Closed $3 million CAD Financing to Pursue Growth Strategy
VANCOUVER, Aug. 28, 2018 /CNW/ - Katipult Technology Corp. ("Katipult" or the "Company"), an industry leading and award winning fintech company, is pleased to announce its second quarter (Q2) financial results for the period ended June 30, 2018.
"This quarter was centered around putting the necessary infrastructure in place to ensure that we maintain a sustainable business that is focused on growth," said Brock Murray, CEO of Katipult. "We continued to add new clients during Q2 and expect to see increased subscription revenues as many of them go live over the remainder of this year. In addition, we have started the deploy the strategic investment received from our new convertible debenture investors including our newest Board member; securing this investment has been a critical milestone to ensure we have a strong cash position to aggressively execute our sales and marketing roadmap. We are highly optimistic about the global opportunities for Katipult, and the necessary steps taken this quarter, including the pilot of our blockchain-based secondary trading solution, will be critical to our success moving forward."
"Transitioning to a sales-driven organization requires a foundation to be put in place and we feel we made great early strides during this quarter, including the recruitment of talent and the implementation of stronger processes and controls. With these endeavors behind us, we're excited to accelerate our sales and marketing efforts," added Karim Teja, CFO of Katipult.
Financial Highlights – Second Quarter 2018
- As at June 30, 2018, the Company's cash balance of $3.24 million compared to $0.34 million as at December 31, 2017.
- Total revenue for quarter ended June 30, 2018 decreased by 4% to $0.33 million, compared to $0.34 million for the quarter ended June 30, 2017. Total revenue for the six months ended June 30, 2018 increased 16% to $0.64 million compared to $0.55 million for the same period in 2017.
- Subscription revenue for the quarter ended June 30, 2018 decreased by 12% to $0.14 million, compared to $0.16 million for the quarter ended June 30, 2017. Subscription revenue for the six months ended June 30, 2018 increased 5% to $0.26 million compared to $0.25 million for the same period in 2017. Subscription revenue for the quartered ended June 30, 2018 increased 9% quarter over quarter from 1Q18.
- In Q2 2017 the Corporation booked revenue of $72 thousand which was subsequently deemed uncollectable and written off in Q4 2017, the majority of which was from early Katipult clients reflecting their perpetual licenses payment obligations and which are categorized within subscription fees. Since that time, the Corporation's client base has matured and the Corporation has targeted more established customers and has focused on putting in place processes that mitigate much of this risk in the future, including more robust contracts, timelier follow-up, credit checks where available, and establishing a reserve against revenue for estimated uncollectable invoices. In addition, no new perpetual licenses have been written since 2016. Adjusting for this, Q2 2018 subscription revenues represent a 65% increase over the adjusted Q2 2017 subscription revenues.
- Gross margin for Q2 2018 was $0.24 million or 74% of total revenue compared to $0.26 million or 77% in 2017. Gross margin for the six months ended June 30, 2018 was $0.47 million or 74% compared to $0.40 or 72% for the same period in 2017.
- Total comprehensive loss for the quarter ended June 30, 2018 was $0.60 million, compared to a comprehensive loss of $0.06 million in Q2 2017. Total comprehensive loss for the six months ended June 30, 2018 was $0.85 million compared to $0.09 million for the same period in 2017.
Operational Highlights – 2Q 2018
- Katipult achieved a major milestone and upheld its previously announced timeline of 2Q18 to introduce its secondary market product, which includes capabilities such as issuer buybacks, bulletin boards and auction-based price discovery. Katipult clients will be able to offer tradable securities, introduce smart contracts, and automate clearing and settlement for transactions at a much faster rate, while ensuring both the security of payments and regulatory requirements.
- Announcement of three regulated firms from the Middle East to its client list including a subsidiary of a publicly listed entity on the Abu Dhabi Securities Exchange. One firm is a licensed investment company regulated by the Central Bank of the UAE, the second is a financial services provider regulated by the Dubai Financial Services Authority (DFSA) providing Private Wealth Advisory and Corporate Finance and the third is the Qatar Development Bank
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Cautionary Note Regarding Forward Looking Statements: Certain disclosure in this release, including statements regarding the increased or continued industry interest in the Company's product, converting existing sales interest and pipeline growth into revenue, expanding the sales force, generating new sales opportunities, effectively and efficiently utilizing proceeds from financings constitute forward-looking statements. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that are based on the Company's current beliefs as well as assumptions made by and information currently available to the Company, including, but not limited to, the Company's anticipated cash needs, that the cash available to the Company is as expected, the Company's product will continue to operate as expected, the industry will continue to see value in the Company's product, the Company will be able to recruit talented and experienced sales, support and other individuals required to execute the Company's plans. Although the Company 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 Company is not as expected, the Company's pricing and product offering is no longer relevant, the Company isn't able to recruit the personnel it requires on terms acceptable to the Company, regulatory changes that may require significant rework of the Company's product. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend, 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.