Katipult Releases Q3 2020 Results

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Katipult Releases Q3 2020 Results

Canada NewsWire

CALGARY, AB, Nov. 20, 2020 /CNW/ - Katipult Technology Corp. (TSXV: FUND) ("Katipult" or the "Corporation"), provider of an industry leading and award-winning cloud-based software infrastructure for powering the exchange of capital in equity and debt markets, is pleased to announce its financial results for the three- and nine-month periods ended September 30, 2020.

"Despite the challenges of Covid-19, the Corporation's strategic objectives established at the beginning of 2020 to improve the efficiency of private capital transactions and focus on this underserved market have largely been achieved," said Gord Breese, Katpult's CEO.  "Going into 2021, the Corporation will focus its efforts on driving new MRR and positioning its product to become a leading equity capital markets and alternative lending solution in the enterprise market across North America."

Q3 Summary









2020

2019

2018

($ Cdn thousands)

 Q3 

 Q2 

 Q1 

 Q4 

 Q3 

 Q2 

 Q1 

 Q4 

Subscription revenue 

301

329

329

329

365

307

303

251

Integration revenue

-

-

31

53

22

77

160

24

Total revenue

301

329

360

382

387

384

463

275

Gross profit 

232

253

295

312

311

306

377

201

Gross profit - percentage

77.1%

76.9%

81.9%

81.7%

80.4%

79.7%

81.4%

73.1%

Selling, general, and administrative

494

495

517

509

438

447

494

569

Research and development

190

219

182

161

190

212

254

257

Adjusted EBITDA 

(387)

(325)

(267)

(219)

(242)

(224)

(238)

(511)

Net income (loss) and









   comprehensive income (loss)

(768)

(620)

(728)

709

(353)

(343)

(707)

(520)

  • On August 13, 2020, the Corporation announced that TSX Trust Company ("TSX Trust"), a subsidiary of TMX Group Limited, has selected Katipult's SaaS platform to power its new digital deal management service designed to automate workflow for private placements and streamline the issuer and investor onboarding process. Following an extensive evaluation process, TSX Trust selected Katipult's robust technology, rich functional depth and intuitive user experience for its new digital platform. The multiyear agreement between TSX Trust and Katipult will focus on delivering a range of new digital deal management solutions to the market and is expected to be launched by TSX Trust in the next one to two quarters.
  • The Corporation continues to expand and improve its product to meet the evolving needs of existing and prospective new customers. Since the latter half of 2018, the Corporation has been focusing on fewer but more established, larger clients. This is part of a deliberate strategy at Katipult to move up market and to demonstrate our value proposition in the enterprise market. Subscription revenue for the three- and nine-month periods decreased to $301K and $959K, over the comparable period in fiscal 2019. The decrease in revenue is due to the Corporation's focus on the enterprise market, which has a longer sale cycle, combined with an increase churn in the small customers.
  • The Corporation did not have any integration revenue in the third quarter of 2020. The Corporation expects to have limited integration revenue as it reduces its emphasis on non-recurring integration revenue.
  • One of the Corporations key metrics is Monthly Recurring Revenue (MRR). The focus of the management of the Corporation is to grow the MRR through targeting more established customers. Management expects this strategy to generate higher per customer recurring revenue and reduce the current number of smaller customers. The MRR as at September 30, 2020 is $118K. During the third quarter the Corporation increased MRR by $40K with new customers and decrease MRR of $32K due to churn of smaller, less established customers.
  • Gross profit percentage was to 77.1% in the third quarter of 2020 (2019: 80.4%). The lower gross profit was largely due to lower integration revenue partially offset by lower expenses related to cost of revenue. The Corporation has maintained a gross profit percentage over 70% for the past eleven quarters.
  • Adjusted EBITDA losses increased to $387K in the third quarter of 2020 (2019: loss $242K) primarily due to lower integration revenue and higher selling, general, and administrative costs. Similarly, the Corporation's net loss and comprehensive loss increased to $768K in the third quarter of 2020 compared to $353K in third quarter of 2019. The increased loss is due to a $216K non-cash increase in the fair value liability relating to the Corporation's outstanding convertible debentures in addition to lower integration revenue, higher selling, general, and administrative costs, lower other Income, and higher finance costs, partially offset by higher subscription revenue
  • Cash, cash equivalents and marketable securities balance as at September 30, 2020 was $1.1 million compared to $1.9 million as at December 31, 2019.

About Katipult 
Katipult (www.katipult.com) is a provider of industry leading and award-winning software infrastructure for powering the exchange of capital in equity and debt markets. Our cloud-based platform and solutions digitize investment workflow by eliminating transaction redundancy, strengthening compliance, delighting investors, and accelerating deal flow. Katipult provides unparalleled adaptability for regulatory compliance, asset structure, business model, and localization requirements.

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. 

Forward-Looking Statement
Cautionary Note Regarding Forward Looking Statements: Certain disclosure in this release, including statements regarding the increased or continued industry interest in the Corporation's product, converting existing sales interest and installations into revenue, generating new sales opportunities, effectively and efficiently utilizing the Corporation's resource and the ability to deal with business disruptions or opportunities as a result of the Covid-19 pandemic constitute forward-looking statements. In making the forward-looking statements in this release, the Corporation has applied certain factors and assumptions that are based on the Corporation's current beliefs as well as assumptions made by and information currently available to the Corporation, including, but not limited to, the Corporation's anticipated cash needs, that the cash available to the Corporation is as expected, the Corporation's product will continue to operate as expected, the industry will continue to see value in the Corporation's product, the Corporation will be able to recruit talented and experienced sales, support and other individuals required to execute the Corporation's plans, and that the Corporation's employees, consultants, customers, suppliers and other stakeholders will be able to manage successfully throughout the Covid-19 pandemic. Although the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such risk factors may include, among others, the risk that cash available to the Corporation is not as expected, failure to manage growth successfully, lengthier than anticipated sales and implementation cycle, cyber risks, risks related to cloud based solutions, failure to continue to adapt to technological change and new product development, dependence on key personnel, competition, intellectual property risks, economic conditions, the financial and economic fallout due to the Covid-19 pandemic, privacy concerns and legislation, regulatory environment, risk associated with a change in the Corporation's pricing model, risk of defects in the Corporation's solution, dependence on market growth, operational service risk, dependence on partners and delay or failure to realize anticipated benefits of key account installations. Readers are cautioned, especially in these uncertain times, not to place undue reliance on forward-looking statements. The Corporation does not intend to, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

SOURCE Katipult Technology Corp.

Cision View original content: http://www.newswire.ca/en/releases/archive/November2020/20/c3574.html

Copyright CNW Group 2020

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