Welcome!

News Feed Item

VersaPay Reports Q2 2014 Results, Achieves Record Transaction Volumes

TORONTO, ONTARIO -- (Marketwired) -- 08/29/14 -- VersaPay Corporation (TSX VENTURE:VPY) ("VersaPay" or the "Company"), a leading provider of cloud-based invoicing, accounts receivable management and payment solutions, is pleased to report financial results for the second quarter of 2014. Revenue for Q2 2014 grew to $4.8 million from $4.4 million in the previous year. Revenue growth occurred across both of the Company's operating units, the VersaPay Solutions business and the POS Merchant Services business, as synergies accrued.

Q2 2014 Highlights:

--  Heartland Payment Systems, the fifth largest payment processor in the
    United States completes integration with Arc(TM) and rolls out reseller
    program to its world class sales distribution network 
--  The Company's strategic investment in the Solutions business advanced
    significantly, with the build-out of the product and support teams, the
    launch of new Solutions product branding, the opening of a new leading
    edge development center in Toronto and the expansion of the Company's
    cloud infrastructure 
--  Grew total credit card processing volume to $246 million for Q2 2014
    versus $221 million in Q2 2013, representing a record quarter 

Subsequent to Q2 2014 Highlights:

--  Art Mesher appointed chairman of VersaPay's board of directors,
    effective August 20, 2014 

Q2 2014 Financial Summary(1)

----------------------------------------------------------------------------
                                   Three months ended,     Six months ended,
                                               June 30               June 30
                                --------------------------------------------
                                       2014       2013       2014       2013
----------------------------------------------------------------------------
Total Revenue                     $    4.8M  $    4.4M  $    9.2M  $    8.5M
----------------------------------------------------------------------------
Cash Operating Expenses(2)        $    1.5M  $    1.0M  $    2.8M  $    2.1M
----------------------------------------------------------------------------
Adjusted EBITDA(3)                $  (0.6)M  $  (0.1)M  $  (1.1)M  $  (0.4)M
----------------------------------------------------------------------------
Net Loss                          $  (0.7)M  $  (0.3)M  $  (1.5)M  $  (0.6)M
----------------------------------------------------------------------------
                                         June 30, 2014                      
------------------------------------------------------                      
Cash                              $              5.0 M                      
------------------------------------------------------                      
Notes:                                                                      
(1)  The unaudited condensed interim consolidated financial statements for  
     the three and six months ended June 30, 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.                                                         

"We are pleased with our results in Q2, especially with respect to the record results achieved by our POS Merchant Services business and our progress launching the Arc(TM) product into the market," said Craig O'Neill, VersaPay's CEO. "The strong results from our POS business continue to support the strategic investment we are making in Arc(TM)" as we build the foundation for future growth. After a good start in Q1 we have remained on course meeting our business objectives for Q2: enhancing the Arc(TM) team with top software talent, winning additional customers, going live with two major partners, rolling sales training out across Heartland's US-wide sales force and improving our direct sales capabilities. The sales pipeline has continued to build in both businesses as we see a growing level of interest in both Arc(TM) and our existing payment processing products and services. Furthermore, the expected synergies between the businesses are yielding improved results, with our Arc(TM) products opening up new opportunities for our POS salesforce and our credit card processing enhancing the revenue potential of some of our new Arc(TM) customers."

Q2 2014 Financial Review

Total revenues for Q2 2014 increased 11% to $4.8 million from $4.4 million in Q2 2013. Total revenues for the six months ended June 30, 2014 increased 8% from $9.2 million from $8.5 million in the six months ended June 30, 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 49% to $1.5 million from $1.0 million in Q2 2014 from the same period in 2013. Cash operating expense for the six months ended June 30, 2013 were $2.8 million compared to $2.1 million for the six months ended June 30, 2013, an increase of 35%.

Adjusted EBITDA for Q2 2014 was $(0.6) million, compared to $(0.1) million in Q2 2013. Adjusted EBITDA for the six months ended June 30, 2014 was $(1.1) million, compared to $(0.4) million for the six months ended June 30, 2013. Loss from continuing operations for Q2 2014 was $(0.7) million compared to a loss from continuing operations of $(0.3) million for Q2 2013. Loss from continuing operations for the six months ended June 30, 2013 was $(1.5) million compared to $(0.6) million for the same period in 2013.

Table A

----------------------------------------------------------------------------
                                Three months ended,       Six months ended, 
                                            June 30                 June 30 
                                   2014        2013        2014        2013 
                                      $           $           $           $ 
----------------------------------------------------------------------------
Adjusted EBITDA(1)             (570,211)   (141,451) (1,074,457)   (393,073)
Share based payments            (69,901)    (64,550)   (329,917)   (125,722)
Interest expense                (44,530)    (41,006)    (87,675)    (80,816)
Amortization                    (21,408)    (34,975)    (38,051)    (71,590)
Other income                          -      23,028           -      85,774 
----------------------------------------------------------------------------
Net Loss                       (706,050)   (258,954) (1,530,100)   (585,427)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:                                                                      
(1)  Adjusted EBITDA is defined as earnings before interest, taxes,         
     depreciation, amortization, share-based payments, and other income.    

Grant of Options

The Company also announces the grant of incentive stock options to certain directors of the Company to purchase up to 125,000 common shares in the capital stock of the Company under its share option plan. The options are exercisable at a price of $1.25 per share on or before August 28, 2019, subject to the approval of the TSX Venture Exchange and applicable hold and Company vesting periods.

About VersaPay

VersaPay is a leading cloud-based invoice presentment and payment provider for businesses of all sizes. VersaPay's Arc and ArcPay software-as-a-service offerings allow businesses to easily deliver customized electronic invoices to their customers, to accept credit card and EFT payments and automatically reconcile payments to their ERP and accounting software. 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.

Unaudited Condensed Interim Consolidated Statements of Financial Position

----------------------------------------------------------------------------
                                                    June 30,   December 31, 
                                                        2014           2013 
                                                           $              $ 
----------------------------------------------------------------------------
                                                                            
ASSETS                                                                      
Current                                                                     
Cash and cash equivalents                          4,825,957      1,276,410 
Restricted cash                                      185,790              - 
Funds held for merchants                           5,809,990      4,063,599 
Receivables                                          591,471        407,949 
Prepaid expenses                                     149,852         33,441 
----------------------------------------------------------------------------
                                                  11,563,060      5,781,399 
Non-current                                                                 
Equipment                                            299,149        194,999 
Intangible assets                                      5,859          7,215 
----------------------------------------------------------------------------
Total Assets                                      11,868,068      5,983,613 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES                                                                 
Current                                                                     
Accounts payable and accrued liabilities             511,941        289,465 
Funds due to merchants                             5,809,990      4,063,599 
Current portion of obligations under finance                                
 lease                                                12,913         24,367 
----------------------------------------------------------------------------
                                                   6,334,844      4,377,431 
Non-current                                                                 
Obligations under finance lease, net of                                     
 current portion                                           -          2,953 
Promissory note                                      740,253        698,927 
----------------------------------------------------------------------------
Total Liabilities                                  7,075,097      5,079,311 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
EQUITY                                                                      
Share capital                                     16,227,272     11,133,048 
Reserve                                            1,559,330      1,608,613 
Warrants                                             425,977         52,149 
Deficit                                          (13,419,608)   (11,889,508)
----------------------------------------------------------------------------
Total Equity                                       4,792,971        904,302 
----------------------------------------------------------------------------
Total Liabilities and Equity                      11,868,068      5,983,613 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Unaudited Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

----------------------------------------------------------------------------
                              Three months ended,         Six months ended, 
                                          June 30                   June 30 
                                2014         2013         2014         2013 
                                   $            $            $            $ 
----------------------------------------------------------------------------
                                                                            
Revenue                                                                     
  VersaPay Solutions         128,056       92,565      225,922      163,614 
  POS Merchant Services    4,719,863    4,291,596    8,956,807    8,358,520 
----------------------------------------------------------------------------
                           4,847,919    4,384,161    9,182,729    8,522,134 
----------------------------------------------------------------------------
                                                                            
Cost of Sales                                                               
  VersaPay Solutions          82,739       62,450      152,723      119,809 
  POS Merchant Services    3,888,812    3,504,607    7,387,819    6,796,664 
----------------------------------------------------------------------------
                           3,971,551    3,567,057    7,540,542    6,916,473 
----------------------------------------------------------------------------
Gross Profit                 876,368      817,104    1,642,187    1,605,661 
----------------------------------------------------------------------------
                                                                            
Expenses                                                                    
  Depreciation and                                                          
   amortization               21,408       34,975       38,051       71,590 
  General and office                                                        
   expenses                  205,088      146,690      403,851      291,949 
  Interest expense (note                                                    
   15 and 20)                 44,530       41,006       87,675       80,816 
  Marketing and                                                             
   promotion                  96,799       79,381      193,061      124,517 
  Professional and                                                          
   consulting fees           280,202      150,219      517,064      361,692 
  Rent and occupancy          46,221       52,249      120,822      127,361 
  Research and                                                              
   development               192,568       95,860      330,111      199,117 
  Salaries and benefits      625,701      434,156    1,151,735      894,098 
  Share based payments        69,901       64,550      329,917      125,722 
----------------------------------------------------------------------------
Total Expenses             1,582,418    1,099,086    3,172,287    2,276,862 
----------------------------------------------------------------------------
                                                                            
Other Income (note 19)             -       23,028            -       85,774 
                                                                            
----------------------------------------------------------------------------
Net Loss and                                                                
 Comprehensive Loss for                                                     
 the Period                 (706,050)    (258,954)  (1,530,100)    (585,427)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
                                                                            
Loss per share, basic    $     (0.03) $     (0.02) $     (0.08) $     (0.04)
                                                                            
Weighted average number                                                     
 of common shares                                                           
 outstanding, basic       20,932,875   15,485,044   19,943,541   15,426,700 
                                                                            
----------------------------------------------------------------------------

Unaudited Condensed Interim Consolidated Statements of Changes in Equity

----------------------------------------------------------------------------
                        Issued                                        Total 
                       Capital   Reserve  Warrants      Deficit      Equity 
                             $         $         $            $           $ 
----------------------------------------------------------------------------
As at December 31,                                                          
 2012                9,981,720 1,497,517   372,260  (10,778,860)  1,072,637 
Net loss for the                                                            
 period                      -         -         -     (585,427)   (585,427)
Shares Issued                -         -         -            -           - 
Exercise of options    284,917  (148,984)        -            -     135,933 
Share based                                                                 
 payments                    -   125,722         -            -     125,722 
----------------------------------------------------------------------------
At June 30, 2013    10,266,637 1,474,255   372,260  (11,364,287)    748,865 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
                        Issued                                        Total 
                       Capital   Reserve  Warrants      Deficit      Equity 
                             $         $         $            $           $ 
----------------------------------------------------------------------------
At December 31,                                                             
 2013               11,133,048 1,608,613    52,149  (11,889,508)    904,302 
Net loss for the                                                            
 period                      -         -         -   (1,530,100) (1,530,100)
Shares Issued        3,996,813         -   425,977            -   4,422,790 
Exercise of options    638,736  (205,400)        -            -     433,336 
Exercise of                                                                 
 warrants              284,875         -   (52,149)           -     232,726 
Share based                                                                 
 payments              173,800   156,117         -            -     329,917 
----------------------------------------------------------------------------
At June 30, 2014    16,227,272 1,559,330   425,977  (13,419,608)  4,792,971 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Unaudited Condensed Interim Consolidated Statements of Cash Flows

----------------------------------------------------------------------------
                                                  Six months ended June 30, 
                                                        2014           2013 
                                                           $              $ 
----------------------------------------------------------------------------
                                                                            
Cash Provided By (Used In) Operating                                        
 Activities                                                                 
  Net loss for the period                         (1,530,100)      (585,427)
    Items not affecting cash:                                               
    Depreciation of equipment                         36,695         42,314 
    Amortization of intangible assets                  1,356         29,277 
    Interest accreted on promissory note              41,326         32,237 
    Loss on disposal of equipment                          -         15,795 
    Share based payments                             329,917        125,722 
                                                                            
  Change in non-cash working capital items                                  
    Receivables                                     (183,522)       (17,296)
    Prepaid expenses                                (116,411)       (10,781)
    Accounts payable and accrued liabilities         222,476       (161,768)
----------------------------------------------------------------------------
                                                  (1,198,263)      (529,927)
                                                                            
Cash Provided By (Used in) in Investing                                     
 Activities                                                                 
  Acquisition of equipment                          (140,845)        (2,954)
  Proceeds on disposal of equipment                        -         11,900 
----------------------------------------------------------------------------
                                                    (140,845)         8,946 
                                                                            
Cash Provided by (Used In) Financing                                        
 Activities                                                                 
  Issuance of common shares, net of issuance                                
   costs                                           5,088,852        135,933 
  Finance lease payments                             (14,407)       (22,707)
----------------------------------------------------------------------------
                                                   5,074,445        113,226 
                                                                            
Increase (decrease) in cash and cash                                        
 equivalents                                       3,735,337       (407,755)
                                                                            
Cash and cash equivalents, beginning of period     1,276,410      1,461,388 
                                                                            
----------------------------------------------------------------------------
Cash and cash equivalents, end of period           5,011,747      1,053,633 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Cash and cash equivalents consist of the following:

----------------------------------------------------------------------------
                                                          2014          2013
                                                             $             $
----------------------------------------------------------------------------
Cash at bank and in hand                             1,008,091       195,922
Demand deposits                                      3,817,866       857,711
Restricted cash                                        185,790             -
----------------------------------------------------------------------------
                                                     5,011,747     1,053,633
----------------------------------------------------------------------------

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.

Contacts:
VersaPay Corporation
David CW Chan
CFO
(647) 258-9475
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Businesses and business units of all sizes can benefit from cloud computing, but many don't want the cost, performance and security concerns of public cloud nor the complexity of building their own private clouds. Today, some cloud vendors are using artificial intelligence (AI) to simplify cloud deployment and management. In his session at 20th Cloud Expo, Ajay Gulati, Co-founder and CEO of ZeroStack, discussed how AI can simplify cloud operations. He covered the following topics: why cloud mana...
As more and more companies are making the shift from on-premises to public cloud, the standard approach to DevOps is evolving. From encryption, compliance and regulations like GDPR, security in the cloud has become a hot topic. Many DevOps-focused companies have hired dedicated staff to fulfill these requirements, often creating further siloes, complexity and cost. This session aims to highlight existing DevOps cultural approaches, tooling and how security can be wrapped in every facet of the bu...
DevOps at Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to w...
SYS-CON Events announced today that CAST Software will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CAST was founded more than 25 years ago to make the invisible visible. Built around the idea that even the best analytics on the market still leave blind spots for technical teams looking to deliver better software and prevent outages, CAST provides the software intelligence that matter ...
SYS-CON Events announced today that Golden Gate University will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Since 1901, non-profit Golden Gate University (GGU) has been helping adults achieve their professional goals by providing high quality, practice-based undergraduate and graduate educational programs in law, taxation, business and related professions. Many of its courses are taug...
Recently, WebRTC has a lot of eyes from market. The use cases of WebRTC are expanding - video chat, online education, online health care etc. Not only for human-to-human communication, but also IoT use cases such as machine to human use cases can be seen recently. One of the typical use-case is remote camera monitoring. With WebRTC, people can have interoperability and flexibility for deploying monitoring service. However, the benefit of WebRTC for IoT is not only its convenience and interopera...
Translating agile methodology into real-world best practices within the modern software factory has driven widespread DevOps adoption, yet much work remains to expand workflows and tooling across the enterprise. As models evolve from pockets of experimentation into wholescale organizational reinvention, practitioners find themselves challenged to incorporate the culture and architecture necessary to support DevOps at scale.
Vulnerability management is vital for large companies that need to secure containers across thousands of hosts, but many struggle to understand how exposed they are when they discover a new high security vulnerability. In his session at 21st Cloud Expo, John Morello, CTO of Twistlock, will address this pressing concern by introducing the concept of the “Vulnerability Risk Tree API,” which brings all the data together in a simple REST endpoint, allowing companies to easily grasp the severity of t...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From planning to development to management to security, CA creates software that fuels transformation for companies in the applic...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
In his session at 20th Cloud Expo, Scott Davis, CTO of Embotics, discussed how automation can provide the dynamic management required to cost-effectively deliver microservices and container solutions at scale. He also discussed how flexible automation is the key to effectively bridging and seamlessly coordinating both IT and developer needs for component orchestration across disparate clouds – an increasingly important requirement at today’s multi-cloud enterprise.
In his session at @ThingsExpo, Dr. Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, presented the findings of a series of six detailed case studies of how large corporations are implementing IoT. The session explored how IoT has improved their economic performance, had major impacts on business models and resulted in impressive ROIs. The companies covered span manufacturing and services firms. He also explored servicification, how manufacturing firms shift from se...
WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web communications world. The 6th WebRTC Summit continues our tradition of delivering the latest and greatest presentations within the world of WebRTC. Topics include voice calling, video chat, P2P file sharing, and use cases that have already leveraged the power and convenience of WebRTC.
IT organizations are moving to the cloud in hopes to approve efficiency, increase agility and save money. Migrating workloads might seem like a simple task, but what many businesses don’t realize is that application migration criteria differs across organizations, making it difficult for architects to arrive at an accurate TCO number. In his session at 21st Cloud Expo, Joe Kinsella, CTO of CloudHealth Technologies, will offer a systematic approach to understanding the TCO of a cloud application...
An increasing number of companies are creating products that combine data with analytical capabilities. Running interactive queries on Big Data requires complex architectures to store and query data effectively, typically involving data streams, an choosing efficient file format/database and multiple independent systems that are tied together through custom-engineered pipelines. In his session at @BigDataExpo at @ThingsExpo, Tomer Levi, a senior software engineer at Intel’s Advanced Analytics ...