Payfare and DoorDash to Not Renew Agreement

Rhea-AI Summary

Payfare Inc. (TSX: PAY) (OTCQX: PYFRF), a leading international Earned Wage Access company, announced that its core services agreement with DoorDash, Inc. for the DasherDirect card program will not be renewed beyond early 2025. As DasherDirect is Payfare's largest program, contributing substantially to total revenues, the company is withdrawing its 2024 financial guidance for revenue and earnings. A transition plan will begin in Q4 2024.

Payfare remains well-capitalized with over $100 million in cash and equivalents. The company is pursuing new strategic initiatives, including large-scale EWA programs in both gig economy and employee verticals, which could potentially mitigate the impact of the DoorDash non-renewal. Additionally, Mr. Hugo Chan has resigned from Payfare's Board of Directors, effective September 26, 2024.

Positive

• Payfare has over $100 million in cash, cash equivalents, and guaranteed investment certificates
• Company is pursuing new large-scale EWA programs in gig economy and employee verticals
• High growth continues with other client programs

Negative

• Core services agreement with DoorDash for DasherDirect card program will not be renewed beyond early 2025
• Withdrawal of 2024 financial guidance for revenue and earnings
• Loss of largest program (DasherDirect) which contributed substantially to total revenues
• Board member Hugo Chan resigned

TORONTO, Sept. 26, 2024 /PRNewswire/ - Payfare Inc. (TSX: PAY) (OTCQX: PYFRF), a leading international Earned Wage Access ("EWA") company powering instant access to earnings and digital banking solutions for workforces, today announced that its core services agreement related to DoorDash, Inc.'s DasherDirect card program will not be renewed beyond the current term in early 2025.

DasherDirect is currently Payfare's largest program, and the revenue derived from the program has been a substantial proportion of Payfare's total revenues. As such, Payfare is withdrawing its previously issued 2024 financial guidance for revenue and earnings, as the Company and DoorDash establish a transition plan to begin in the fourth quarter of 2024. Both parties are expected to work collaboratively during the remainder of the term.

Payfare has over $100 million in cash, cash equivalents, and guaranteed investment certificates and is well capitalized to fund its new strategic initiatives.

Payfare continues to see high growth with its other client programs and is working on securing new, large-scale EWA programs in both the gig economy and employee verticals. The Company believes the aggregate Gross Dollar Value ("GDV") from these opportunities could mitigate the impact of the DoorDash non-renewal.

Board of Directors Update

Following receipt of his resignation to be effective on September 26, 2024, Mr. Hugo Chan will no longer serve as a director of the Company. Mr. Chan, who has served on the Board during the prior two years has since moved to become a resident in Asia and has resigned for personal reasons. The Company thanks Mr. Chan for his expertise and support over the years.

About Payfare (TSX:PAY, OTCQX: PYFRF)

Payfare is a leading, international Earned Wage Access company powering instant access to earnings through an award-winning digital banking platform for today's workforce. Payfare partners with leading e-commerce marketplaces, payroll platforms and employers to provide financial security and inclusion for all workers.

Cautionary Statement Regarding Forward Looking Information

Information and statements contained in this news release that are not historical facts are "forward-looking information" within the meaning of applicable securities legislation that involve risks and uncertainties relating, but not limited, to Payfare's current expectations, intentions, plans, and beliefs. Forward-looking information can often be identified by forward-looking words such as "anticipate", "believe", "expect", "goal", "plan", "target", "intend", "estimate", "could", "should", "may" and "will" or the negative of these terms or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Examples of forward-looking information in this news release include, without limitation: the actual timing for the non-renewal and eventual termination of the Company's services agreement with DoorDash, the anticipated material impact on future revenues and earnings, winning new EWA programs in both the gig economy and employee verticals and aggregate potential new GDV opportunities being able to mitigate the impact of the non-renewal of the Agreement with DoorDash. This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information.

Security holders, potential security holders and other prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Such risks include the factors discussed from time to time in Payfare's filings with the Canadian Securities Authorities, copies of which can be found under Payfare's profile on the SEDAR+ website at www.sedarplus.ca. In addition, there is risk that the non-renewal of the Agreement with DoorDash is either expedited or delayed in comparison to current expectations, or that new client opportunities will take longer to execute on and therefore delay the mitigation impacts sought by the Company. Security holders, potential security holders and other prospective investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Payfare undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

View original content:https://www.prnewswire.com/news-releases/payfare-and-doordash-to-not-renew-agreement-302260513.html

SOURCE Payfare Inc.

FAQ

What is happening to Payfare's agreement with DoorDash for the DasherDirect program?

Payfare announced that its core services agreement with DoorDash for the DasherDirect card program will not be renewed beyond the current term, which ends in early 2025.

How will the non-renewal of the DoorDash agreement affect Payfare's (PYFRF) financial outlook?

Payfare has withdrawn its previously issued 2024 financial guidance for revenue and earnings due to the significant contribution of the DasherDirect program to its total revenues.

What is Payfare's (PYFRF) financial position as of September 26, 2024?

Payfare reported having over $100 million in cash, cash equivalents, and guaranteed investment certificates, stating it is well-capitalized to fund new strategic initiatives.

What strategies is Payfare (PYFRF) pursuing to mitigate the impact of losing the DoorDash agreement?

Payfare is working on securing new, large-scale Earned Wage Access programs in both the gig economy and employee verticals, which they believe could potentially offset the impact of the DoorDash non-renewal.