Versapay Corp - Ordinary Shares VPYYF

RE:Thoughts on Timing and Amount of Bought Deal…

[Trelawny]

Darkhorse,
I think you should look at it in a slightly different way. A bought deal means that the dealer is confident that they can sell the whole deal - and a bought deal means that they are putting their own capital at risk. This was not a marketed deal, nor a best-efforts deal - those show little confidence from the dealer that they think the deal can get done. A bought deal means the broker is confident that it can be sold and they are willing to put their own capital at risk.

With regards to size - this is only a small company, so raising more would just mean unnecessary dilution for the current shareholders. What is important is the key shareholders (Us, StableView, for example) all participated for equal or more than their current % of ownership. Further, the Board Members and management all participated. That is a very strong endorsement of the company.

Further, there is strong belief that this money will accelerate growth and will bring them to cash-flow breakeven in the next 24 months. Which means they need not do another raise. This removes capital markets restraints from the stock price.

My belief is that this company is very much at the inflection point, and so do the insiders as evidenced by the participation by management and Board of Directors in the capital raise.

The major issue regarding share price is that one large broker from Calgary has been selling because it was one of his few holdings that wasn't underwater and where his clients coudl find liquidity on a stock that wasn't down 60% or more given the collapse in oil prices. 

My anticipation that the selling pressure will soon dissipate and the share price can begin an updward trajectory.

Finally, the business is doing exceptionally evidenced by the market adoption. I also believe that the Press Release about Newscycle as a client - it was misunderstood by the market and lost in the announcement of the bought deal. Go look at https://www.newscyclesolutions.com/

They are a large ERP vendor to the Media industry - with over 750 clients some who send out hundreds of thousands of bills every month. This could morph into a sales channel and would bring in a lot of potential new clients and would materially accelerate the growth of this company.

So you have all key drivers going, market dynamics with a key seller drying up, no more capital raises need for the foreseeable future and a business that is starting to show exponential growth.



Best regards,


Colin Fisher, President and Portfolio Manager, StableView Asset Management