Investor Presentation June 2018
Forward Looking Statements 2 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 or anticipates 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 believes that these assumptions are reasonable. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of 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 related 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 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 new information, 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 and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Make customers happy. Get paid faster.
VersaPay 3 Named White label TSXV Tech partnership IPO on Toronto Strategic partnerships: Company of launched Stock Exchange Banks & CC Companies IDC company the Year January profile January 2018 2010 2016 2006 2017 2013/14 2009 Merchant Services Two lines of Ranked #1 2015 Significant business sold to in Profit business: Ranked Top 20 backing by BluePay to focus on Payments & Solutions Top 50 in Most Innovative global ARC Public Companies institutional investor MERCHANT SERVICES OUR MISSION IS TO DRIVE A SEA CHANGE IN THE WAY COMPANIES MANAGE THEIR ACCOUNTS RECEIVABLE Make customers happy. Get paid faster.
Current State of AR 4 CUSTOMER SUPPLIER THE MESSY MIDDLE Customers may lose their § invoices There may be disagreements § on invoice amounts or terms Customers may not call you § when there is a problem Time passes § Customer Supplier Email creates invoice or Mail requests new invoice HASN’T CHANGED IN DECADES Make customers happy. Get paid faster.
ARC: AR Reinvented 5 1 Presentment Publish invoices & supporting documentation online and deliver electronically 2 Collaboration Communicate with customers Track and manage customer commitments and follow-ups 3 Collections Invoice related activity and payments recorded in one place, enabling visibility and automated follow-up 4 Payments Offer customers breadth of electronic payment options PCI compliant manner 5 Cash Application Payments made through ARC are automatically matched and reconciled with 100% accuracy 6 Automation, Insights, and Visibility Snapshot of your enterprise’s analytics & customer behaviors Make customers happy. Get paid faster.
A Compelling Business Case 6 Customer Cash application Days to get paid satisfaction Labor and Actionable insights Collections other costs “The ROI for this project is a no-brainer” Make customers happy. Get paid faster.
The Opportunity (Selected Verticals)* 7 165,000 MARKET SIZE >$5B USD U.S. firms with $50M to $1B in revenue 88% 1,120 1,582 Percent of U.S. firms rely on paper invoices * Selected Vertical Industries: 3,845 50M-100M • Media • Trucking / Logistics 100M-500M • Commercial Realty / Property Managers 500M-1B • Wholesale / Distributors • Manufacturing • Professional Services Make customers happy. Get paid faster.
ARC: Positioned to Grow Rapidly 8 • A compelling value • Experience in the market has proposition proven our story is compelling • A large untapped market • Addressable market is with limited competition estimated to be at least 5B • Little competition • Our approach overcomes • The solution, pricing and historical obstacles implementation approach take away reasons to say no • Partners provide • Thousands of existing tremendous market reach customers ranging from small business to large corporations Make customers happy. Get paid faster.
ARC Adoption (as at May 31 st ) 9 141 $625M In paid invoices Clients signed 70 % 3.4M Invoices delivered Customer adoption 114,626 Worth $5.3B eAdopted Customers Make customers happy. Get paid faster.
Recent Highlights 10 • TSXV Canadian Tech Stock of the Year and Executive of the Year (Craig O’Neill) Awards at Cantech Investment Conference 2018 • Big 4 accounting firm becomes a client • US expansion plan well under way by year-end ‘17 • Investment from Fidelity to enable US expansion • Largest deal signed to date with Livingston July ’17 • White label partnership with RBC announced Jul’17 Make customers happy. Get paid faster.
Go-To-Market Strategy 11 Enterprise accounts DIRECT Extensive client base of Enterprise, mid-market BANKS and small businesses Extensive client base of Enterprise and mid- ERP market businesses ARC as distribution channel for financial services to ARC customers of our customers Make customers happy. Get paid faster.
US Expansion Plan 12 • Build US Direct Enterprise sales force and expand US-focused marketing • Add 1-2 US banks • Add many ERP vendors / ERP resellers • Deepen channel support for all partners • Dedicated channel reps • Joint marketing programs • ARC as an on-line distribution platform • On-platform viral marketing tools • Integrated financial services Make customers happy. Get paid faster.
Direct + Channel Sales = MRR Growth 13 Make customers happy. Get paid faster.
Great Companies are using ARC 14 › Make customers happy. Get paid faster.
Financial Overview As of Q1 2018 Financial Statements Make customers happy. Get paid faster.
Quarterly Revenues* 16 $1,200 $1,000 Revenue (in thousands) $800 $600 $400 $200 $0 Q1 '15 Q2 '15 Q3 '15 Q4' 15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2' 17 Q3' 17 Q4' 17 Q1' 18 * Excludes POS Merchant Services business sold in January 2017 Make customers happy. Get paid faster.
Financial Summary 17 ($000 � s) Q1 � 18 Q1 � 17 Q4 � 17 Q4 � 16 $1,012 $486 $1,060 $469 Revenue from continuing op 675 274 672 213 Gross Profit from continuing op 67% 56% 63% 55% Gross Margin from continuing op Nil 8,965 Nil 147 Net earnings from discontinued op (2,514) (1,802) (1,837) (1,594) Consolidated Adjusted EBITDA* (2,680) (7,013) (2,521) (1,815) Total comprehensive (loss) earning ($0.07) ($0.06) ($0.08) ($0.06) EPS *Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) is a non-IFRS financial measure which does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted EBITDA provides useful information to users as it reflects the net earnings prior to the effect of non-operating expenses and one time events such as interest, tax, depreciation and amortization, share based payments, finance income and expense, other income and expenses and exchange difference arising on translating foreign operations. Management uses Adjusted EBITDA in measuring 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 against budget and past results on a regular basis. Make customers happy. Get paid faster.
Corporate Information 18 Ticker (TSXV:VPY) VPY Market Capitalization $79M Stock Price (03/31/17) $2.08 Shares Outstanding (Basic) 37,922,475 Fully Diluted Shares Outstanding 41,565,551 Year End December 31st Cash and cash equivalent (03/31/18) $13.4M Head Office Toronto Make customers happy. Get paid faster.
Investment Highlights 19 þ Market opportunity of over $5B þ First mover advantage þ Leading solution with a proven track record þ Strong customer references and growth in usage þ Signs of widespread “sea change” emerging þ Major channel partners expand market reach tenfold þ Well capitalized to pursue the growth opportunity Make customers happy. Get paid faster.
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