28, 2014) – VersaPay Corporation (TSX VENTURE:VPY) (“VersaPay” or the “Company”), a leading provider of cloud-based payment solutions, is pleased to report financial results for the first quarter of 2014. Revenue for Q1 2014 grew to $4.3 million from $4.1 million in the previous year. Revenue growth occurred across both of the company’s operating units, the POS Merchant Services business and the VersaPay Solutions business.
Q1 2014 Highlights:
- Completed a $5 million bought-deal financing in order to further develop and market its Arc™ electronic invoice presentment and payment software and its ArcPay™ electronic payments service
- WinPak Ltd.’s Winnipeg manufacturing division became a VersaPay Solutions customer, selecting the Arc™ platform to automate its accounts receivable processes
- Grew total credit card processing volume to $220 million for Q1 2014 versus $208 million in Q1 2013
- Launched an Arc™ direct marketing campaign in Canada and the United States that is generating higher than expected levels of interest from VersaPay’s target market.
Subsequent to Q1 2014 Highlights:
- Heartland Payment Systems, the fifth largest payment processor in the United States completes integration with Arc™ and rolls out reseller program to its world class sales distribution network.
Q1 2014 Financial Summary(1)
|Three months ended, March 31|
|Cash Operating Expenses(2)||$||1.3M||$||1.0M|
|March 31, 2014|
|1||The unaudited condensed interim consolidated financial statements for the three months ended March 31, 2014 and the related Management’s Discussion and Analysis for the period will be available on the Company’s website at www.versapay.com and on SEDAR at www.sedar.com.|
|2||Cash operating expense is defined as operating expense excluding depreciation, amortization and share-based payments.|
|3||Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, share-based payments, and other income. See table A below.|
“Q1 saw the realization of several key milestones for the company,” commented Craig O’Neill, VersaPay’s CEO. “In launching our go-to-market plan for Arc™, securing financing to fund our growth plans, significantly strengthening our R&D team, and implementing our first major Arc™ partnership with Heartland, we have made solid progress towards our objectives for the year. In addition, we are very pleased with the expanding sales pipeline we are witnessing in both businesses, Solutions and POS. We expect this trend to continue as we increase our sales and marketing investment and as our strategic partners, Heartland Payment Systems in the U.S. and TD Merchant Services in Canada, gain market traction.”
Q1 2014 Financial Review
Total revenues for Q1 2014 increased 5% to $4.3 million from $4.1 million in Q1 2013. The year-over-year improvement was driven primarily by growth in the Company’s transaction processing fees.
Cash operating expense (excluding amortization and share-based payments) increased 22% to $1.3 million from $1.1 million in Q1 2014 from the same period in 2013.
Adjusted EBITDA for Q1 2014 was $(0.5) million, compared to $(0.3) million in Q1 2013. Loss from continuing operations for Q1 2014 was $(0.8) million. This compares to a loss from continuing operations of $(0.3) million for Q1 2013.
|Three months ended, March 31|
|Share based payments||(260,016||)||(61,172||)|
|1||Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, share-based payments, and other income.|
VersaPay is a financial technology company that delivers payment solutions for businesses. Serving more than 2,500 customers, VersaPay, together with its partners, provides the hardware, technology, infrastructure and support services to enable businesses of all types to accept and process electronic payments. In addition, the Company’s cloud-based invoice presentment and payment platform facilitates the efficient exchange of documents and payments between suppliers and customers. VersaPay is headquartered in Toronto, Canada and has operations in Montreal and New York.
More information about VersaPay can be found at www.versapay.com.
Forward-Looking and Other Cautionary Statements
This news release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company’s current expectations. When used in this news release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology, are intended to identify forward-looking statements and information. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks relating to the speculative nature of the Company’s business, the Company’s formative stage of development and the Company’s financial position.
Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward looking statements if these beliefs, estimates and opinions or other circumstances should change.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
|Cash and cash equivalents||5,368,355||1,276,410|
|Funds held for merchants||4,644,076||4,063,599|
|Accounts payable and accrued liabilities||483,719||289,465|
|Funds due to merchants||4,644,076||4,063,599|
|Current portion of obligations under finance lease||19,889||24,367|
|Obligations under finance lease, net of current portion||–||2,953|
|Total Liabilities and Equity||10,779,917||5,983,613|
|Three months ended,
|POS Merchant Services||4,236,944||4,066,924|
|Cost of Sales|
|POS Merchant Services||3,499,007||3,292,057|
|Depreciation and amortization||16,643||36,615|
|General and office expenses||198,761||145,257|
|Marketing and promotion||96,262||45,137|
|Professional and consulting fees||221,332||211,472|
|Rent and occupancy||74,601||75,112|
|Research and development||137,543||103,257|
|Salaries and benefits||541,566||459,944|
|Share based payments||260,016||61,172|
|Net Loss and Comprehensive Loss for the Period||(824,050||)||(326,473||)|
|Loss per share, basic||$||(0.04||)||$||(0.02||)|
|Weighted average number of common shares outstanding, basic||18,943,216||15,367,770|
|As at December 31, 2012||9,981,720||1,497,517||372,260||(10,778,860||)||1,072,637|
|Net loss for the period||–||–||–||(326,473||)||(326,473||)|
|Exercise of options||15,063||(4,130||)||–||–||10,933|
|Share based payments||–||61,172||–||–||61,172|
|At March 31, 2013||9,996,783||1,554,559||372,260||(11,105,333||)||818,269|
|At December 31, 2013||10,812,937||1,928,724||52,149||(11,889,508||)||904,302|
|Net loss for the period||–||–||–||(824,050||)||(824,050||)|
|Exercise of options||–||–||–||–||–|
|Exercise of warrants||150,226||42,617||(42,617||)||–||150,226|
|Share based payments||173,800||86,216||–||–||260,016|
|At March 31, 2014||15,504,300||2,057,557||64,985||(12,713,558||)||4,913,284|
|Three months ended
|Cash Provided By (Used In) Operating Activities|
|Net loss for the period||(824,050||)||(326,473||)|
|Items not affecting cash:|
|Depreciation of equipment||15,965||21,977|
|Amortization of intangible assets||678||14,638|
|Interest accreted on promissory note||20,022||15,618|
|Share based payments||260,016||61,172|
|Change in non-cash working capital items|
|Accounts payable and accrued liabilities||194,254||29,012|
|Cash Provided By (Used in) in Investing Activities|
|Acquisition of equipment||(34,783||)||(660||)|
|Cash Provided by (Used In) Financing Activities|
|Issuance of common shares, net of issuance costs||4,573,016||10,933|
|Finance lease payments||(7,431||)||(11,718||)|
|Increase (decrease) in cash and cash equivalents||4,091,945||(246,523||)|
|Cash and cash equivalents, beginning of period||1,276,410||1,461,388|
|Cash and cash equivalents, end of period||5,368,355||1,214,865|
Cash and cash equivalents consist of the following:
|Cash at bank and in hand||4,882,478||357,154|
David C. W. Chan
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