FUND Katipult Technology Corp

CALGARY, AB, Aug. 19, 2021 /CNW/ - Katipult Technology Corp. (TSXV: FUND) ("Katipult" or the "Corporation"), a leading Fintech provider of software for powering the exchange of capital in equity and debt markets, is pleased to announce its financial results for the three- and six-month period ended June 30, 2021.

"We continue to execute our growth plan to provide innovative digital solutions to leading financial services firms," said Gord Breese, Katipult's President and CEO. "Adding Cormark Securities as a customer, along with key additions to our leadership team in Q2, are positive contributors to our market traction and momentum"

The following provides a summary of the results for the second quarter of 2021. The full results and related management discussion and analysis are available on the Corporation's SEDAR profile (www.sedar.com).

Q2 2021 Summary and Highlights 

Cormark Selected Katipult to Digitize its Private Placement Process

On June 22, 2021, Katipult announced that Cormark Securities Inc.,a leading independent investment dealer, would deploy Katipult's Platform as a strategic initiative to enhance its client experience and optimize internal workflow efficiencies through increased digitization while ensuring best in class regulatory compliance. Cormark will work with Katipult to streamline and digitize account openings, private placement subscriptions, and other compliance and internal functions within a fully integrated, secure, single platform.

Additions to Katipult's Executive Leadership Team

On May 19, 2021, Katipult announced the appointment of James Church as VP, Product, and Stephen Donovan, VP, Customer Success to further scale the Corporation's go-to-market strategy

Mr. Church has extensive experience in product management and a proven track record of driving growth and building high value SaaS software products within the financial services industry. Mr. Church was most recently VP Products at FINCAD, a capital markets FinTech vendor. Prior to FINCAD, Mr. Church was a key member of the product leadership team at Crystal Decisions, introducing the Crystal Analysis product line and helping the company become the fastest growing Business Intelligence vendor. Crystal Decisions was sold for $820 million to Business Objects.

Mr. Donovan is a seasoned client relations leader who played a key role at Refinitiv (formerly Thomson Reuters Financial & Risk) tailoring engagement strategies that helped customers maximize the value derived from Refinitiv solutions. Mr. Donovan led the Customer Success team for commodity and equity trading in the Americas, where he helped drive retention rates of 90%. Prior to his leadership role, Mr. Donovan managed a portfolio of customers across Canada including commodity trading, pension funds, and corporates that generated $550K in monthly recurring revenues.

Financial Highlights

The Corporation continues to grow its Subscription Revenue recording quarter-over-quarter growth of 8.2%. When compared to the second quarter last year, Subscription Revenue grew by 24%.

• The Corporation's new Investment Services revenue stream has contributed $9K so far in 2021 and is expected to continue to grow.
• Gross profit percentage was 79.2% in the second quarter of 2021. The Corporation has been able to consistently maintain a gross profit percentage over 70% since the fourth quarter of 2017.
• Adjusted EBITDA losses increased to $376K in three-months ended June 30, 2021, mostly due to the increased salaries, subcontractors, and benefits expenditures - as the Corporation invests in key employees - partially offset by an increase in revenue.
• The Corporation's net loss and comprehensive loss was $323K in the second quarter of 2021. The decreased loss is largely due to the revaluation of the 2018 Convertible Debentures partially offset by a lower EBITDA (for the reasons mentioned above) and higher finance costs from the accretion of the 2021 Debenture.
• Cash, cash equivalents and marketable securities balance as at June 30, 2021 was $3.5 million.

Cautionary Note Regarding Forward Looking Statements

Certain disclosure in this release, including statements regarding execution on the Corporation's growth plan, 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.

Non-GAAP Financial Measures

This news release refers to certain Non-GAAP financial measures that are not determined in accordance with International Financial Reporting Standards ("IFRS"). "Gross profit", "adjusted EBITDA" and "churn" are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Management considers these to be important supplemental measures of Katipult's performance and believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. See "Non-GAAP Measures and Additional GAAP Measures" in the Corporation's December 31, 2020 and June 30, 2021 MD&A available on the Corporation's SEDAR profile at www.sedar.com for a discussion of non-GAAP measures and their reconciliations.

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.

SOURCE Katipult Technology Corp.