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INVESTOR DECK June 2018
We manage payments for people
uptempo.net
Forward looking statements Statements included in this presentation that do not relate to present or historical conditions are “forward looking statements”. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, or “continue”, or the negative of these terms or other comparable terminology. Forward-looking information presented in such statements or disclosures may, among other
things, include: the potential of our products, including its potential for success with women; forecasts of expenditures; the sources of financing; expectations regarding our ability to raise capital; our business outlook; plans and objectives of management for future operations; and anticipated financial performance. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to our Company, including information
obtained from third-party industry analysts and other third party sources. In some instances, material assumptions and factors are presented or discussed elsewhere in this presentation in connection with the statements or disclosure containing the forward-looking information. You are cautioned that the following list of material factors and assumptions is not exhaustive. The factors and assumptions include, but are not limited to: no unforeseen
changes in the legislative and operating framework for the business of our Company; a stable competitive environment; and no significant event occurring outside the ordinary course of business such as a natural disaster or other calamity. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, which may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.
2
The problem
3
US consumer debt is at an all time high
$1.2 trillion
Unprecedented debt creates a high risk scenario for both the consumer and the lender. • Consumers are
stretched often resulting in payment delinquencies and an inability to save
• Lenders experience increased default and loss rates
$12.8 trillion
$8.7 trillion
$784 billion
Total consumer debt is a record high. The prior peak was $12.7 trillion in the financial crisis of 2008.
$1.3 trillion
NextSlideuptempoSolu0ons
Uptempo solution Uptempo provides a payment concierge service for consumers that re-sequences loan payments to a more frequent payment
structure that is aligned with consumers’ cash flow.
This is accomplished without taking Balance Sheet or Loan ‘Risk’.
4
Consumer Benefits• Convenient tool to
simplify and manage payments
• Results in fewer missed payments or late fees
• Improves credit performance
• Enables consumer to shorten amortization and save on financing fees
Lender Benefits• Reduces delinquency
rates for existing lenders
• Increases fee income for our bank partners
Significant improvement in loan performance using the Uptempo platform
NextSlideBenefits
Increase fee income
Find customers
Benefits to customers and lenders
5
For Banks and Lenders
For Consumers
Build deposits
Provide access to lenders
Improve credit
Reduce late fees
Manage debts
Provide Data Access
Provide Data Ownership
Data The underpinning of our offerings
$
Decrease delinquency
and risk
Improve brand equity
AprofitableUSbasedFintechready
toignite.
NextSlideDealerBenefits
Significant value to automotive dealers
6
• Every consumer needs a car to get to work in the US, therefore the market is very close to 100% approval, however the rates can be very high.
• Dealers want the vehicles to be in positive equity faster, leading to a sale sooner and also leading to lower payments for the consumer if they have maintained good payment history on their current vehicle, through Uptempo.
FinanceVehicle
PaymentsthroughUptempo
Buybackvehicleandsellnewvehicle6-12
monthssooner
TermEquity
TermEquity
60monthterm54months
WithoutUptempo
WithUptempo
Posi0veequityaveraging6monthssooner
Dealercannowtargetanewsalesooner
NextSlide5KeyTakeaways
5 key takeaways
7
1
2
3
4
5
Proven platform
Significant Consumer Benefits
Significant Dealer Benefits
Significant Lender Benefits
Significant Scale
North American rollout will dramatically increase income
Driving better payment performance and faster payoff of loans.
Earlier upsell opportunity through generation of positive equity and improving payment history
Reduce delinquencies helps improve pricing and risk profiles for loans
Under 40 employees powered by technology delivers significant revenue growth
Withthesupportofcapitalmarkets,otherconsumerplaPormsexistforacquisi0ontherebygrowingfasteracrossNorthAmerica
NextSlideEvidenceofSuccess
Proven success As of Q4 2017 (US$)
8
$7 MMRevenue
$1.2 MMEBITDA
$400+ MM
42,000+consumers using the service
$4+ MMdeposited with our banking partners every two weeks for set payments to lenders
NY, NJ, PAcurrent market base
140+auto dealership partners
350+lending partners
outstanding loan balances processed on behalf of consumers
0.50% vs. 1.46%Delinquency with Uptempo versus national average
NextSlideBusinessModel
Business model
9
Current focus – auto loans
2. Payments are collected from consumers where Uptempo acts as an intermediary and holds cash with FDIC insured bank partners.
Payor Payee Intermediary
Consumer Lender
3. Payments are then released per consumer-defined payment schedule. (Remittances are sent via ACH (electronic funds transfer) or cheque from bank partners with all relevant account detail.)
1. Uptempo develops a new payment schema for consumers that is customized to their personal cash flow needs.
4. An immutable (blockchain) record of all outstanding balances, amortizations, payment history and fees is housed with Uptempo to be leveraged for data mining and data monetization benefits.
Uptempo Bank Partners
UptempoData
Uptempo
NextSlideHowitworks
How it works
10
Current focus – auto loans
Step One
Step Two
Step Three
Step Four
Step Five
Step Six
1
2
3
4
5
6
Consumer acquires a car
Payment disintermediation
occurs
Restructured cash sweeps occur using pre-paid card network and partner bank balance
sheets
Financial data is housed by Uptempo for data mining
and future upsell
PROBLEMAll loans are set on a
fixed payment date for APR and delinquency
disclosures
SOLUTIONDealer offers Uptempo payment concierge and
consumer subscribes
~$400per auto customer paid over 6 months
REVENUEOne time sign up fee
shared with auto dealership
$1.95per auto payment processed for ~
$4.00 / month / auto customer
REVENUERecurring transaction
fees
Consumer improves payment history, reduces amortization,
pays loans on time
NextSlideConsumerExperience
Consumer experience – automotive
MARCH S M T W T F S
25 26 27 28 1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31
1 2 3 4 5 6 7 30
$450
MARCH
9$113
MARCH
16$113
MARCH
23$113
MARCH
Uptempo enables consumers to set their own payment schema to best suit their cash flow needs.
Uptempo expedites the total payment amount to the lender on the normally scheduled payment date.
30$113
MARCH
11
NextSlideGrowthPlan
Three phase growth plan
12
1
Establish platform and scale with cash infusion
PHASE
Ignite earnings through loan cross-sell and
customer acquisitions
Supercharge growth with bank/lender embedded
partnerships
2PHASE
3PHASE
2018 2019 2019
NextSlidePhase1Details
Growth focus
13
Phase 1
Marketing Channel expansion
• Auto loans Expand auto dealer penetration geographically across the United States
• Student loans Partner with student loan providers
• Mortgage Partner with regional banks
• Cross-sell Target existing customers for retention and cross sell of other channel offerings
Technology
• Blockchain as a platform Build a NEO based internal blockchain for accumulating financial data for future data mining benefits including evidencing credit performance for lenders.
• Launch consumer facing app Build consumer facing app as a tool to stay connected with consumers by providing transaction records and to add other loans with relative ease
Add sales resources in other
states.
Dramatically increase volume and customer
additions.
Increase monthly revenue per
customer from $4 to $10-$15 by servicing more loans for them
NextSlidePhase1Market
Market potential
14
Phase 1
Current penetration of .025% (20 million market size)
Immediate target (4.5 million market size)
There are 90 million consumers within the assumed target
market of hourly paid workers across the U.S.
90 million
CustomersBased on a conservative 0.25% target market penetration across most states. Over 40,000 customers today and growing by >2% monthly with no investment
hourly workers in the U.S.
42,15052,543
88,150
143,869
234,808
2017 2018 2019 2020 2021
Withacquisi@ons2021canbe2019adding200,000consumersper
annum
CustomerCountAccelera0onthroughTransac0on
NextSlidePhase12019Projec0on
2019 picture (with transactions) Phase 1 (US$)
15
234,000+consumer customers adding 240,000 annually
$40 MMdeposited with our banking partners every two weeks for set payments to lenders
US nationwidemarket base
~$60 MMRevenue
+$8.0 MMEBITDA
$2.7 Boutstanding loan balances processed on behalf of consumers
Adding20,000consumerspermonthdriveshighenrollmentandrecurringfee’sbeyondanyofour
forecasts.
NextSlidePhase2
LeveragingDatatoUpsellLoans
Leveraging consumer payment performance data
16
Phase 2 – Upselling loans (off balance sheet – funded and serviced by lenders)
• Using data mining and machine learning, data captured in the blockchain reveals patterns of behaviors based on consumer characteristics (ie: loan amounts, balances, interest rates, term, amortization, propensity to pay, difficult weeks for payments)
• We will know who is in positive equity on a vehicle and when they are likely to borrow next. We will present these consumers to lenders to bid and take a fee for closed loans. Lenders have expressed interest in this tried and true origination technique
Additional revenue channel with lenders paying an average fee of 4% of loan
value for each loan funded
Average of $10,000 per loan x 10,000 sales x 4% = $4MM EBITDA incremental to phase 1 estimates for 2019
NextSlidePhase3AddingBankLenderRela0onships
Why will banks and lenders work with us?
• Allows consumers to re-arrange their payments to their cash cycle reducing NSFs – why?
• Once a lending contract is signed it cannot be changed. Lenders have APR/Cost of Money disclosures that are based on the loan advance date and without ‘breaking’ the loan the deal cannot be changed. In ‘flight’ contracts are even more difficult to change.
• That loan advance date (and each payment cycle there after) is often inconvenient for the consumers cash flow and causes NSFs and losses to lenders – one missed payment leads to a slippery slope of many missed payments as consumers struggle to ‘catch up’.
• All lender reported treasury metrics are based on that ‘loan’ advance date and if the loan is securitized (most are) it is even more difficult for a lender to change that loan payment without buying it back from their funder (for penalties) and then issuing a new loan.
• We move deposits back onto banks balance sheets and they charge us fee’s to submit payments on our behalf significantly increasing FEE income in their lending portfolio’s.
17
NextSlidePhase3LendingDelinquency
IssuesPhase 3 – Embedding our service into lender loans at source.
• Reduce cost: more efficient loan process; reduce administration cost (from checks to ACH records)
• Reduce risk: reduces delinquency rates; better loan pool performance and less need to build risk into pricing
• Improve credit quality: more data means better loan application assessment
18
Lending delinquency issues
The working example: • Industry delinquency rate has been
climbing with longer loan terms
• Uptempo average delinquency rate of 0.5% is well below the industry average of 1.46%
• uptempo: - First line of defense for consumer in trying to prevent a delinquency
- Improves delinquency rate for finance company
- Shortens loan terms
Significant improvement in loan performance using the Uptempo platform
NextSlidePhase3CarLoanDelinquencyis
up
Car loans specifically….
0%
20%
40%
60%
80%
100%
Q3 2017
% of Vehicles with Financing
New Used
• Delinquency rate is up
• Auto loan terms getting longer: from 60 months to 75 months
Source: Experian
$1.2 trillion
• Auto loan market growth: 8% YOY
• Lender makes decisions based on good data and experience
• Average credit score: • For new vehicle 716 • For used vehicle 659
21% are sub-prime loans Source: Experian
Source: Improving Fundamentals in Auto Loan Market, 2017
NextSlidePhase3Lenderswepaytoday
We already pay over 340 lenders today! Top lenders are our current targets
Well over 37 LARGE targets already receiving payments from us. We have commenced strategic discussions with several lenders for our embedded payment curation platform experience.
Hundreds of smaller payee’s in our database (340+)
NextSlidePhase3ourcustomer
loca0onswithoneofourbanks
Weexpecttoembedoursolu@onintonewloans‘atsource’withinthelendersloan,receive
paymentforourservicesfromthelenders,andhavethelendersofferitatnocosttoconsumersaspartofeachloanasamethodforlenderstoreducedelinquenciesandreducecapitalatrisk.
Embedded lender offering economics Blue Sky Opportunity – In discussion with lenders ‘now’
• Uptempo is in discussions with several of the banks and lenders it pays today and there is a growing appetite to embed our services in their loans to improve delinquency and reduce their selling price of money.
• Scenario A cash flow assumes service fee’s are paid up front to uptempo as an indirect cost (IDC) for the loan. Scenario B assumes income and cash earned over time.
• uptempo has secured an ex-Risk VP from Wells Fargo to exclusively focus on developing these channels.
21
NextSlidePhase3TimingofBank/Lender
wins
Any one win could cause material positive revenue and earnings momentum
Bank / lender partnerships timing
22
• We expect to have our lenders embed the service in each loan because it improves their credit quality.• This manifests as a ‘free’ service to consumers paid for by the lender as an amortized cost ‘into the loan’ which is offset by
reduced delinquency and loss rates – with no impact to their net interest margin.• We believe lenders can reduce their fee for the consumer in addition to paying us our fee.• This gives us access to Millions of lender customers with no acquisition cost.
Supercharge earnings and growth
Shop the services to banks and lenders and close
Architect the links to lender systems to receive new customers
LedbyourCEOandVPLendersandBanks,ex-Wells
FargoRiskVP.
Inprocessaspartofoursystemsupgrade
Win1dealin2018onaroundIPO0meline,addothers
through2019+
NextSlidePhase3AddingTogethertheNumbers
Three phased investment strategy
23
1 CLOSED February 2018
Up to $500,000 CDN bridgeAttractive Terms90 days
1. Conclude consolidation of US companies and assets to prepare for equity raise.
2. Provide interim liquidity to push originations up.
2 Closing May & June 2018
Up to $4,000,000 CDN equity raise (Private)Pricing $.47/share
1. Build out leadership.2. Expand marketing and sales.3. Conclude 1-2 transactions
with originators.4. Build out consumer APP and
establish NEO blockchain platform
5. Test digital marketing strategy6. Add regional banks.
3 Closing Q4 2018
Potential Go publicTwo Shell’s identified.
Building backlog of news flow, wins and earnings.
NextSlideInvestmentStructure
Post closing capital structure
24
Management78%
NewMoney(PostRaise)
15%
StockOp@ons7%
Management 42,986,623NewMoney(PostRaise) 8,510,638StockOptions 3,800,000FullyDiluted(excludingbrokerwarrants) 55,297,262
• The company current has no conver0ble debt orpreferredsharesissuedandoutstanding.
• NewMoneyat$4.0MMCDNat$.47
Uptempo Inc. share offering
Contact the Company for Details.
Jason Ewart Head of Capital Markets: [email protected].
25
NextSlideCapitalStructure
Appendix Leadership
Board of directors
27
Complete board names and bios will be revealed shortly
Banking ExecutivePlanned appointment Retired Head of Global Operations Canadian Bank
Wall Street ExecutivePlanned appointment
Legal and Regulatory ExecutivePlanned appointment
Michael A. HilmerChairman and Chief Executive Officer
Jason EwartDirector and Executive Vice President, Capital Markets
FinTech Executive Planned appointment
Management team
28
Michael HilmerChairman and Chief Executive Officer
Robert ParentChief Financial Officer
Chris CicoliniChief Operating Officer
As Chief Operating Officer, Mr. Cicolini brings years of experience in developing technology operations for start-ups, turnarounds and rapidly growing companies. Prior to joining Uptempo, Mr. Cicolini was Managing Director for JV Holdings LLC, a investment firm focused on mobile and financial technology, and was the founder of Spartan Interactive LLC, a mobile platform company. He also played an active role in the financing and operating of The Card Collaborative International (TCCI). Previously, Chris served as EVP of Operations for United Payroll Systems, LLC, a prepaid financial services and payment in company, where he spearheaded the development of a middleware platform that allowed the use of multiple banks and processors through a single platform. Earlier in his career, Mr. Cicolini was responsible for Mergers and Acquisitions in the Telecommunications and Prepaid Financial space for Draper Holdings Business Trust. Mr. Cicolini is a graduate of the University of Maryland College Park.
As Chairman and Chief Executive Officer, Michael brings 30 years of banking, technology, fintech and lending experience to the company. Having raised over $1 B for recent ventures that became dominant market players within 2 years of launch, Mr. Hilmer understands the governance, discipline and relationships that come together in a rapidly scaling environment. Mr. Hilmer’s open banking vision is underpinned by the fundamental belief that new regulations create more opportunity for innovation around the customer experience. The value of data collected through the experience will be returned back to the consumer for the first time in their historical banking history, and the benefits of their transactional data history will result in lower consumer banking and borrowing costs over time. Partnering with banks to increase their deposits and fees, while taking responsibility for the consumer experience through innovative and valuable toolsets, provides for unique consumer experiences the market has never seen before.
As Chief Financial Officer, Mr. Parent guides Uptempo’s financial and capitalization strategy, and leads the firm’s governance, reporting and analysis functions. Mr. Parent has extensive background as a senior executive in financial company operations and retail banking, savings and investment products and services that help customers become financially independent. He worked as a senior product manager with Scotiabank where he was responsible for project scope, budget, schedule and objectives for a number of high profile projects and marketing campaigns for retail banking products: “SCENE”, Canada’s first loyalty rewards program; the development and launch of the Tax Free Savings Account (TFSA); “Let the Savings Begin” program; the “Bank the Rest” savings program; the “Fly Free with Scotia One”; and tele-banking account open options. He also served the role of high net worth investment advisor within the bank for some of Canada’s wealthiest individuals. Mr. Parent holds an MBA from Queen's University. He has 6 years of Ph.D. work in computational physics and M.Sc. in laser physics from University of Ottawa. He also has a B.Sc. in Mathematics and Physics from University of New Brunswick; and a diploma in Space Science from the International Space University.
Management team
29
Jason EwartExecutive Vice President, Capital Markets
Mike TrimarcoExecutive Vice President, Corporate Development
Shawn CardenSenior Vice President, Compliance & Risk
As Senior Vice President of Compliance, Mr. Carden brings over 17 years of senior management experience including building compliance teams, custom back office operations, customer cash settlement operations, reconciliation teams and customer support teams. Shawn manages all regulatory and compliance execution matters and is the final approver and products and consumer solutions being released. Previously, Mr. Carden served as Founder and President of TCCI (The Card Collaborative International). Throughout his career, Mr. Carden has held senior leadership roles at MasterCard International, NetSpend, Central Bank of Kansas City, Electronic Funds Source, LLC, MetLife, and Citi Home Mortgage. Mr. Carden is a FinCEN roundtable participant on various settlement and reconciliation issues.
Mr. Ewart is a corporate director who was the co-founder and the former Chief Executive Officer and Chief Operating Officer of Fountain Asset Corporation from 2003 until October 2017. Previously, he was a market analyst with A&E Capital Funding Inc. and Bradstone Equity Partners Inc. between 1998 and 2002 and Vice President of Quest Investment Corporation between 2002 and 2003. He has experience with bridge financing, financial analysis, quantitative modeling, equities trading and mergers and acquisitions. Mr. Ewart holds an economics degree from McGill University. Mr. Ewart is a member of the Institute of Corporate Directors (ICD) in Canada and a Director for the non-profit Northumberland Community Futures Development Corporation, which provides financing and strategic guidance to entrepreneurs. As EVP, Corporate Development for Uptempo, Mr. Ewart leads the transaction/deal team working with management to evaluate strategic opportunities and acquisitions.
As Executive Vice President of Strategy and Business Development, Mr. Trimarco brings 25 years of banking and fintech experience to the company. He was the original founder of Uptempo’s core payment management business, providing capital and expertise to launch the enterprise in 2006. Previously, he has held positions with GE Capital and Lehman Brothers where he led the charge on financial engineering of complex structures while utilizing cutting-edge technology. He also applied his financial expertise in successful securitizations and tax arbitrage/derivative structures. Additionally, as one of the first few employees at IPREO, Mr. Trimarco identified key areas of opportunity for the company to build out its technology foundation that is now the standard platform that most equity and debt issues in the US now run on today. Using proprietary finance operations and marketing technology platforms, Mr. Trimarco has further leveraged his skills in finance and technology as founder of two of the largest US distributors of telecommunication/TV, which he successfully built out and sold. Mr. Trimarco is a board member of Clover Fund Solutions and holds a BS in Economics from Cornell and an MBA from Harvard University.
Management team
30
Patrick FergusonVice President, Technology
Lynda CarrollVice President, Marketing
Ms. Carroll is a seasoned marketing and communications professional with a background in helping transform companies through periods of high growth or change. Her areas of specialization include corporate branding, rebranding and communications during company acquisitions and integrations, corporate and vertical level marketing, pr and media relations and investor relations support. Ms. Carroll has held the positions of Vice President, Corporate Marketing and Communications for ECN Capital; Vice President, Corporate Marketing and Communications for Element Financial; Vice President Corporate Marketing for Newcourt Credit Group; and Managing Director for Altius Marketing. Ms. Carroll holds an Honours B.Sc degree in Marketing and Communications from Canisius College University.
As Vice President of Technology, Mr. Ferguson brings a 20+ year career highlighted by delivering stable, scalable solutions in the telecom, financial and gaming industries. Mr. Ferguson is a veteran system architect, designer and software developer with a strong talent for identifying and implementing innovative technology solutions that align with the business objectives and corporate goals. Prior to joining Uptempo, Mr. Ferguson operated a successful consulting business developing SAAS and PAAS infrastructures for gaming, entertainment, fintech and telecom companies. Earlier in his career, Mr. Ferguson was both CTO and CIO for subsidiaries of Draper Holdings Business Trust, where we created and managed systems that acquired 100,000+ ISP customers. In 2004, Mr. Ferguson developed a VoIP platform managing international voice traffic that received a valuation of $33M just four years after inception. He’s also led the development of other telecom platforms that still route voice traffic of over 1 billion minutes a month. More recently, Mr. Ferguson has built blockchain networks on NEO, Ethereum and BitCoin. Patrick Ferguson has also been both Cisco Network and Xamarin Mobile Developer certified.
Helen ChingVice President, Products and User Experience
As Vice President of Products and User Experience, Ms. Ching brings years of technology expertise and her experience has spanned a wide range of industries, including fintech, publishing, media and entertainment, non-profit, email marketing, and live chat. She is a well-rounded technology and business executive, and has held positions in product management, client success, marketing, business development, and technology strategy. Prior to joining Uptempo, Ms. Ching held the positions of Vice President, Product Management for Bamboo Cricket; Vice President, Client Services and Vice President, Marketing for Digital Connexxions; Director of Marketing and Product Manager for Spectra Securities, and worked with a number of financial companies such as TD GreenLine, Royal Bank, and CIBC. Ms. Ching holds a B.A.Sc. degree from the University of Toronto, is a Professional Engineer, and holds an MBA from the Lazaridis School of Business & Economics at Wilfrid Laurier University.
Thank you