Finance

Payfare Inc. Issues Statement on Annual Filings Delay due to SOC 1 Report Setback

TORONTO, March 28, 2024 /PRNewswire/ - Payfare Inc. ("Payfare" or the "Company") (TSX: PAY) (OTCQX: PYFRF), a prestigious financial services provider catering to the gig economy, has today announced an unavoidable delay in the submission of its financial year-end documentation due to a hitch involving one of its key service vendors.

Unanticipated Hurdles in Compliance Filings

The hiccup emerged when the said vendor lagged in delivering its System and Organization Controls (SOC 1) audit report, an essential document needed for Payfare's auditors to finalize and sign off the company's scrutinized annual financial statements. Consequently, this has set back Payfare's ability to fulfill its regulatory obligation of filing the audited annual financial statements, the related management's discussion and analysis, and the chief executive officer and chief financial officer's attestations for the fiscal year concluded December 31, 2023. These filings usually adhere to the 90-day submission requirements that are part of Parts 4 and 5 of National Instrument 51-102 – Continuous Disclosure Obligations and National Instrument 52-109 – Certification of Disclosure in Issuers' Annual and Interim Filings. The ripple effect of this delay also postpones the filing of Payfare's Annual Information Form (AIF) for the same financial year.

Firm Financial Footing Reasserted

Despite this regulatory delay, Payfare stands firmly by its fourth-quarter and full-year financial prognostications for 2023. The organization has emphasized unequivocally that the postponement spurred by the SOC 1 report does not, in any way, dampen the Company's financial outlook for the year.

Proactive Steps Toward Regulatory Rectification

To manage the circumstances arising from the impeded filings, Payfare has made a strategic move by applying to the Ontario Securities Commission (OSC), its chief regulator, requesting a management cease trade order (MCTO) under the guiding principles of NP 12-203 – Cease Trade Orders for Continuous Disclosure Defaults. If granted, the MCTO will impose restrictions on key executives, such as the CEO and the CFO, preventing them from trading company securities until the awaited Annual Filings have been officially lodged. It should be noted, however, the MCTO does not impact the right of shareholders who are not considered insiders to trade their securities.

Furthermore, Payfare assures that it possesses the requisite financial resources and personnel to timely address and rectify this default. The management forecasts that the Annual Filings will be completed and submitted no later than April 12, 2024. A press announcement is set to be circulated once the filings are consummated and duly registered. Additionally, the company projects scheduling a conference call to debate the financial results and engage analysts in a live Q&A session once a definitive filing date has been ascertained.

Following the final filing of its Annual Filings, Payfare anticipates a simultaneous filing of its AIF, in adherence to regulatory expectations.

Controlling Information Disclosure During the Filing Process

Payfare emphasizes that the filing predicament is solely attributed to the delay in acquiring the SOC 1 audit report from their vendor. In accordance, no material business development nor any significant information pertaining to the company’s affairs that hasn’t been previously disclosed publicly exists as of this statement’s release. Additionally, Payfare clarifies it is not subjected to any insolvency proceedings currently.

In line with the NP 12-203 guidelines for a scenario involving infraction of continuous disclosure, the company has committed to issuing bi-weekly default status reports through press releases, which will be systematically filed on SEDAR+; until this default has been duly remedied.

A Solid Foundation: Introducing Payfare

As a global pioneer in digital banking solutions, Payfare rises to the forefront, serving an ever-growing gig workforce. The company's progressive financial products benefit gig workers universally, especially those collaborating with eminent platforms such as Uber, Lyft, and DoorDash. These services are geared toward fostering enhanced financial stability among their user base.

Looking Ahead: Forward-Looking Information Statement

With an eye on the future, Payfare's announcement includes a transparent "forward-looking information" statement. This provides stakeholders with Payfare's expectations and intentions concerning the timing and consequences of the pending Annual Filings. Furthermore, it contemplates the potential impacts that the issuance of an MCTO might present, not only to the company's internal trading but also to the fulfillment of the continuous disclosure requisites.

Payfare's optimistic predictions hinge on certain prerequisites; the successful filing of the mandatory Annual Filings, the OSC's approval of the MCTO, and the company's pledge to resolve the default by April 12, 2024. Additionally, this forward-looking information assesses the broader implications of the MCTO for Payfare's stakeholders and addresses the company's commitment to adhering to NP 12-203 compliance.

This proffered information, rich with anticipatory conclusions, is structured upon assumptions that may be subject to shifts, potentially leading to drastic disparities in anticipated outcomes. These bold forward-looking declarations are readily identified by their definitive language, often featuring words like "anticipate," "believe," "expect," and similar expressions of certainty regarding future events and performances.

Investor Cautions & Undertakings

Stakeholders and potential investors are advised to exercise discernment when relying on the forward-looking information, recognizing the various risks and uncertainties, some known and others unforeseen, that could skew actual results. Pertinent risk factors periodically referenced in the company's communications to Canadian securities institutions can be accessed on SEDAR+ at www.sedarplus.ca.

Payfare, in accordance with best practice, advises that stakeholders balance their expectations against the reality that forward-looking information inherently includes estimates and assumptions that may not bear fruit. The company will continue its tradition of transparency, keeping the public informed through updates on its forward-looking information in response to novel developments, as required by the law.

Conclusion

In summary, Payfare strives to reassure its stakeholders and the general public of its commitments and capabilities to surmount the recent regulatory challenges. Through consistent updates and the promise of rectification, the company looks forward to reinstating compliance and continuing its mission of providing innovative financial solutions to the gig economy workforce.

SOURCE: Payfare

Payfare remains a dedicated player in the evolution of financial technology, bolstered by this experience to enhance its operational resilience and maintain the trust it has built within the gig worker community and among its investors.

This news release contains information that is provided by Payfare Inc. and reflects their current understanding and plans regarding their financial filings and future business strategies.