PaySauce Interim Results

1
September
2019
THE HALF-TIME
REPORT

PaySauce Interim Report 2019
21
But we’re not just getting bigger.
We’re developing our product,
our leadership and our culture.
We’re covering more ground, but
also making a deeper impact.
We continue to see considerable
growth in both customer
numbers and revenues.
It’s good
to grow

PaySauce Interim Report 2019
23
2,248
Gold Awards
Finalist
ARPU

Monthly,
at Sept 2019
Regional
Business
Excellence
Awards
Finalist
Churn

% (monthly)
Living Wage
Accredited
Employer
Customer growth
from March 2019
ARR growth
from March 2019
LTV : CAC
Ratio
Customers
At Sept 2019
ARR
At Sept 2019
62
54
$591.3%8:1
1,602,872
Highlights
%
%
$
Explanations and calculations for the SaaS (“Software
as a service”) terms used above are outlined f rom page 10.

PaySauce Interim Report 2019
45
To our shareholders,
We’re proud and excited to
share this update with you
all. The last six months have
flown by, bringing greater
challenges and rewards than
ever. We continue to see surges
in customer numbers, while
making strides in building out
our team and strengthening
our senior leadership. As our
internal structure becomes more
complex, we’ve needed to quickly
become more deliberate with
our policies and processes. This
has introduced the challenge of
keeping our startup spirit intact
as we become a bigger, slicker
operation. I’m happy to say that
we’ve come out the other side
with an even closer and more
collaborative work culture.
While we’ve been taking
a look inwards, we’ve also
sustained exceptional financial
performance. Our growth
speaks for itself, and has
brought increasing interest
and awareness f rom customers
and investors. Our first AGM
in September offered us the
chance to lay out our vision for
our shareholders and invite
their perspectives, as well as
share the very tangible success
we’ve already achieved. It
was a pleasure to meet our
shareholders in person, and
we’d like to once again offer our
thanks for your support and your
confidence.
Sustained growth has fuelled
our ambitions, and during
September, we visited Ireland
and the UK as part of Callaghan
Innovation’s Ireland and UK
Agritech Mission. The trip was
extremely illuminating, offering
us an initial overview of the
competitive landscape and the
current challenges faced by their
agricultural sectors. This was a
valuable opportunity to connect
with other Kiwi innovators and
get a first-hand look at the
potential market.
While we’re very happy with
our commercial and financial
achievements, I’d also like to
highlight a different kind of
success. Our business is all about
people, and we’re proud to share
a few initiatives that reflect those
values. As of September 1st, we
are now an accredited Living
Wage employer. This means
that we’ve demonstrated that
all our staff, contractors and
ongoing sub-contractors are
earning at least $21.15 an hour.
The Living Wage is regularly
reviewed and adjusted to reflect
the cost of living in New Zealand,
and we intend to maintain our
commitment to meeting that
standard. While this is certainly
positive PR, we also feel that
earning this accreditation
demonstrates our commitment
to people and culture.
On a similarly altruistic note,
we’ve just seen the first
implementation of our volunteer
time off policy, Time Present, with
Adi from Marketing lending his
expertise to help plan Student
Volunteer Week 2020. We
look forward to seeing other
employees make use of this
policy as our newest staff reach
the 6-month mark for eligibility.
People are the most important
part of this business, in principle
and in practice. So let me
finish by acknowledging the
extraordinary contributions of
our team, our customers, our
partners and of course, our
shareholders. It’s a privilege to
share this with you.
Yours,
Asantha Wijeyeratne
CEO
On behalf of the board and my
fellow directors, I’m pleased to
present this interim report of our
business and financial results. I’m
confident that readers will find
plenty to be excited about, and
even more to look forward to.
This period has seen us retain
our key priorities while adapting
to emerging opportunities. As
always, relationships are our
driving force and central focus.
In recent months, the team has
forged invaluable partnerships
across the software and financial
spaces, strengthening our
product and our position in
the market. We’re proud to
be aligned with the nation’s
foremost innovators; we’ve
connected with Sharesies to
enable innovative investment,
rolled out a series of educational
initiatives for our accounting
partners alongside CAANZ, and
we’re extremely excited to be
working closely with Xero and
Figured to offer a unified rural
app stack around financial
foresight and cloud-based
compliance. As we become
a more active presence in
the national SaaS ecosystem,
we’re making better use of
the opportunities and support
available for innovative Kiwi
businesses, winning funding
f rom Callaghan Innovation and
recruiting young talent through
Summer of Tech. We were also
honoured to have received
public acknowledgement for
our exceptional growth and
execution, being named as
finalists in both the Gold
Awards and Regional Business
Excellence Awards.
While we continue to grow
locally, we’re also thinking global.
In September, Asantha was part
of Callaghan Innovation’s Ireland
and UK Agritech Mission 2019.
The trip was planned to coincide
with UK Dairy Day and the Irish
Ploughing Champs, the largest
agricultural event in the world.
This was an opportunity to assess
the competitive landscape and
sound out unsolved issues in
this market. We believe that
Ireland and the UK present
significant opportunities to
apply our knowledge of farming
employment and deliver
marked improvements for the
industry. Based on a preliminary
exploration, we believe
New Zealand’s agritech sector
has huge advances to offer to
these markets, and we hope to
lead that charge in partnership
with our nation’s best thinkers
and makers.
This report provides a chance to
review our progress, look forward
and acknowledge our supporters.
As always, I’d like to extend our
warmest thanks to all those
who have pitched in, f rom our
partners and advocates to our
team and board. And of course,
to our shareholders, for keeping
the lights on and the magic
happening. Here’s to the future.
Sincerely,
Andrew Barnes
Director (Non-Independent)/
Chairman
Message
from the CEO
Chairman’s
message

PaySauce Interim Report 2019
67
We encourage consistent
upskilling and skill sharing,
and teaching and exploration
are natural processes in our
workplace. Our internships and
junior hires offer immersive
learning opportunities and rapid
career advancement for those
who show initiative and drive.
As 2019 draws to a close, we’re
proactively upskilling our junior
development team with a
BlackRaven Dojo course, aimed
at building the foundations for
more complex coding work.
From November, we’re taking
on two interns through Summer
of Tech, funded through
Callaghan Innovation. These
internships will offer real-world
experience to the students,
while also developing leadership
skills among our established
team and boosting developer
output.
We’re also putting our culture
into practise by investing in
social good. We are in the
final stages of releasing our
new payroll giving feature,
which enables employees to
effortlessly donate to registered
charities direct f rom their pay
cheque. Our volunteer time off
policy, Time Present, is in active
use. We remain a long-time
sponsor of Wellington’s own 1%
Collective, and as of September
we became a fully accredited
Living Wage employer.
Agriculture is still our core focus,
and will continue to be. As we
set ourselves higher and higher
goals, we’re strengthening our
agri approach by developing
a parallel service offering for
accountants and advisors, with
an emphasis on the rural advisory
space. Our sales team has
developed an extensive network
of accountants and bookkeepers,
and have already won us a
number of vital partnerships in
financial institutions across the
country. This will continue to be a
key emphasis for sales, marketing
and support teams in the coming
months.
Agriculture has been our fastest-
growing customer segment
for some time, and we’re proud
to ally ourselves with farming
employers. We’ve retained our
farm focus across marketing,
product development and
relationship building. So at first,
it came as a surprise when, in
October, we began to see a
much broader base of businesses
coming on board. On closer
inspection, we found that the
overwhelming majority of these
customers, though f rom assorted
industries, were coming f rom
our strongest rural areas. This
is a powerful indicator that our
established word-of-mouth effect
is not only sticking around, but is
now crossing verticals. We intend
to balance our agri focus with
providing exceptional service and
software to these markets as they
develop organically.
Employment in the agri space
is uniquely challenging, which
means that we’ve had to work
hard and think inventively to find
solutions. The payoff, however,
is that those solutions are then
easily applied to similar issues in
other industries.
The Culture
Stuff
The Customer
Stuff
Sam Dews
Sierra Delta Civil

PaySauce Interim Report 2019
89
Christchurch
Wellington
Hawkes Bay
East Cape
Bay of Plenty
Northland
Otago
Southland
Westcoast
Marlborough
Manawatu
Taranaki
Waikato
Auckland
Nelson
15%
7%
3%
1%
5%
4%
4%
11%
1%
1%
5%
4%
22%
16%
1%
Customer
distribution
by region
After many months of planning,
coding and testing, we’ve
unveiled a new onboarding
and sign-up process. This is one
of the most challenging and
problematic parts of payroll,
requiring entry of sensitive
payment and tax information,
“wet” signatures and the manual
transfer of employee records.
We’ve spent many sleepless
nights trying to transform this
into a 21st century customer
experience, and we’re really
happy with the result. The new
process digitises virtually all
initial paperwork, captures on-
screen signatures, and minimises
information gathering at sign-
up. Onboarding 2.0 is smart,
seamless and more secure.
We are also in the process of
adding our second application to
the PaySauce platform, the MBIE
Contract Builder. This will be
f ree to all platform users, which
rewards our payroll customers
for using the platform and
increases the value of our core
offering. The application will
exist on the same f ramework as
the Federated Farmers Contract
Builder, but constructed f rom
content supplied by the Ministry
of Business, Innovation and
Employment.
Like the Federated Farmers
Contract Builder, this tool will
offer a customisable employment
agreement, but with all-purpose
clauses and government-vetted
standards of compliance. This
application is also, of course,
integrated with payroll, allowing
the import of a new hire and all
their associated employment
conditions, ready for payday.
The Tech
Stuff

PaySauce Interim Report 2019
1011
SaaS Reporting
Six months to
30 Sept 2019
Six months to
30 Sept 2018
Processing Fees$507,295$227,847
IRD Subsidy$102,237$75,809
Interest Received$128,362$54,532
Recurring Revenue$737,894$358,188
Cost to Serve($315,509)($139,632)
Gross Margin$422,385$218,556
Gross Margin %57%61%
Other Revenue$161,896$75,000
Total Other Revenue$161,896$75,000
Customer Acquisition($326,711)($142,108)
Research & Development($109,717)($62,000)
General & Administration($845,923)($200,007)
Other Expenses($9,354)($2,335,606)
EBITDA($707,423)($2,446,165)
(96%)(683%)
Depreciation & Amortisation($71,207)($67,040)
Interest Expense($83,398)($1,446)
Income Tax$0$0
Net Loss for the period($862,028)($2,514,651)
Six months to
30 Sept 2019
Six months to
30 Sept 2018
Customers at start of period 1,384 746
Customers at end of period 2,248 1,054
Customer Growth %62%41%
ARR at start of period$1,038,317$498,067
ARR at end of period$1,602,872$777,937
ARR Growth %54%56%
Churn % (monthly average)1.3%2.0%
ARPU at end of period$59$62
CAC (per addition) for the
period
($319)($339)
Customer LTV$2,563$1,836
Total Customer LTV
at end of period
$5,762,406$1,934,738
LTV : CAC Ratio8 : 1 5.4 : 1
Explanations page 12.
The business results reported
below provides an overview of
the performance of the business
in a format that we believe is
useful for readers to assess the
performance of PaySauce as a
SaaS business.
Non-Generally Accepted
Accounting Principles (Non-
GAAP) measures have been
included, and should not
be viewed in isolation, nor
considered as substitutes for
measures reported in accordance
with New Zealand Equivalents to
International Financial Reporting
Standards (NZ IFRS).
For further explanations of the
Non-GAAP measures see page 12.
*Costs relating to the reverse acquisition,
employee bonus share issues were excluded
f rom the EBITDA calculation presented in our
2019 annual report. The comparative 2018
period and current 2019 period now includes
these costs under ‘Other Expenses’ in the
EBITDA calculation presented above. This
change in presentation has been made in
order to provide a full view of the impact on and
reconciliation back to GAAP reported Net Loss
for the period.
SEPT
15
MAR
16
SEPT
16
MAR
17
SEPT
17
MAR
18
SEPT
18
MAR
19
SEPT
19
54%
$1,038,317
$1,602,872
ARR growth
from March 2019
ARR
at March
2019
ARR
at Sept
2019

PaySauce Interim Report 2019
1213
The above categories
are explained below
Processing Fees : This category
represents the revenue
generated f rom customers who
are using the PaySauce payroll
product, paying processing fees
each pay run, based on a flat rate
plus a variable amount based on
the number of payslips in that
pay run. There are no significant
estimates or uncertainty
surrounding the flat and variable
components of processing fees.
Revenue is recognised when the
service is supplied.
IRD Subsidy : This category
represents the revenue
generated f rom the subsidy
provided by Inland Revenue
for payroll intermediaries. The
subsidy provides revenue based
on the number of payslips
processed by PaySauce each
month.
It should be noted that a
threshold was placed on the
subsidy from 1 April 2019, and
now only applies to payslips
of those customers who have
processed less than $50,000 of
PAYE and ESCT for the preceding
financial year. The subsidy will be
completely removed f rom 1 April
2020. Further information on
this can be found on the Inland
Revenue website.
Interest Received : This category
represents the interest received
from our interest-bearing trust
account and term deposits
held in escrow for our Payroll
customers. As customers pay
their PAYE through to us each
pay run, we hold these funds
and generate interest on the
balance before the payment
is due to Inland Revenue. As
interest received on these funds
grows directly in relation to our
customers, we consider this an
additional stream of recurring
revenue.
Cost to Serve : The category
includes those costs which are
related to serving our customers
through the use of our software
products, and the availability
of our customer support team.
Costs included are those such as
hosting expenses for our software
in the cloud, maintenance of our
software products, and customer
support.
Other Revenue : This category
includes revenue that is not
recurring revenue and is not part
of our regular business operating
activities with customers.
Revenue included is that which
relates to sponsorship f rom ASB
Bank, and fair value revaluation
gains.
Customer Acquisition : This
category includes those costs
which are related to acquiring
new customers. Costs included
are those such as sales and
marketing, implementation and
onboarding of customers to our
system, and discounts. These
costs are expensed as incurred as
they do not relate to any specific
customer or contract for services.
Research & Development :
This category includes those
costs which are related to
researching and developing new
solutions and solving problems
for our existing and future
customers. Costs included are
those associated with product
development that do not meet
criteria for capitalisation, the
majority of which are developers’
salaries.
It should be noted that
measuring these costs between
years is not an accurate reflection
of the actual spending on
research and development for
PaySauce. This is due to the
timing and way in which some
of these costs are capitalised
and projects are completed.
The reader should also consider
the amount of intangible assets
recognised during the financial
year. Further detail on this can
be found in the notes to the
financial statements.
General & Administration : This
category captures all of the
other elements of running the
business. Costs included are
those such as office running
costs, finance and administration,
legal expenses, and other
overhead costs.
Other Expenses : This category
captures other expenses such
as costs relating to the reverse
listing process, and bonus shares
issued to employees.
EBITDA : EBITDA (earnings
before interest, tax, depreciation
and amortisation) is calculated
by adding back depreciation,
amortisation, interest
expenditure, and income
tax expense to the amounts
reported in the NZ IFRS-based
financial statements. PaySauce
believes that EBITDA provides
useful insights to measure the
performance of PaySauce as a
SaaS business.
SaaS Metrics
& Definitions
These SaaS metrics are prepared
and defined to provide readers
with useful information about
the performance of PaySauce as
a SaaS business.
Non-Generally Accepted
Accounting Principles (Non-
GAAP) measures have been
included, and should not
be viewed in isolation, nor
considered as substitutes for
measures reported in accordance
with New Zealand Equivalents to
International Financial Reporting
Standards (NZ IFRS).
Recurring Revenue : Recurring
revenue is revenue that is
expected to continue into the
future.

For PaySauce, it is that which is
directly linked to the number of
pays that our customers run on
the PaySauce payroll product.
There are currently three sources
of recurring revenue, those being
processing fees, subsidy, and
interest received.

There is a direct correlation
between the number of
customers processing payroll
with PaySauce, and the amounts
of revenue derived f rom these
streams (allowing some variation
due to elements such as interest
rates and number of payslips per
customer per pay run). There is no
significant estimate or judgement
applied by management when
recognising revenue arising f rom
these streams.
MRR : Monthly recurring
revenue is the total recurring
revenue for the month.
ARR : Annual recurring revenue
is the monthly recurring revenue,
multiplied by 12.
Gross Margin : The gross margin,
when discussed as a SaaS term,
is the recurring revenue of the
business, less the cost to serve
customers. This is often then
expressed as a percentage, where
the gross margin is divided by
the recurring revenue.
Churn (monthly) : Churn is
expressed as a percentage and
is calculated as the number
of cancellations each month
divided by the total number of
customers at the end of that
month.
ARPU : Average revenue per
user is total recurring revenue,
divided by the total customers
processing payroll.
CAC (per addition) : Customer
acquisition cost (per addition)
is the total cost of acquiring
customers for the period, divided
by the number of new customers
processing payroll that were
acquired during the period.
LTV : Lifetime value is the
estimated value of a customer
over its lifetime with PaySauce.
This is calculated by taking the
ARPU multiplied by the gross
margin %, then divided by the
churn %.
Total Customer LTV : Total
customer lifetime value is the
lifetime value multiplied by the
total customers.
LTV:CAC Ratio : This ratio
reflects the return on investment
for customer acquisition. It
is calculated by dividing the
customer acquisition cost (per
addition) by the lifetime value of
a customer.

PaySauce Interim Report 2019
141515
Interim Condensed Consolidated
Financial Statements

The nitty
gritty
For the six months ended 30 September 2019
Interim Condensed Consolidated Financial Statements
Interim Condensed Consolidated Statement of Comprehensive Income 16
Interim Condensed Consolidated Statement of Financial Position 17
Interim Condensed Consolidated Statement of Changes in Equity 19
Interim Condensed Consolidated Statement of Cash Flows 20
Notes to the Interim Condensed Consolidated Financial Statements 21
Company Directory 35

PaySauce Interim Report 2019
1617
Interim Condensed Consolidated
Statement of Comprehensive Income
for the six months ended 30 September 2019

30 Sept 2019
Unaudited
30 Sept 2018
Unaudited

Notes$$
Revenue

Revenue f rom sponsorship -75,000
Processing fees 507,295227,847
Subsidy revenue 102,23775,809
Interest 128,36254,532
Operating revenue14737,894433,188
Other gains / (losses) - net
15
161,896-
Expenses

Depreciation and amortisation
8,9
(71,207)
(67,040)
Hosting expenses(28,213)
(14,169)
Employee expenses
16
(706,831)
(278,541)
Employee bonuses-
(1,554,082)
Other expenses
17
(862,815)
(251,039)
Finance costs
17
(83,398)
(1,446)
Listing costs(9,354)
(781,522)
Total expenses (1,761,818)(2,947,839)
Net loss before income tax (862,028)(2,514,651)
Tax benefit / (expense)--
Net loss for the period (862,028)(2,514,651)
Other comprehensive income --
Total comprehensive loss for the period(862,028)(2,514,651)
Interim Condensed Consolidated
Statement of Financial Position
As at 30 September 2019

30 Sept 2019
Unaudited
31 Mar 2019
Audited
Notes$$
Current assets
Cash and cash equivalents 11,481,5566,313,146
Trade and other receivables
10
811,798145,548
Other current assets

92,91375,000
Prepayments and other short-term assets

113,814120,452
Total current assets 12,500,0816,654,146
Non‑current assets


Property, plant and equipment
8
425,88576,620
Intangible assets
9
412,350296,629
Total non‑current assets 838,235373,249
Total assets 13,338,3167,027,395


Current liabilities

Trade and other payables
11
550,541547,632
Funds held due to customers

11,480,7056,273,862
Employee benefits

83,03658,792
Other liabilities

70,37781,580
Current lease liabilities

25,476-
Interest bearing liabilities

81,61811,668
Total current liabilities 12,291,7536,973,534
The above statement should be read in
conjunction with the accompanying notes.
The above statement should be read in
conjunction with the accompanying notes.

PaySauce Interim Report 2019
1819
Interim Condensed Consolidated
Statement of Financial Position (cont.)
As at 30 September 2019

30 Sept 2019
Unaudited
31 Mar 2019
Audited
Notes$$
Non‑current liabilities
Non-interest bearing liabilities

728,821699,916
Non- current lease liabilities

317,071-
Interest bearing liabilities

8,50514,688
Interest bearing liabilities - convertible note
7
1,514,937
Total non‑current liabilities 2,569,334714,604
Total liabilities 14,861,0877,688,138
Net assets (1,522,771)(660,743)
Equity


Share capital
12
5,508,3395,508,339
Accumulated losses(7,031,110)(6,169,082)
Equity attributable to the owners of the Company (1,522,771)(660,743)
For and on behalf of the Board, who authorised the issue of these interim condensed consolidated financial
statements on 28 November 2019:


28 November 2019
Asantha Wijeyeratne
Chief Executive Officer
Date



28 November 2019
Mandy Simpson
Chair of Audit & Risk
Committee
Date
Interim Condensed Consolidated
Statement of Changes in Equity
for the six months ended 30 September 2019
Attributable to equity holders
of the Company

Contributed
Equity
Accumulated
Losses
Total Equity

Notes$$$
Unaudited
Balance as at 1 April 2019 5,508,339(6,169,082)(660,743)
Comprehensive loss
Net loss for the period-(862,028)(862,028)
Other comprehensive income---
Total comprehensive loss‑(862,028)(862,028)
Balance as at 30 September 20195,508,339(7,031,110)(1,522,771)

Unaudited
Balance as at 1 April 20181,999,977(1,792,582)207,395
Comprehensive loss
Net loss for the period-(2,514,651)(2,514,651)
Other comprehensive income---
Total comprehensive loss‑(2,514,651)(2,514,651)
Transactions with owners
Issue of ordinary shares
12
1,145,000-1,145,000
Share based payment
12
2,054,084-2,054,084
Total transactions with owners3,199,084‑3,199,084
Balance as at 30 September 20185,199,061(4,307,233)891,828
The above statement should be read in
conjunction with the accompanying notes.
The above statement should be read in
conjunction with the accompanying notes.

PaySauce Interim Report 2019
2021
Interim Condensed Consolidated
Statement of Cash Flows
for the six months ended 30 September 2019

30 Sept 2019
Unaudited
30 Sept 2018
Unaudited
Notes$$
Cash flows from / (used in) operating activities

Receipts f rom customers

670,282268,053
Increase in funds held for customers

5,206,8431,129,287
Interest received

97,25651,947
Payments to suppliers and employees

(1,561,923)(604,373)
Taxes paid11,794(14,492)
Interest paid on lease liability(21,678)-
Interest paid(3,894)(1,446)
Net cash from operating activities224,398,680828,976
Cash flows from / (used in) investing activities

Purchases of property, plant and equipment

(43,526)(4,699)
Purchases of intangible assets(146,187)(136,586)
Net cash (used in) investing activities (189,713)(141,285)
Cash flows from / (used in) financing activities

Net proceeds f rom issue of shares and convertible notes773,000528,841
Loan advances199,510(173,260)
Repayments of principal portion of lease liability(7,322)-
Repayments of other borrowings(5,745)(5,351)
Net cash from financing activities 959,443350,230
Net increase in cash and cash equivalents 5,168,4101,037,921
Cash and cash equivalents at the beginning of the period6,313,1463,614,619
Cash and cash equivalents at end of the period11,481,5564,652,540
Notes to the Interim Condensed Consolidated
Financial Statements
for the six months ended 30 September 2019
1. General information
PaySauce Limited (the “Company” or “PaySauce”), is a
limited liability company, domiciled and incorporated
in New Zealand and registered under the Companies
Act 1993.
These interim condensed consolidated financial
statements presented are for PaySauce Limited,
together with its subsidiaries (the “Group”) for the
six months ended 30 September 2019. The financial
statements were authorised for issue in accordance
with a resolution of the Directors on 28 November
2019 and are unaudited.
The Group’s principal activity is to provide payroll
processing solutions to employers in New Zealand.
PaySauce is a for-profit entity listed on the New
Zealand Stock Exchange (“NZX”).
2. Basis of preparation
These unaudited interim condensed consolidated
financial statements for the Group for the six months
ended 30 September 2019 have been prepared in
accordance with New Zealand Generally Accepted
Accounting Practice (“NZ GAAP”) and comply with
the requirements of the New Zealand Equivalent
to International Accounting Standard 34: Interim
Financial Reporting (“NZ IAS 34”), on the assumption
that the Group is a going concern, and should be
read in conjunction with the audited consolidated
financial statements for the Group as at and for the
year ended 31 March 2019.

All significant accounting policies have been applied
on a basis consistent with those used in the audited
consolidated financial statements for the Group for
the year ended 31 March 2019 other than as disclosed
in Note 3 below.

Where presentation has changed in the current
period, comparative amounts have been restated to
align with the current year’s presentation.

There are no seasonality or cyclicality influences on
the results of the Group.

These unaudited interim condensed consolidated
financial statements are presented in New Zealand
Dollars (NZD).
3. Changes in accounting policies
and disclosures
Apart f rom the changes noted below, the unaudited
interim condensed consolidated financial statements
have been prepared using the same accounting
policies and methods of computation as, and
should be read in conjunction with, the financial
statements and related notes included in the audited
consolidated financial statements for the Group for
the year ended 31 March 2019.
a. New standards and interpretations
adopted in the current period
NZ IFRS 16: Leases ‑ impact of adoption
NZ IFRS 16: Leases replaces NZ IAS 17: Leases, and is
effective for annual reporting periods beginning on or
after 1 January 2019. PaySauce has adopted NZ IFRS 16
using the modified retrospective transition approach.
Comparative figures for the year ended 31 March 2019
are not restated, but instead continue to reflect the
accounting policies under NZ IAS 17: Leases. Impacts
of the transition are detailed further in note 6 below.
PaySauce has elected to use the Modified
Retrospective Approach (simplified transition
approach) in adopting NZ IFRS 16. The lease assets
comprise of the head office property lease.
The above statement should be read in
conjunction with the accompanying notes.

PaySauce Interim Report 2019
2223

PaySauce has elected not to reassess whether a
contract is, or contains a lease, at the date of initial
application. Instead, for contracts entered into
before the transition date PaySauce relied upon its
assessment made applying NZ IAS 17 and NZ IFRIC 4.

PaySauce has used the practical expedient of relying
on hindsight for determining the lease term of the
property lease.
PaySauce has elected to measure the right-to-use
asset recognised on adoption for the property lease
equal to the value of the lease liability calculated on
1 April 2019 (see note 8). No restatement of equity is
required as a result.

PaySauce has used the practical expedient of relying
on previous assessments of whether leases are
onerous.

PaySauce has also elected not to recognise right-of-
use assets and lease liabilities for short term leases
(lease term less than 12 months) or leases of low-value
assets under NZ IFRS 16.
4. Additional Accounting Policies
a. Revenue
There are no significant estimates or judgements
surrounding recognition of revenue. Revenue
substantially arises f rom processing fees which
includes both fixed and variable components which
are known as revenue is recognised at the point in
time the service is provided.
b. Leases
The Group leases an office premises and various
pieces of equipment. Lease terms are negotiated on an
individual basis and contain a wide range of different
terms and conditions. These lease agreements do not
impose any covenants, but leased assets may not be
used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and
a corresponding liability at the date at which the
leased asset is available for use by the Group. Each
lease payment is allocated between the liability and
finance cost. The finance cost is charged to profit or
loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of
the liability for each period. The right-of-use asset is
depreciated over the shorter of the asset’s useful life
and the lease term on a straight-line basis.
Assets and liabilities arising f rom a lease are initially
measured on a present value basis. Lease liabilities
include the net present value of the following lease
payments:
• fixed payments (including in-substance fixed
payments), less any lease incentives receivable;
• variable lease payments that are based on an
index or a rate;
• amounts expected to be payable by the lessee
under residual value guarantees;
• the exercise price of a purchase option if the lessee
is reasonably certain to exercise that option, and;
• payment of penalties for terminating the lease, if
the lease term reflects the lessee exercising that
option.
The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be
determined, or the group’s incremental borrowing
rate.
Right-of-use assets are measured at cost, comprising
the following:
• the amount of the initial measurement of lease
liability;
• any lease payments made at or before the
commencement date less any lease incentives
received;
• any initial direct costs, and;
• restoration costs.
Payments associated with short-term leases and
leases of low-value assets are recognised on a straight
line basis as an expense in profit or loss. Short-term
leases are leases with a lease term of 12 months or less.
Low-value assets comprise IT-equipment and small
items of office furniture.
c. Convertible Note
Convertible loan notes which will or might be settled
other than the exchange of a fixed amount of cash or
another financial asset for a fixed number of shares
are classified as liabilities.
The conversion feature of the convertible notes is
classified as a derivative financial instrument. If the
economic characteristics of the derivative are not
closely related to the host debt it is separated and
accounted for separately as a financial instrument at
fair value through profit and loss.
The fair value of the convertible note as a whole is
assumed to be equal to the transaction price. The
fair value of the derivative is determined first. The
initial carrying amount of the host debt is the residual
amount after separating the embedded derivative.
5. Use of critical accounting
estimates and judgements
The preparation of the interim condensed
consolidated financial statements in conformity with
NZ IFRS requires management to make judgements,
estimates and assumptions that affect the application
of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results
may differ f rom these judgements, estimates and
assumptions. Estimates and underlying assumptions
are reviewed on an on-going basis. Revisions to
accounting estimates are recognised in the period
in which the estimates are revised and in any future
periods affected.
Significant areas of estimation and judgement in
these condensed consolidated financial statements
for the six months ended 30 September 2019 are
consistent with those disclosed in the audited
consolidated financial statements for the year ended
31 March 2019, additional disclosures are as follows:
NZ IFRS 16: Leases ‑ Lease Liabilities, Right‑of‑
use Assets
In determining the discount rate to measure the
present value of the lease payments remaining,
PaySauce has used the incremental borrowing rate
of the Group. Management has assessed that as
PaySauce is a growing SaaS business, and reliant on
funding given it is not yet cashflow positive, funding is
more expensive due to the credit risk of a business of
this nature. The incremental borrowing rate applied
to the lease liabilities on 1 April 2019 was estimated at
15% by management.
Management has assessed the likelihood of
exercising renewal options, determining that it is
likely the property lease will be renewed for both
rights of renewal, extending the lease term f rom 4 to
8 years.
Fair Value of Coulthard Barnes (PaySauce)
Limited Lending
Coulthard Barnes (PaySauce) Limited provided
further interest free, non-current lending during
the period of $130,000. The total lending to date
has been revalued to a fair value of $728,821. The
fair value has been determined by a net present
value calculation. This is based on management
judgement that no principal payments are expected
until at least 18 months after balance date, estimated
by management. This resulted in a gain to the Group
of $143,983 with future recognition of financing costs
over the term of the loan. The discount rate applied
to the net present value calculation is based on
PaySauce’s incremental borrowing rate, estimated at
15% by management. A 1% decrease in this rate would
have an impact of $11,492 on the fair value revaluation
of the lending.
Convertible Note ‑ Public Trust Class 10
Nominees Limited
The conversion feature of the convertible notes
is classified as a derivative financial instrument.
The economic characteristics of the derivative are
not closely related to the host debt so it has been
separated and accounted for separately as a financial
instrument at fair value through profit and loss.
The fair value of the convertible note as a whole is
assumed to be equal to the transaction price. The
fair value of the derivative is determined first. The
initial carrying amount of the host debt is the residual
amount after separating the embedded derivative.
Although the note is expected to convert to equity
on or before the conversion date, management has
determined that the convertible note is deemed to
be a financial liability due to the following:

PaySauce Interim Report 2019
2425
• The interest rate at which interest is accrued on
the notes for conversion depends on whether
growth targets are met or not (see note 7).
Therefore, the number of shares to be issued
will vary depending on the performance of the
business and the “fixed for fixed” requirement
has not been met as a result.
• If PaySauce is in an event of default, then
the holder has the ability to declare the note
immediately due and payable. Therefore, the
requirement of having no contractual obligation
to deliver cash to the holder of the instruments
has not been met.
Management has determined that the conversion
feature represents a non-option derivative and is
therefore separated f rom the host debt on the basis
of its stated and implied terms in order to result in it
having a fair value of nil on initial recognition.
6. Adjustments recognised on
adoption of NZ IFRS 16
On adoption of NZ IFRS 16, PaySauce recognised lease
liabilities in relation to leases which had previously
been classified as ‘operating leases’ under the
principles of NZ IAS 17. These liabilities were measured
at present value of the remaining lease payments,
discounted using PaySauce’s incremental borrowing
rate as of 1 April 2019. The incremental borrowing rate
applied to the lease liabilities on 1 April 2019 was 15%.
PaySauce held no finance leases at 31 March 2019.
The key impacts for the Group as at 1 April 2019 were:
• Additional right of use asset relating to the
property lease, recognised on transition at
$349,870.
• Additional lease liability relating to the property
lease, recognised on transition at $349,870.
The key impacts for the Group for the six month
period ended 30 September 2019 were:
• Increased net loss by $14,545 as the interest and
depreciation calculated under NZ IFRS 16 were
greater than the operating lease payments under
NZ IAS 16.
• A closing right of use asset relating to the
property lease, recognised on transition of
$328,003.
• A closing lease liability relating to the property
lease, recognised on transition of $342,547.
A reconciliation of operating lease commitments at
31 March 2019 to the lease liability recognised at 1 April
2019 is shown below:

Unaudited
$
Operating lease commitments disclosed at 31 March 2019307,660
Discounted using the lessee’s incremental borrowing rate at the date of initial application(195,130)
Different treatment of extensions and incentives280,000
Different treatment of lease commitments disclosed as inclusive of GST(39,750)
Different treatment of low value leases(2,910)
Lease liabilities recognised as at 1 April 2019349,870
Classified as:
Current lease liabilities17,478
Non-current lease liabilities332,392
Lease liabilities recognised as at 1 April 2019349,870
7. Convertible note
During the period, PaySauce entered into a
Convertible Note Subscription Deed with Public Trust
Class 10 Nominees Limited (custodian to the clients of
Cleary Wealth Management Limited, the arranger of
the deal).
PaySauce issued $773,000 of convertible notes
during the six-month period ended 30 September
2019. The remaining $727,000 was requested before,
but not received prior to 30 September 2019, and is
represented as a receivable balance on the statement
of financial position as a result. The fair value of this
receivable is approximately equal to its face value.
Key terms of the convertible notes
• On 30 June 2021 the notes will convert into
ordinary shares of the parent, unless both the
holder and issuer agree to extend the conversion
date to 30 June 2023, or either the holder or issuer
elects to convert the notes at an earlier date.
• The number of ordinary shares issued for each
note is calculated as the net amount outstanding
for the notes divided by the conversion price of
$0.515.
• The notes bear interest at 11% per annum, or if
PaySauce does not meet its growth target for
that financial year, 13.5% per annum. The interest
is capitalised to the net amount outstanding
of the note before it is converted. If conversion
occurs prior to 30 June 2021, or 30 June 2023
if the scheduled maturity date is extended,
then the interest accrued on each note will
be increased to the amount that would have
accrued if the conversion was occurring on the
scheduled maturity date.
• If PaySauce is in an event of default, then
the holder has the ability to declare the note
immediately due and payable.
The convertible notes are presented in the balance
sheet as follows:

30 Sept 2019
Unaudited
$
Face value of convertible notes issued773,000
Face value of convertible notes requested but not yet issued727,000
Less value of conversion feature-
Interest expense14,937
Financial liability1,514,937

PaySauce Interim Report 2019
2627
8. Property, plant and equipment
Unaudited
Right‑of‑
use Asset
(Property)
Office
Equipment
Leasehold
Improvements
Computer
Equipment
VehicleTotal
$$$$$$
Six months ended 30
September 2019
Opening net book value‑24,0483,39029,77719,40576,620
Additions349,87012,9485,97024,608-393,396
Disposals--(3,390)--(3,390)
Depreciation(21,867)(3,366)(249)(7,982)(7,277)(40,741)
Closing net book value328,00333,6305,72146,40312,128425,885
As at 30 September
2019
Cost349,87048,8615,97067,20748,513520,421
Accumulated
depreciation
(21,867)(15,231)(249)
(20,804)(36,385)(94,536)
Net book value328,00333,6305,72146,40312,128425,885
9. Intangible assets
Unaudited
WebsiteDevelopment in
progress
Computer
Software
Total
Six months ended 30 September 2019$$$$
Opening net book value‑157,596139,033296,629
Additions-70,61975,568146,187
Development costs recognised as an asset-(68,221)68,221-
Amortisation--(30,466)(30,466)
Closing net book value‑159,994252,356412,350
As at 30 September 2019
Cost26,955159,994552,276739,225
Accumulated amortisation(26,955)-(299,920)(326,875)
Net book value‑159,994252,356412,350
10. Trade and other receivables
30 Sept 201931 Mar 2019
UnauditedAudited
$$
Trade receivables62,17942,983
Public Trust Class 10 Nominees Limited - Convertible Notes727,000-
GST receivable22,619102,565
811,798145,548

PaySauce Interim Report 2019
2829
11. Trade and other payables
30 Sept 201931 Mar 2019
UnauditedAudited
$$
Trade payables512,356487,095
Accruals35,82957,000
Other creditors2,3563,537
550,541547,632
12. Share capital
DateDetailsNotesNumber of Shares$
Unaudited
1 April 2018Opening Balance66,892,9141,999,977
Ordinary share issue16,987,9941,145,000
Share based payment7,143,567500,000
Share based payment22,329,6611,554,084
30 September 2018Closing Balance113,354,1355,119,061
Unaudited
1 April 2019Opening Balance116,870,8755,508,339
30 September 2019Closing Balance116,870,8755,508,339
PaySauce undertook a share consolidation on Friday 12th July 2019, at a 50 : 1 ratio. Shareholders received one PYS
ordinary share for every 50 PYS ordinary shares held at the time of consolidation.
Where the share issue was prior to the share consolidation, the 50 : 1 ratio has been used to calculate the
equivalent number of PaySauce Limited shares that would have been issued. This has also been applied to the
comparative figures for the six month period ended 30 September 2018.
All ordinary shares do not have a par value. They have equal voting rights and share equally in dividends and
surplus on liquidation.
No dividends were declared or paid during the reporting period (2018: None).
13. Earnings / (loss) per share
Basic earnings per share is calculated by dividing the profit / (loss) attributable to equity holders of the Company
by the weighted average number of ordinary shares on issue during the period. An adjustment to take into
account the convertible notes issued is made to the weighted average number of shares used in the calculation of
the diluted earnings per share at 30 September 2019.
30 Sept 201930 Sept 2018
UnauditedUnaudited
Basic earnings per share
Loss for the period(862,028)(2,514,651)
Weighted average number of ordinary shares for basic earnings per share116,870,87579,079,464
Basic loss per share (cents)(0.74)(3.18)
Diluted earnings per share
Loss for the period(862,028)(2,514,651)
Plus interest saving f rom convertible notes14,937-
Net loss used in calculating earnings per share (dollars)(847,091)(2,514,651)
Weighted average number of ordinary shares for diluted earnings per share117,517,02179,079,464
Diluted loss per share (cents)(0.72)(3.18)
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
116,870,87578,713,929
Adjustments for calculation of diluted earnings per share
Convertible notes646,146-
Weighted number of ordinary shares and potential ordinary shares used as
the denominator in calculating diluted earnings per shares
117,517,02178,713,929

PaySauce Interim Report 2019
3031
14. Revenue
30 Sept 201930 Sept 2018
UnauditedUnaudited
$$
Revenue f rom contracts with customers507,295302,847
Revenue f rom other sources230,599130,341
Operating revenue737,894433,188
15. Other gains / (losses) - net
30 Sept 201930 Sept 2018
UnauditedUnaudited
$$
Fair value gain on revaluation of related party loan143,983-
Fair value gain on revaluation of convertible note conversion feature17,913-
Total other gains / (losses) - net161,896‑
16. Employee expenses
30 Sept 201930 Sept 2018
UnauditedUnaudited
$$
Salaries(687,821)(276,128)
Staff medical insurance(5,409)(2,413)
Fringe benefit tax(13,601)-
Total employee expenses(706,831)(278,541)
17. Other expenses
30 Sept 201930 Sept 2018
UnauditedUnaudited
$$
Administration and Management Services(373,603)(64,103)
Advertising, PR and Marketing(129,641)(77,870)
Legal, Consulting and Accounting(151,408)(1,921)
Office Running and Rent(28,995)(29,607)
Other Overheads(101,680)(38,985)
Travel(77,488)(38,553)
Total other expenses(862,815)(251,039)
Interest paid(3,894)(1,446)
Finance Cost - Interest on Convertible Note(14,938)-
Finance Cost - Interest on Lease(21,678)-
Finance Cost - Interest on Coulthard Barnes Lending(42,888)-
Total finance costs(83,398)(1,446)
18. Related party transactions
Related PartyRelationship
Cloud Investments LimitedEntity controlled by Director
Coulthard Barnes (PaySauce) LimitedEntity controlled by Director
Woodward Partners LimitedEntity controlled by Director
Catalyst.Net LimitedPartial common ownership
Catalyst Cloud LimitedPartial common ownership
Marsland Consulting LimitedPartial common ownership
Mandy SimpsonDirector

PaySauce Interim Report 2019
3233
a. Key management personnel compensation
Key management personnel are defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group, directly or indirectly and include the Directors, the Chief
Executive Officer and senior managers.
30 Sept 201930 Sept 2018
UnauditedUnaudited
$$
Directors’ fees30,000-
Short term employee benefits150,00090,000
Share based payments-1,554,082
Total key management personnel compensation180,0001,644,082
b. Related party transactions
30 Sept 201930 Sept 2018
UnauditedUnaudited
Related party transactions$$
Purchases from Coulthard Barnes (PaySauce) Limited
Advisory services
-434,783
Purchases from Woodward Partners Limited
Director fees
15,000-
Purchases from Catalyst.Net Limited
Consulting services
9,60012,800
Purchases from Catalyst Cloud Limited
Cloud hosting services
28,21314,169
Purchases from Marsland Consulting Limited
Consulting services
33,04430,766
Purchases from Mandy Simpson
Director fees
15,000-
Total related party transactions100,857492,518
c. Related party payables
30 Sept 201931 Mar 2019
UnauditedAudited
Related party payables$$
Catalyst.Net Limited-3,680
Catalyst Cloud Limited6,0764,433
Coulthard Barnes (PaySauce) Limited922,840792,840
Mandy Simpson2,8752,875
Marsland Consulting Limited3,46611,892
Woodward Partners Limited2,8752,875
Total related party payables938,132818,595
19. Taxation
The Group currently holds tax losses of $3,800,250, available to carry forward, but not recognised in the financial
statements. These are subject to shareholder continuity being maintained.
20. Going concern
The interim condensed consolidated financial statements have been prepared on a going concern basis.
These interim condensed consolidated financial statements have been prepared on the assumption that the
Group raises sufficient additional share capital and operating income increases sufficiently to enable the Group
to continue its business operations. The Board considers the Group will be able to meet its commitments as they
fall due based upon management forecasts and ongoing financial support that is being provided from certain
shareholders.
The Group’s ability to generate sufficient cashflows from operations and raise additional capital to satisfy
its funding and other obligations for a period of at least 12 months following the issuance of these financial
statements creates a material uncertainty which may cast doubt on the Group’s ability to continue as a going
concern.
If the Group was unable to raise additional capital, adjustments may have to be made to reflect the fact that assets
and liabilities may need to be realised at amounts other than those at which they are currently recorded in the
condensed consolidated statement of financial position.
21. Contingencies
As at 30 September 2019 the Group had no material contingent liabilities or assets (2018: $nil)

PaySauce Interim Report 2019
3435
Company Directory
Directors:
Andrew Howard Barnes
Gavin Thompson
Asantha Wijeyeratne
Amanda Rhean Simpson
Nicholas Romilly Lewis
Registered Office:
21-23 Andrew Avenue
Lower Hutt, 5010
New Zealand
Website:
www.PaySauce.com
Auditor:
Grant Thornton
Stock Exchange:
NZX
Share Registrar:
Link Market Services Limited
80 Queen Street
Auckland, 1010
New Zealand
NZ Company Number:
1719868
NZBN:
9429034458099
22. Reconciliation of net loss after tax to net cash flows from operations
30 Sept 201930 Sept 2018
UnauditedUnaudited
$$
Net Loss for the period(862,028)(2,514,651)
Add back / (deduct) non-cash items:
Depreciation & amortisation71,20767,041
Share based payments-1,554,082
Listing costs - reverse acquisition-500,000
Other gains(119,008)-
Loss on disposal of fixed assets3,389-
Capitalised interest14,938-
(891,502)(393,528)
Movement in working capital:
(Increase)/decrease in Trade and other receivables41,438(52,680)
(Increase)/decrease in Prepayments and other assets25,9512,691
Increase/(decrease) in Funds held due to customers5,206,8431,129,287
Increase/(decrease) in Trade and other payables2,909214,059
Increase/(decrease) in Employee benefits 24,2446,655
Increase/(decrease) in Other liabilities(11,203)(2,508)
Increase/(decrease) in Sponsorship revenue in advance -(75,000)
Net cash inflow from operating activities4,398,680828,976
23. Segment reporting
The Group is organised into one reportable operating segment only, being payroll solutions to New Zealand
business. The Group’s product and service offering is that of cloud payroll services. The chief operating decision
maker has been identified as the Board of Directors, as it makes all key strategic resource allocation decisions
(such as those concerning acquisition, divestment and significant capital expenditure).
24. Events occurring after the reporting period
No adjusting or significant non-adjusting events have occurred between the reporting date and the date of
authorisation.

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