Ann: Openpay Q3 FY22 Trading Update, page-36

Just look at Openpay US progress over the last 12 months - a total disaster!
Went live in October 2021 and has delivered ZERO contribution to the group.

Simple takeaway is that cash is running dry and fast. Cash balance at 31 December 2021 was $32M with interest scaling up fast at $5.555M for Q2 FY22. They can keep drawing down on debt to reduce cash burn (but this is unsustainable and very costly). Without debt, cash burn is $32M per quarter and Openpay will run out of cash by the end of 2022 at this rate. They badly need more cash to continue as a going concern and you'll see the extent of the burn on the 28th April 2022.


28 April 2021 (pro-forma cash position of $73M)
- Opy USA ticks key boxes on its six-pillar strategy through agreements signed with global payments provider, Worldpay from FIS, and with veterinary channel aggregator, ezyVet


28 July 2021 (cash of $52M)
- Openpay delivers continued strong growth in core business whilst setting the strategic foundations for step-change growth in the US and UK (target US launch in early October 2021)
- Opy USA going live in the world’s largest developed BNPL market in early October 2021, anchored by integration with large wholesale merchant aggregators and key strategic partnerships in our preferred core verticals of Healthcare, Automotive and Home Improvement

Going live with Opy USA – getting ready to kick off in early October 2021
Openpay has continued to localise the Opy platform and systems, positioning it in the world’s largest developed
market as the next generation BNPL product. Openpay is pleased to announce that it is targeting to go live in early
October 2021.
A cohesive US entry program has been designed with our differentiated longer terms, larger value and customised
payment plans, built around a model to scale quickly with strategic aggregator partnerships as shown by Openpay’s
partnership with world-leading payments provider Worldpay from FIS, which was announced in late March 2021.
Following extensive collaboration with Opy’s Merchant Advisory Group of US business leaders, our US product will
be a highly competitive interest free, significantly lower cost alternative to credit cards and longer duration BNPL
peers that commonly charge compounding interest with annualised percentage rates as high as 36%.
This major differentiator is expected to attract financially savvy consumers and the merchants that serve them. In
addition, with plan terms up to 24 months, limits of up to US-$20,000, and plan designs tailored to specific verticals,
OpyPay further differentiates itself. This is a combination that merchants and consumers have been demanding and
left a gap in the U.S. market until the introduction of OpyPay.
Opy has built a large pipeline of banking and funding partners, wholesale merchant aggregators aligned with our key
verticals (Healthcare, Automotive, etc) as well as ecosystem partners (processors, banks, card networks), with further
key strategic partnerships expected to be announced in Q1 FY22. Many of those are industry leading companies who
are in advanced stages of planning Opy pilots and controlled roll outs to launch in H1 FY22. Openpay looks forward
to providing further updates on its US market entry.
Openpay has also continued to complement its strong US executive leadership team, including the recruitment of
targeted Opy vertical leads to bring extensive experience and networks to further penetrate Opy's presence in the
nascent longer duration US BNPL market. With an emphasis on entering core verticals the team will focus on
healthcare, automotive services and repair, home improvement, as well as deeper channel partnerships.
These recruits include:
- Mike Kimbell joins as Senior VP, Head of U.S. Healthcare for Opy. Mike brings 20 years in Healthcare overall
with 15 most recently at the patient financing leader in the U.S. – Synchrony Financial and CareCredit, as a
consultative leader working directly with doctor owners, teams and industry partners.
- Glenn Drake is the Senior Vice President and Head of Automotive and Mobility Business Development and
Strategy for Opy. For almost twenty years, Glenn has developed and executed sales and marketing strategies
for Jaguar Land Rover North America.
- Michele Raneri is Opy’s SVP, Head of Data and Consumer Credit Product where she has been researching,
negotiating, and delivering the best scores and data in the market that are required for Opy’s MVP strategy.
She has been in risk and analytics for over 3 decades, including VP of Analytics and Business Development
at Experian, and led Database Management and Risk Analytics at Citi Cards and Citi Mortgage.
- Mike Smith joins Opy as Senior VP, US Head of Risk. Mike brings 30 years of experience in Financial Services
focused on risk management, lending and leveraging data, technology and advanced analytics. Most
recently served as SVP, Credit Agile Transformation and Strategic Initiatives for Synchrony Financial. Prior to
Synchrony Financial, Mike held a variety of Executive Risk Management roles for GE Capital.
The effort to Americanise the existing platform is well underway. Regulatory requirements as well as US-specific
preferences are being added to the platform and readied for the above noted pilots and roll outs.


28 October 2021 (cash of $34M, interest paid of $1.949M, unused facilities of $153.3M)
- Openpay delivers strong growth in core businesses and officially goes live in the US
- Successfully went live in the US with ezyVet executing on out differentiated strategy to address strong demand across target verticals

- Our first US plans were signed and transacted in October, taking Openpay into its third major geographic opportunity. This was a major scene setter for the step change in business performance expected as we welcome customers in the world's largest consumer payments market.

US Update
In October, Opy USA (Opy) launched Buy Now Pay Later (BNPL) 2.0 in the world's largest developed market, the
United States. BNPL 2.0 extends the ease, transparency, and affordability of pay-in-4 BNPL for longer term, larger
dollar transactions. Opy’s offering is a result of comprehensive planning and execution - from product definition that
meets the needs of US consumers and conforms to US regulatory requirements, to partnership development that
drives scale and efficiency of US operations.
To recap, the company's consumer product offering, OpyPay, will be based on differentiated longer-term (up to 24
months), larger-value (up to US$20,000) and customised payment plans focused on specific verticals - Healthcare
(e.g., Dental, Vet), Auto Repair, Home Improvement, Education and Big-Ticket Retail. The US product fills gaps unmet
by traditional BNPL offerings and will be a fee-based, significantly lower-cost alternative to credit cards and traditional
merchant-sponsored financing longer-duration BNPL peers that commonly charge compounded interest with
annualised percentage rates (APRs) as high as 36%. OpyPay loan plan APRs are uniquely capped at 9.99%. These
major differentiators are expected to attract financially savvy consumers as well as the merchants that serve them
and will fill in a major offering gap in the US market.
Earlier this month, Opy announced several ground-breaking partnerships that underpin our wholesale distribution
model and offer instant scalability. These include veterinary solution provider ezyVet which will distribute OpyPay
through its leading practice management platform to over 1,200 US veterinary hospitals and clinics; PatientNow
which will similarly integrate OpyPay in its healthcare practice management solution used by over 2,500 healthcare
providers in the US; and Everyware which will enable the first for the US BNPL market pay-by-text offering. These
and other partnerships will offer vertical specialisation and distribution leverage, thus driving massive scale efficiently
across the US.
In addition, Opy signed earlier this month key enabling partners that are foundational for the operation of its US
business - Goldman Sachs and Atalaya Capital Partners which equip Opy with a US$271.4 million receivables facility,
Cross River Bank which enables Opy to offer loans across the US (including loans with fees), and Experian which
enables Opy to efficiently extend low-cost loans to a greater number of consumers.
Our lofty US aspirations are not limited to OpyPay. As a diversified global fintech, we seek and fully anticipate
significant US growth for OpyPro, our end-to-end B2B trade account management SaaS solution for enterprises. We
are confident that many US corporates who currently have inefficient B2B trade management processes with their
buyers will be drawn by the compelling capabilities of OpyPro to eliminate their manual processes and thus to create
a frictionless B2B buying experience, to increase working capital, accelerate growth at scale and improve supplier
buyer relationships. To that end, in August we announced our inaugural OpyPro partnership for the US, where we
signed a referral agreement with Kyriba, a global leader in treasury management and finance solutions. The
partnership will enable access to Kyriba's suite of 2,000+ enterprise-grade clients significantly reducing our customer
acquisition costs and shortening sales cycles.
Given significant demand for Opy plans in the US, we expect that within 3 years, Opy USA with its OpyPay and OpyPro
growth will transform the profile of the entire Openpay Group whereby the US company will represent approximately
2/3 of the business, despite concurrent growth in the UK and Australia.

25 January 2022 (cash of $32M, interest paid of $5.555M, unused facilities of $500.6M)
- Opy US has signed and commenced onboarding dentists, veterinarians, and auto dealerships
- Earlier this month, the Board provided a strategic update where we highlighted furthering our focus in the US and accelerating the path to profitability in ANZ within 12 to 18 months. In addition, we are entering into a partnership agreement with Payment Assist in the UK. This clear strategic direction will promote strong financial performance and long-term value creation for the Group’s shareholders

US Update – A renewed focus on a unique opportunity

Openpay (branded “Opy” in the US) was excited to commence the initial controlled launch of its OpyPay product

during Q2 FY22, with an initial focus on the Healthcare and Automotive Verticals.

Since the initial launch, Opy has already signed, trained, and onboarded dental, veterinarian, and automotive

merchants across eight US states. Opy’s expansion across multiple US states has been enabled through its

partnership with Cross River announced during Q2 FY22, which means that the OpyPay product is a regulated,

responsible finance solution that has US regulatory permission and multi-State credit licensing.

Opy also secured a confidential pilot with a large US healthcare insurance provider (with access to over 50 million

customers) during Q2 FY22, with the pilot commencing in Q3 FY22.