VersaPay Corporation Closes $4.84 Million Bought-Deal Financing

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TORONTO, May 7, 2015 /CNW/ - VersaPay Corporation (TSXV: VPY) ("VersaPay" or the "Company"), a leading provider of cloud-based payment solutions, is pleased to announce that it has closed its previously announced bought-deal private placement (the "Offering") for gross proceeds of $4,840,001.60.

A syndicate of underwriters (the "Underwriters") led by Haywood Securities Inc. and including Cormark Securities Inc. completed the Offering of 3,457,144 units of the Company ("Units") at a price of $1.40 per Unit (the "Issue Price"). Each Unit is comprised of one common share of the Company (each, a "Common Share") and one-half (1/2) of one Common Share purchase warrant (each whole Common Share purchase warrant, a "Warrant"). Each Warrant will be exercisable to acquire an additional Common Share (a "Warrant Share") at an exercise price of $2.00 per Warrant Share for a period of 24 months following the closing of the Offering. The expiry date of the Warrants may be accelerated by VersaPay at any time following the six-month anniversary of the closing of the Offering and prior to the expiry date of the Warrants if the volume-weighted average trading price of the Common Shares is greater than $2.50 for any 20 consecutive trading days, at which time the Company may accelerate the expiry date of the Warrants by issuing a press release announcing the reduced term of the Warrants whereupon the Warrants will expire on the 20th calendar day after the date of such press release.

In consideration for their services, the Underwriters will receive a cash commission equal to 6.0% of the gross proceeds of the Offering, and such number of compensation options ("Compensation Options") equal to 6.0% of the aggregate number of Units issued pursuant to the Offering. Each Compensation Option is exercisable for one Unit at the Issue Price for a period of 24 months from closing of the Offering.

The Company is pleased to announce the participation of new and existing retail and institutional investors, led by StableView Asset Management Inc.

The Offering remains subject to final approval of the TSX Venture Exchange. All securities issued and issuable in connection with the Offering are subject to a statutory hold period expiring on September 8, 2015.

The net proceeds from the Offering will be used to fund working capital and general corporate purposes.

These securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "US Securities Act"), or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, transferred or delivered, directly or indirectly, within the United States or to or on behalf of a U.S. person (as defined in Regulation S under the US Securities Act). Resales of these securities acquired by any U.S. person in the secondary market may be made only pursuant to Rule 904 under Regulation S, or pursuant to another exemption from the registration requirements of the US Securities Act.

About VersaPay

VersaPay is a leading cloud-based invoice presentment and payment provider for businesses of all sizes. VersaPay's ARC™ software-as-a-service offering allows businesses to easily deliver customized electronic invoices to their customers, to accept credit card and EFT payments and automatically reconcile payments to their ERP and accounting software. VersaPay is headquartered in Toronto, Canada and also has operations in Montreal and New York.

More information about VersaPay can be found on the Company's website at www.versapay.com or under the Company's profile on SEDAR at www.sedar.com.

Forward-Looking and other Cautionary Statements

This news release contains forward-looking statements and information, including statements relating to the use of proceeds of the Offering, 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, except as may be required by applicable securities laws.

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.

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 VersaPay Corporation

For further information: David CW Chan, Chief Financial Officer, VersaPay Corporation, 647-258-9475, [email protected]; Babak Pedram, Investor Relations, Virtus Advisory Group Inc., 416-644-5081, [email protected]