VersaPay Announces 2009 Year-End Results

- Company generates more than 60% year-over-year revenue growth -

VANCOUVER, April 30 /CNW/ - VersaPay Corporation (TSXV: VPY) ("VersaPay" or the "Company"), a provider of merchant credit, debit, gift and loyalty card payment processing solutions, today announced its financial and operational results for the 12-month period ended December 31, 2009. All amounts are reported in Canadian dollars unless otherwise stated.

    
    2009 Operational Highlights

    -  Grew number of merchant customers 100% from 1,185 in 2008 to 2,370 in
       2009
    -  Increased total gross transaction value processed 75% from $231
       million in 2008 to $404 million in 2009
       -  Monthly gross transaction value processed was $42 million for
          December 2009
    -  Named "Fastest Growing Company" on PROFIT magazine's 2009 Hot 50 list
    -  Named "Top Emerging Growth Company" by PROFIT magazine
    

"We are very pleased with the financial and operational progress we made in 2009, all of which culminated in our $3.5 million financing and public listing, completed immediately subsequent to year-end," said Michael Gokturk, CEO VersaPay. "Driven by the success of our sales force, the strengthening of our brand and our ability to effectively leverage our channel partnerships, we significantly grew our number of merchant customers and recurring revenue base. As a result, total revenue increased 63%. During the year, we also invested in the business to establish the necessary infrastructure, in terms of people, partnerships, technology and cross-Canada reach, to support our long-term growth."

    
             2009 Financial Summary(1)
            ----------------------------------------------------
                                            2009           2008
            ----------------------------------------------------
             Revenue                       $8.4M          $5.2M
            ----------------------------------------------------
             Recurring revenue(2)          $7.5M          $3.7M
            ----------------------------------------------------
             Expenses                      $9.8M          $7.2M
            ----------------------------------------------------
             Adjusted EBITDA(3)          $(0.9)M        $(0.8)M
            ----------------------------------------------------
             Net income                  $(1.4)M        $(2.0)M
            ----------------------------------------------------
             Net income per share        $(0.15)        $(0.26)
            ----------------------------------------------------
             Cash and cash equivalents     $0.2M          $0.3M
            ----------------------------------------------------
    

Mr. Gokturk continued: "There are currently an estimated 700,000 merchants in Canada, representing approximately $350 billion in gross credit and debit card transactions processed annually. Our success to date demonstrates that a large proportion of these merchants are seeking more cost-effective, reliable, end-to-end payment processing solutions. In 2010, we plan to leverage the investments we have made in the business to drive continued growth. We will work to extend our reach into new industry segments, continue to penetrate the Canadian market and launch new products to enhance our suite of payment processing solutions."

    
    1   A complete set of financial statements and notes for the 12-month
        period ended December 31, 2009 will be available on the Company's
        website at www.versapay.com and on SEDAR.
    2   Defined as Transaction processing fees + VersaCard/EFT fees
    3   Adjusted EBITDA defined as Earnings Before Interest, Taxes,
        Depreciation, Amortization and Stock-based compensation. See table A.

    Table A
    ------------------------------------------------------------------
                                                   2009           2008
    ------------------------------------------------------------------
    Adjusted EBITDA                          $(881,157)     $(847,237)
    ------------------------------------------------------------------
    Interest expense                          $(31,527)      $(18,219)
    ------------------------------------------------------------------
    Amortization                             $(106,793)      $(76,233)
    ------------------------------------------------------------------
    Stock-based compensation                 $(333,357)   $(1,088,994)
                                           ---------------------------
    ------------------------------------------------------------------
    Loss before non-controlling interest   $(1,352,834)   $(2,030,683)
    ------------------------------------------------------------------
    

About VersaPay

VersaPay's financial technology enables businesses and consumers across Canada to accept and process credit, debit and gift card transactions. As a payment services and financial technology company serving more than 2,500 Canadian businesses, VersaPay, in conjunction with its partners, provides the hardware, technology, infrastructure and support services that businesses of all types require to accept and process electronic payments from their consumers and clients.

While its core business is payment processing services, VersaPay also provides enhanced financial technology solutions such as VersaEFT - the Company's proprietary Electronic Bill Presentment and Payment solution - which enables merchants and consumers to easily transact with one another.

The Company was recognized by PROFIT Magazine as Canada's Top Emerging Growth Company and was ranked Number 1 in Canada on the 2009 HOT 50 List. VersaPay is headquartered in Vancouver, Canada and has operations in Toronto and Montreal. To learn more about VersaPay, visit http://www.versapay.com.

Forward Looking and Other Cautionary Statements

This news release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company's current expectations. When used in this news release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology, are intended to identify forward-looking statements and information. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks relating 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 are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward looking statements if these beliefs, estimates and opinions or other circumstances should change.

Investors are cautioned against attributing undue certainty to forward-looking statements. There are a number of important factors that could cause the Company's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others, risks related to following: the Company's financial position and the potential need for future financings, the ability of the Company to maintain its relationship with its strategic partner for payment processing, the efforts and abilities of the senior management team, the ability of the Company to attract and retain skilled management, competition in the payment processing industry, and the Company's ability to respond to technological change and protect its intellectual property rights.

The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. There can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE SECURITIES LEGISLATION.

Neither 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.

%SEDAR: 00029483E

For further information: Bill McGill, CFO, VersaPay Corporation, [email protected], [phone]; Kristen Dickson, Investor Relations, The Equicom Group, [email protected], [phone] ext. 273