FUND Katipult Technology Corp

CALGARY, AB, April 20, 2021 /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 twelve-month periods ended December 31, 2020.

"2020 was a year of transformation for Katipult. We added seasoned leadership to the team, we enhanced the functionality and scalability of our products, and most importantly, we shifted our focus and customer targets to include leading equity capital markets and alternative lending businesses in North America," said Gord Breese, Katipult's CEO. "The foundational changes of 2020 are beginning to deliver results in 2021 with the recently announced investment by, and partnership with, Canaccord Genuity and the addition of Raymond James as a customer. We look forward to building on this momentum throughout 2021."

The following provides a summary of the Q4 2020 results. The annual results and related management discussion and analysis are available on the Corporation's SEDAR profile (www.sedar.com).

Q4 Summary

Revenue
Subscription revenue for the three-month period ended December 31, 2020 was $329 consistent with revenue over the comparable period in fiscal 2019. The increase in Q4 2020 over Q3 2020 is due to new, more established customers gained partially offset by churn in smaller customers.

One of the Corporations key metrics is subscription revenue and Management's focus is to grow the subscription revenue by targeting equity capital markets firms.  Management expects this strategy will generate higher per customer recurring revenue, but a natural by-product has been some reduction in legacy customers that contributed to Katipult's early growth.

The Corporation did not have any integration revenue in the fourth quarter of 2020. The Corporation expects to have limited to no integration revenue as it reduces its emphasis on non-recurring revenue streams.

The gross profit percentage was 76.9% for the quarter ended December 31, 2020 (2019: 81.7%). The lower gross profit was largely due to lower integration revenue partially offset by lower expenses related to cost of revenue.

Selling, general, and administration
For the three months ended December 31, 2020, total selling, general and administration (SG&A) expenses decreased by $286, compared to the same period in 2019. The reduced expenditure is largely due to a reversal of stock-based payments due to cancelled options, partially offset by an increase in bad debt expense.

Research and development
Research and development (R&D) expenses for the three months ended December 31, 2020, increased by 21.1% to $195 when compared to the same period in 2019; however, they remained constant quarter over quarter. The increase from previous year was due to the Corporation's continued investment in its R&D efforts.

Subsequent Events
Katipult just completed its most productive quarter ever (1Q 2021), with the closing of the $3 M Canaccord Genuity financing, the transaction with Raymond James in the US, and the expansion of our relationship with Canaccord Genuity in Canada for their continued use of the Katipult platform.

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.

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 MD&A available on the Corporation's SEDAR profile at www.sedar.com for a discussion of non-GAAP measures and their reconciliations.

SOURCE Katipult Technology Corp.