PaySauce 2019 Annual Results Announcement

Financial Results For The Year Ended 31 March 2019 29 May 2019 PaySauce Limited (NZX:PYS) ('the Company') is pleased to present its financial results for the year ended 31 March 2019. PaySauce Limited is the parent company of PaySauce Operations Limited, and Right Remuneration Limited (together forming 'PaySauce' or 'the Group'). The results presented below are for the Group, and are based on figures which are in the process of being audited. See attached PDFs for full text, graphics, and footnotes. Highlights for the year ended 31 March 2019 - Adjusted revenue for the year of $1.007M - Customer numbers have grown 86% from 746 in March 2018 to 1,384 in March 2019 - Adjusted recurring revenue from customers has increased 131% year on year from $0.362M for March 2018 to $0.834M for March 2019 - Adjusted expenses of $1.532M - Adjusted net loss before tax for the year of $0.526M - ARR is up 108% on the March 2018 figure of $0.498M, to $1.038M as at 31 March 2019 - Successfully joined the NZX through the reverse acquisition of Energy Mad Limited Other Commentary - Total assets increased from $3.866M as at March 2018 to $8.091M as at March 2019. Of this, there was an increase in funds held on behalf of customers from $3.410M to $6.273M as at March 2019, and an increase in intangible assets from $0.108M to $0.297M as at March 2019. - PaySauce had 16 FTE employees as at 31 March 2019, including 5 in product development. - Under NZ IAS 12 Income Taxes, a deferred tax asset has been recognised as at 31 March 2019 of $1.060M. This represents the future tax value of losses expected to be utilised in years to come. April 2019 Strong revenue growth through to the end of the 2019 financial year has continued in the first month of the 2020 financial year. The company has recorded unaudited MRR6 for April 2019 of $0.118M, up 145% on April 2018, and up 37% on March 2019. Outlook CEO and co-founder, Asantha Wijeyeratne, on PaySauce's outlook for the year to come: "With a strong year of continued growth, PaySauce is in a great position to leverage our growing foothold in the market and continue to build our customer base. The release of our new platform allows us to offer expanded services to both new and existing customers beyond just payroll. We're excited for the year ahead." Explanation of Funds Held in Trust As a Payroll Intermediary, PaySauce processes PAYE obligations to Inland Revenue on behalf of our customers. Each pay run, a customer pays the PAYE amount to PaySauce, to hold on their behalf until payment is due with Inland Revenue. Once these funds are transferred, the obligation of making payment to Inland Revenue is transferred to PaySauce under the Income Tax Act (Section RP 2). This provides security to customers that their PAYE obligations have been met once paid to PaySauce. Funds held are put on deposit from time to time, to generate interest income for PaySauce. Outside of this, there is no scope for operational use of these funds. PaySauce recognises these funds as an asset in the Consolidated Statement of Financial Position for the Group, as well as a corresponding liability to Inland Revenue for the PAYE payments due each month. Explanation of EML Transaction & Impact on Revenue and Expenditure On 21 December 2018 PaySauce joined the NZX through the reverse acquisition of Energy Mad Limited, a non-trading Company listed on the NZX. As part of the reverse acquisition and the preceding restructure process, cash expenditure was incurred, and several accounting adjustments to revenue and expenditure were required. These impacted on the Consolidated Statement of Comprehensive Income for the Group. The two tables in the attached document "PaySauce 2019 Results Announcement" set out the results for the year, one unadjusted for the elements discussed above, and one adjusted for these - which provides a clearer reflection of the operational performance of the Group. Further information on the reverse acquisition, and the associated costs and accounting adjustments, can be found in the notes to the Condensed Consolidated Financial Statements and the NZX Listing Profile (this can be found on the investor tab of the PaySauce website). Appendices Appendices 1 & 2 are found in the attached document "PaySauce 2019 Results Announcement". Appendices 3 & 4 are attached separately. Appendix 1 - NZX Template for Results Announcement to the Market Appendix 2 - Summary of Changes from NZX Listing Profile Appendix 3 - Unaudited Condensed Consolidated Financial Statements of PaySauce Limited for the year ended 31 March 2019 Appendix 4 - Audited Consolidated Financial Statements of PaySauce Operations Limited for the year ended 31 March 2018 Non-GAAP financial information Non-GAAP (Generally Accepted Accounting Principles) financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities. Non-GAAP information has not been audited, and is not prepared in accordance with NZ IFRS. The measures reported by PaySauce are used by management to monitor the performance of the company and are useful to investors to assess performance. Non-GAAP measures are defined and explained by footnote where used in this release. For more information Please contact investor@paysauce.com, or visit our website www.paysauce.com/investor. About PaySauce PaySauce provides award-winning SaaS payroll to small and medium sized businesses. With PaySauce, employers can manage payroll and run pays accurately and efficiently from web, iOS and Android applications. The PaySauce platform currently includes mobile timesheets, payroll calculations, banking integration, PAYE filing, labour costing, automated general ledger entries and digital employment contracts. Appendix 1 This appendix is issued to accompany PaySauce Limited's Condensed Consolidated Financial Statements and commentary released to the NZX today, and should be read in conjunction with these. See the attached document "PaySauce 2019 Results Announcement" for results for announcement to the market. Please refer to the comments on the following pages, and the financial statements. Authority for this announcement Name of person authorised to make this announcement - Logan Tyson Contact person for this announcement - Tod Rookes Contact phone number - 027 3507402 Contact email address - investor@paysauce.com Date of release through MAP - 29 May 2019 Appendix 2 Summary of Changes from NZX Listing Profile The numbers used in section 4 of the listing profile prepared in connection with the proposed acquisition of PaySauce Limited by Energy Mad Limited, prior to the reverse acquisition, were based on unaudited financial statements. For the year ended 31 March 2018, certain changes have since occurred as a result of the audit of the financial statements. See the attached document "PaySauce 2019 Results Announcement" for details. These are a result of the following changes: - Change in the treatment and amortisation of intangible assets. - Adjustment to the accrual of expenditure. - Recognition of PAYE funds held on behalf of customers, and the associated IRD liability on the balance sheet. This is explained further in the commentary to which this appendix is attached. End CA:00335214 For:PYS Type:FLLYR Time:2019-05-29 10:02:13