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™ 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™ 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™" 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™ 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™ and our existing payment processing products and services. Furthermore, the expected synergies between the businesses are yielding improved results, with our Arc™ products opening up new opportunities for our POS salesforce and our credit card processing enhancing the revenue potential of some of our new Arc™ 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
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the bene...
In this presentation, you will learn first hand what works and what doesn't while architecting and deploying OpenStack. Some of the topics will include:- best practices for creating repeatable deployments of OpenStack- multi-site considerations- how to customize OpenStack to integrate with your existing systems and security best practices.
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and G...
"DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great team at @DevOpsSUMMIT and CloudEXPO tell the world how they can leverage this emerging disruptive trend."
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...
You want to start your DevOps journey but where do you begin? Do you say DevOps loudly 5 times while looking in the mirror and it suddenly appears? Do you hire someone? Do you upskill your existing team? Here are some tips to help support your DevOps transformation. Conor Delanbanque has been involved with building & scaling teams in the DevOps space globally. He is the Head of DevOps Practice at MThree Consulting, a global technology consultancy. Conor founded the Future of DevOps Thought Leade...
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
Everyone wants the rainbow - reduced IT costs, scalability, continuity, flexibility, manageability, and innovation. But in order to get to that collaboration rainbow, you need the cloud! In this presentation, we'll cover three areas: First - the rainbow of benefits from cloud collaboration. There are many different reasons why more and more companies and institutions are moving to the cloud. Benefits include: cost savings (reducing on-prem infrastructure, reducing data center foot print, redu...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Founded in 2000, Chetu Inc. is a global provider of customized software development solutions and IT staff augmentation services for software technology providers. By providing clients with unparalleled niche technology expertise and industry experience, Chetu has become the premiere long-term, back-end software development partner for start-ups, SMBs, and Fortune 500 companies. Chetu is headquartered in Plantation, Florida, with thirteen offices throughout the U.S. and abroad.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term.
The technologies behind big data and cloud computing are converging quickly, offering businesses new capabilities for fast, easy, wide-ranging access to data. However, to capitalize on the cost-efficiencies and time-to-value opportunities of analytics in the cloud, big data and cloud technologies must be integrated and managed properly. Pythian's Director of Big Data and Data Science, Danil Zburivsky will explore: The main technology components and best practices being deployed to take advantage...