Chief Executive Officer
INVESTOR PRESENTATION
Q3 2015
Craig O’Neill
David Chan
2
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 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.
Current State of A/R Management
3
Supplier Creates
Invoice
Sends invoice to
buyer
(Paper or Email)
Buyer routes for
internal
approval
Supplier sends
reminder email
Buyer requests
new invoice
4
Complicated and Costly
Frustrated customers
Wasted time
High bad debt expense
Organizational inefficiencies
Late Payments
5
Financial technology company delivering integrated
cloud-based payment solutions for businesses
VersaPay
6
2006
Company Founded
2010
#1
Rank in Profit Top 50 in 2009
Initial Public Offering
What Versapay Delivers
7
POS Merchant Services
Business Solutions
Reseller of credit card terminals
Track record of new account growth
Recurring fees generated on
transaction volumes
Long term relationships with
customers and technology partners
Cash flow positive
SaaS-based electronic invoice and
payment system
Designed to streamline accounts
receivable management
Product is delivered to end users
through direct sales and partnership
arrangements
Versapay Solutions Products
ARC
- Supplier portal
- Customer portal
Gateway
- Payment Processing Services
- Payment Gateway Services
- Application services (users, logging, etc)
- Credential Vault
- Notification Services
PayPort
- UI for individuals /
small businesses to
make and receive
payments
Future apps
- Payment API
- Invoice API (future)
- File import
- Processor connectivity
- AR connectors
- AP connectors (future)
Admin
Console
- Admin tools
8
ARC: Accounts Receivable Cloud
9
COMPANY:
Publish invoices and
supporting documents
Collaborate with customers
Track and analyze customer
behavior
Auto reconcile and clear
CUSTOMERS:
One-click access
Convenient and secure
Collaborate with you
Choice of payment options
ARC Advantage
Invoice and collect more efficiently
Get paid electronically, get paid faster
Reduce costs vs manual or on premise systems
Satisfy customers desire to pay electronically
Make credit cards a cash flow tool
Eliminate security issues with customer data
Get started quickly and easily
10
The Opportunity
(Selected Verticals)*
11
165,000
U.S. firms with $50M to $1B
in revenue
>$5B
USD
In annual recurring revenue
88%
Percent of U.S. firms rely on
paper invoices
Selected Vertical Industries:
•
Media
•
Trucking / Logistics
•
Commercial Realty / Property Managers
•
Wholesale / Distributors
•
Manufacturing
•
Professional Services
*
1,582
3,845
1,120
50M-100M 100M-500M 500M-1B12
A/R Automation/Outsourcing
•
BillTrust
•
Direct Insite
•
Transactis
•
Kubra
•
HighRadius
•
Banks
A/P Automation/Outsourcing
•
Oracle
•
SAP
•
Esker
•
Corcentric
•
Ariba
•
Bottomline Technologies
•
Banks
Email-based Invoicing
•
Freshbooks
•
Wave
•
Intuit
•
Sage
•
Invoice2go
Procure-To-Pay
•
Cortex
•
Esker
•
Corcentric
•
Ariba
Ecosystem & Competition
La
rge
SUPPLIER
Small
Small BUYER Large
13
ARC:
Positioned to Grow Rapidly
A compelling value
proposition
A large untapped market
with limited competition
Our approach overcomes
historical obstacles
Experience in the market has
proven our story is
compelling
Addressable market is
estimated to be at least 5B
Limited competition
The solution, pricing and
implementation approach
takes away reasons to say no
14
ARC:
Positioned to Grow Rapidly
A compelling value proposition
A large untapped market with
limited competition
Our approach overcomes
historical obstacles
Partnerships with major industry
players give us significant market
reach
Several trends are leading
towards change
Experience in the market has
proven our story is compelling
Addressable market is estimated to
be at least 3.5B
Very limited competition
The solution, pricing and
implementation approach takes
away reasons to say no
Heartland, TD, Visa, MasterCard,
more on the way
Growth Profile –
The Early Adopter Phase
15
09/13-06/14
ARC
Development Phase
07/14-04/15
Pilot Phase with
early adopters
05/15-12/15
Graduate from early
adopters
2016
-Expand Sales and
Partners to scale-up
“First 5”
“5 to 25”
2013
16
Early Adopter Phase Progress
25
13
Suppliers signed
Suppliers live
Excellent Customer Feedback
1M
Annual recurring revenue from
current signed customers
$5-7M
Annual recurring revenue from
current pipeline
Customers registered
11,000
*
17
Recent Highlights
Three banks interested in
reselling ARC
ERP vendor agrees to use
ARC and refer customers
First unsolicited leads
received
RFP (from large US
manufacturer)
First 1M invoice/month
opportunity
$9,100,000
In paid invoices
27%
Percent of invited
end-customers registered
670,000
Customer Success Stories
Municipal government pays 22 outstanding invoices dating
back 6 months. A/P user calls in to say “how much everyone
loves this new system”
Buyer pays $68,000 of overdue invoices in response to ARC’s
automatic 30-day overdue reminder
Buyer logs in, signs up and pays all outstanding invoices
within 5 minutes of ARC sending invitation
Buyer automatically opts-in for AutoPay within days of
feature being introduced
Agency buyer pays all outstanding invoices with one click
using Pay All feature
19
Revenue Model
Business Solutions
POS Merchant Services
Monthly
subscription fee
Credit card
transaction fee
Sale of credit
card terminals
Credit card
transaction fee
>95%
Recurring Revenue
+
+
21
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2013
2014
2015
Profitable
Stable
POS Volumes Continue to Grow
Cr
edit
Car
d
$
V
alue
(in
thous
ands)
22
Revenue:
Growth Expected From Business Solutions
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Q2 '13
Q3 '13
Q4 '13
Q1 '14
Q2 '14
Q3 '14
Q4 '14
Q1 '15
Q2 '15
Q3 '15
Business Solutions
POS Merchant Services
R
ev
enue
(in
thous
ands)
*
23
Financial Summary
($000
’
s)
Q3
’
15
Q3
’
14
FY
’
14
FY
’
13
Revenue:
$1,385
$1,358
$ 5,165
$ 4,819
Gross Profit
733
839
3,210
3,212
Gross Margin
53%
62%
62%
67%
Adjusted EBITDA
(1,164)
(785)
(2,717)
(670)
Net income (loss)
(1,631)
(1,085)
(3,556)
(1,110)
24
Corporate Information
Ticker (TSXV)
VPY
Market Capitalization
(11/24/15)
$30.6M
Stock Price
(11/24/15)
$1.20
Shares Outstanding (Basic)
25,500,990
Options
3,641,618
Fully Diluted Shares Outstanding
32,994,680
Year End
December 31st
Cash and cash equivalent
(09/30/15)
$4.3M
Management Team
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 November 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. His background includes management of large development groups, designing and building foundational components of corporate system architectures and applications, overseeing enterprise CRM implementations and driving strategic business initiatives. Craig holds a B.Sc. from the University of Toronto in Computer Science and Mathematics.
David C W Chan – Chief Financial Officer and Corporate Secretary
David has served as VersaPay’s CFO and Corporate Secretary since 2011. He has over 24 years of experience working with high growth technology companies. Prior to VersaPay, David was an M&A and corporate finance professional and advised on over 30 transactions with a total value of over $1 billion. David has also been an investor and principal in several software start-ups. He is a Chartered Accountant, and previously worked with Ernst & Yong. David is also a CPA and CFA charterholder and has an MBA from the Schulich School of Business at York University.
John McLeod – Vice President, Marketing
John McLeod joined VersaPay in October 2014 responsible for creating and delivering the company’s brand and marketing strategy. John was formerly Vice President, Marketing at Desire2Learn, a global SaaS based learning solutions provider. During his tenure he was instrumental in its growth from 35 employees to a global enterprise of nearly 900 employees serving 13 million learners. John has been a key member of senior management teams driving growth in both start-up ventures and large technology companies including MetroNet Communications, AT&T Canada and Allstream. John holds a BBA from Wilfrid Laurier University, an MBA from the Ivey School of Business at Western University and a CMA designation.
Geoff Coutts – Vice President, Sales
Geoff Coutts has over 25 years experience with such notable technology companies as Samsung, Verizon and Hewlett-Packard. In his role as VP Sales, Enterprise Business, at Samsung Canada he was responsible for managing the sales of mobility and IT related products and services to businesses. Prior to Samsung, Mr. Coutts was the VP & General Manager for Canada for Verizon Enterprise Solutions. He joined Verizon after a long career with Hewlett-Packard Canada, where he progressed from business unit manager to eventually become VP Sales, Enterprise Services.
Mislav Majic – Vice President, Sales Engineering
Mislav Majic joined VersaPay in October 2011 and is responsible for leading the sales team to deliver on the company’s solutions vision. He brings with him 15 years of experience building and leading software solutions business in the financial services technology sector. Prior to joining VersaPay Mislav was a partner at Facta Vera, a payment automation and cash management solution provider for enterprise level organizations. In that capacity, Mislav oversaw the vision, strategy and growth from start up onwards, ultimately serving hundreds of Fortune 1000 customers throughout North America. He has a Bachelor of Business Administration degree from Ryerson University.
Management Team
Garry Chan – Vice President, Products
Garry Chan joined VersaPay as Vice President, Products in January 2014. He has more than 20 years of experience as a technology entrepreneur and leader. Prior to VersaPay, Garry was founder of goodiest.com, a cloud-based technology start-up for small business and before that, Managing Partner at Procase Consulting Inc., a Toronto-based IT professional services company. Garry holds a B.Sc. from the University of Calgary, an MBA from the Rotman School of Management at University of Toronto, and a M.Sc. from Carnegie Mellon University.
Frank Opat – Vice President, Software Engineering
Frank Opat joined VersaPay Corporation in February 2014 and leads the software engineering group. Over the past 15 years, he has brought enterprise scale software solutions to market globally, as a consultant, product architect, product manager, and entrepreneur. Prior to joining VersaPay, Frank held senior product leadership roles at Temenos through acquisitions of Odyssey Financial Technologies & Xeye. He co-founded and designed several products servicing the CRM & document management needs of the Canadian mortgage industry. Frank holds a Bachelor of Mathematics & Honours Computer Science from the University of Waterloo.
Patrick MacDonald – President, POS Group
Patrick MacDonald joined VersaPay in January 2010 and leads the company’s national POS sales and account management teams as well as the merchant sales support team. Patrick has 18 years of business development experience. Prior to joining VersaPay, he partnered and worked with one of Canada's leading ATM distributors, rapidly becoming the number one distributor across Canada. He served as the Director of National Sales for a national marketing company, where he was instrumental seeing it become one of Canada's largest marketing and fulfillment houses.
Kevin Short – Co-Founder and Chief Information Officer
Kevin Short co-founded VersaPay Corporation in 2006 and serves as its Chief Information Officer. Prior to VersaPay Kevin developed the security architecture and oversaw the security design and implementation for the Vancouver 2010 Olympics for Bell Canada. Kevin has been involved in designing, securing and implementing banking infrastructure for Canada's leading financial institutions for more than 13 years. In his career, Kevin has served in a senior capacity for Sun Microsystems, Nortel Networks, TELUS, Shaw Communications, Bell Canada, Enbridge and TransCanada Pipelines.
