quisitive technology solutions inc. quis-tsxv: …...$47.1m/$6.8m and $53.4m/$8.5m, respectively. we...

of 13

May 1, 2020

Technology – Small Cap

Rob Goff | 416-933-3351| [email protected]

Pooja Sharma, B.Eng. (E&C), MFIN | 647.794.1922 | [email protected]

Highlight: With its release of in line Q419 results, QUIS introduced preliminary Q120 guidance

ranges supporting modest revenue outperformance. We expect QUIS’s IT services to benefit

from accelerated COVID-19 led cloud-adoption trends beyond 2020 due to longer sales and

deployment cycles associated with cloud infrastructure. Clearly, the Company has benefitted

from the Azure cloud assessment program that has led to 127 opportunities converting into

consulting projects as of December 19, 2019. We anticipate a sizable untapped opportunity

associated with its partnership with Microsoft (MSFT-Nasdaq, NR) where Azure is still a small

component within MSFT’s large enterprise base and the current cloud shift is a significant

tailwind. Microsoft announced with its FQ220 results an increase of 59% y/y in Azure cloud

business, noting that the COVID-19 impact will continue to be reflected in future periods.

Event: QUIS reported Q419 revenue/adj. EBITDA of $5.4M/$0.3M (39.0% y/y; 1.3%

sequentially) versus our estimates at $5.5M/$0.6M, after adjusting for a discretionary bonus of

$0.5M which would have supported EBITDA at $0.8M. Results for Q419 reflected revenue

growth of 39% including acquisitions while the Q418 EBITDA drain was $0.7M. For the full-year

2019, revenue/EBITDA was at $18.5M/$1.3M up from $12.6M/-$1.0M in 2018. Given the

current economic environment, the Company released preliminary Q120 guidance with

revenue put at $10.9-11.1M and adjusted EBITDA at $1.0-1.2M compared to our previous

forecasts of revenue/EBITDA at $10.1M/$1.4M. We are encouraged by the prospective revenue

outperformance while the modest EBITDA pressure was attributed to higher investment costs

in LedgerPay where costs are expenses rather than capitalized.

Revisions: We increased our 2020/21 revenue/EBITDA by $5.7M/$0.8M and $5.8M/$1.3M to

$47.1M/$6.8M and $53.4M/$8.5M, respectively. We look for potential upside to our baseline

assumptions as the Company signs additional LedgerPay and legacy cloud business contracts.

PT Revision: We are taking our PT from C$0.80 to C$0.95 reflecting our bullish view towards

LedgerPay alongside its Microsoft and dunnhumby (Private) partnerships. We are deliberately

reserving further upside revisions as we see further momentum. We are all too acutely aware

of the scarcity of PT/forecast upgrades in current markets.

Valuation: QUIS is currently trading at a pro forma 2020 EV/Sales and EV/Adj. EBITDA of 1.7x

and 11.9x, respectively, versus its North American IT Services and Consultants/Managed

Services comparables trading at 1.3x and 11.3x, and 3.1x and 17.2x, respectively (Exhibits 3, 4).

We see the emergence of LedgerPay revenues as a significant positive catalyst for both our

baseline forecasts and our valuation benchmarking. We note that global payment technology

providers average 8.9x/7.3x 2020/21 revenues (Exhibit 5) while our survey of 37 SaaS providers

where revenue growth for 2020/21 averaged 16.5%/17.5% reflected 9.1x/7.8x 2020/21

EV/Revenue (Exhibit 6).

Our two peer groups would support a valuation of 6-8x revenues associated with LedgerPay

that could represent upwards of $0.40/shr where its SaaS and license related revenue run-

rate surpass $5M – not an unachievable target. The Company’s objective to sign a LedgerPay bank sponsor and launch a scale merchant model to directly compete with the “big 4” as the default payment platform for any Microsoft Azure cloud customer.

QUIS-TSXV: C$0.21

Speculative Buy C$0.40 Price Target

Quisitive Technology Solutions Inc.

Q419 Actual, Q120 Guidance in Line; Cloud Acceleration Benefits to Continue; Strong Recurring Revenue Base; Partnerships; PT up $0.15

Projected Total Return: 36%

Market Data (C$)

Market Capitalization (M) 76.8

Net Debt (M) 35.6

Enterprise Value (M) 112.5

Basic Shares O/S 109.77

Avg. Daily Volume (M) 0.081

52 Week Range $0.85 / $0.07

Dividend Yield 0.0%

Management

CEO Michael Reinhart

CFO

Top Institutional Ownership % Held

-- --

Total Insider Ownership 20.4%

Revisions (US$) New Old

2020 Revenue 47.1 41.4

2020 Adj. EBITDA 6.8 6.0

2020 EPS 0.00 0.00

Financial Metrics (US$)

FYE 31-Dec 2018 2019 2020E

Total Revenue 12.6 18.5 47.1

Adj. EBITDA (1.0) 1.3 6.8

Adj. EBITDA (%) -7.6% 6.9% 14.5%

Diluted EPS (0.09) (0.08) 0.00

Valuation Data

DCF - Current/Target 0.92 1.03

EV/Rev 6.4 4.4 1.7

EV/EBITDA (85.0) 63.8 11.9

P/E NM NM 2424.4

Quarterly Data (US$)

Q1 Q2 Q3 Q4

2019 4.01 4.18 5.34 5.40

2020 11.02 11.29 12.12 12.70

2019 0.2 0.3 0.9 0.3

2020 1.1 1.4 2.0 2.3

2019 (0.01) (0.02) (0.01) (0.04)

2020 (0.00) (0.00) 0.00 0.01

Company Description

Michael Murphy, CPA

Revenue

Adj. EBITDA

EPS

Quisitive is a digital technology consulting firm whose mission it is to

acquire and integrate companies to become a leading provider of

Microsoft professional services in North America. Quisitive is one of 35

companies that have earned the designation of “National Solution

Provider” or NSP. Most National Solutions Providers are regionally

based and have limited ability to expand services to scale to

Microsoft’s addressable market. Quisitive plans to create its own tier

within the NSP designation as the premier Microsoft Solution

Provider in North America, providing scale through acquisition to

address the growing demand for Microsoft Azure based services.

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20

Vo

lum

e (M

)

Pric

e (C

$)

Source: Consensus Data – FactSet, Historicals –

Company Filings, Forecasts/Estimates –

Echelon Wealth Partners

All numbers in US Dollars unless stated

otherwise.

QUIS-TSXV: C$0.70

Speculative Buy C$0.95 ↑ (prev. C$0.80) Target

mailto:[email protected]

of 13 Rob Goff | 416-933-3351| [email protected]

Quisitive Technology Solutions, Inc. (QUIS-TSXV) | May 1, 2020

The prospective signing of a banking partner to pursue a complete platform solution with a target of end of year or

Q121 would represent a significant catalyst.

Investment Thesis: Our inclusion of Quisitive in our Top Picks Portfolio mandate for Q220 (March 31 pricing $0.41)

reflected our portfolio’s focus on well-managed companies serving growth markets where we see the potential for

significant positive catalysts. We believe recent headlines around the overwhelming demand for Azure services

supports the Company’s alignment with Microsoft. In this regard, we are bullish on the Company’s organic and inorganic growth as a consolidator in the Azure ecosystem. We see the recently announced LedgerPay agreement with Rev19 as

a significant step towards LedgerPay securing significant wins in a growth market where the LedgerPay twofold value

proposition is compelling.

In addition to its legacy cloud business, we believe that the QUIS’s first party offerings like CRG emPerfrom and LedgerPay offer a huge market potential while reinforcing the Company’s ability to develop high-value software

products that support recurring SaaS licensing and maintenance revenue. LedgerPay’s payment and processing cloud

platform offers huge potential with the US market alone for non-cash payments in 2016 being put at $144B. With the

ability to charge 2% fees on the total payments processed represents an ~$3B TAM opportunity for Quisitive’s LedgerPay. We expect monetization to leverage multiple distribution channels and partnership models.

Exhibit 1 – QUIS: Financial Summary

Note: We have greater confidence in our full-year 2020 forecast; however, quarterly distribution is subject to LedgerPay revenue recognition. We would

also like to highlight that the growth in cloud services and consolidation of Menlo will lower gross profit margins in the forecast period while increasing the

EBITDA margin. LedgerPay, on the other hand, is both gross profit and EBITDA accretive.

Source: Company Filings, EWP Estimates

Market Double, Ongoing Momentum Sustainable: QUIS’s share price has more than doubled in the last one month when the closest benchmark S&P/TSX Venture Composite Index is up nearly 30% and the broader S&P/TSX Composite

index has returned 22%. The strength in QUIS represents an ongoing trend rather than a recovery move as QUIS

shares are ahead 160% on a YTD basis. We ascribe the consistent strength to the Company’s successful IT services

acquisitions together with its leverage to surging cloud computing and the announcement of its first commercial

contract for LedgerPay where QUIS strategically selected Rev19 where it represents a strong proof-of-concept (POC)

and proof-of-economics (POE) client. We note the positive response to the Company’s recent virtual investor conference where partners Microsoft and dunhummby alike were very specific and supportive in describing the

importance of their partnerships. We believe the merits behind QUIS’ selection as Microsoft’s US Partner of the Year

award for 2019 moved from a commercial award to take on deeper elements of its strategic alignment. Similarly, QUIS’ alignment with dunhummby took on a strategic element where the Company played a role in supporting the merits of

Microsoft’s Azure to dunhummby. This preceded dunhummby signing on with Microsoft’s Azure and moving away from

Google.

Focus on SaaS, Remote Working: The COVID-19 outbreak has supported the long-term secular tech trend of increased

cloud adoption by companies across industries. Morgan Stanley’s Q120 AlphaWise CIO survey reflects momentum

behind Microsoft’s Azure as their benchmark survey revealed that 39% of CIOs prefer Microsoft Azure, followed by 25%

voting in favour of Amazon’s AWS (AMZN-Nasdaq, NR). We believe that Microsoft with its enterprise software suite

and long-standing client relationships is expected to benefit from the accelerated telecommuting adoption. Quisitive’s

Quisitive

Technology

Solutions Q419 Q419E 2019 2019E Q120E Q120E Q220E Q320E Q420E 2020E 2020E 2021E 2021E 2022E

SUMMARY -

Consolidated Est. Prev. Est. Prev. Est. Prev. Est. Est. Est. Est. Prev. Est. Prev. Est.

Revenue 5,404,860 5,463,563 18,525,288 18,991,370 11,024,294 10,102,262 11,290,811 12,115,424 12,701,421 47,131,949 41,400,908 53,430,041 47,611,044 63,688,609

Growth % 38.5% 40.0% 46.9% 50.6% 175.0% 152.0% 170.0% 127.0% 135.0% 154.4% 118.0% 13.4% 15.0% 19.2%

Gross Profit 2,316,619 2,458,603 7,937,076 8,486,438 4,189,232 4,647,040 4,742,141 5,512,518 6,033,175 20,477,065 19,200,911 25,112,119 22,139,136 31,207,419

Growth % 46.2% 55.2% 69.8% 81.6% 161.0% 189.5% 156.8% 114.0% 160.4% 158.0% 126.3% 22.6% 15.3% 24.3%

Margin % 42.9% 45.0% 42.8% 44.7% 38.0% 46.0% 42.0% 45.5% 47.5% 43.4% 46.4% 47.0% 46.5% 49.0%

Adj. EBITDA 323,876 613,118 1,269,240 1,950,307 1,124,478 1,436,738 1,354,897 1,999,045 2,349,763 6,828,183 6,044,506 8,548,807 7,247,325 10,190,177

Growth % -261.7% -406.1% -233.2% -304.7% 404.8% 545.0% 422.3% 133.8% 625.5% 438.0% 209.9% 25.2% 19.9% 19.2%

Margin % 6.0% 11.2% 6.9% 10.3% 10.2% 14.2% 12.0% 16.5% 18.5% 14.5% 14.6% 16.0% 15.2% 16.0%

Flow-through % 34.9% 52.1% 37.5% 45.5% 12.9% 19.9% 15.4% 16.9% 27.8% 19.4% 18.3% 27.3% 19.4% 16.0%

Capex (Incl. Intangibles) 7,308 301,205 41,255 335,152 320,493 281,789 306,792 295,057 285,679 1,208,021 1,035,823 1,074,519 858,920 987,181

Intensity % 0.1% 5.5% 0.2% 1.8% 2.9% 2.8% 2.7% 2.4% 2.2% 2.6% 2.5% 2.0% 1.8% 1.6%

Net Debt 24,287,646 23,090,762 24,287,646 23,090,762 25,654,271 31,060,076 25,597,342 24,981,014 24,019,598 24,019,598 29,387,205 20,446,862 26,041,822 15,279,984

Net Debt:Adj. EBITDA 14.62x 11.84x 14.62x 11.84x 10.01x 9.82x 5.02x 4.00x 2.91x 2.91x 4.86x 2.39x 3.59x 1.50x

EPS (FD) -$0.037 -$0.010 -$0.084 -$0.042 -$0.004 $0.000 -$0.003 $0.002 $0.005 $0.000 $0.001 $0.019 $0.016 $0.033




2019 US Partner of the Year award reflected recognition of its ‘cloud assessment program’ as it drove adoption of all

three Microsoft clouds and Microsoft O365 services. In awarding QUIS, Microsoft recognized the Company’s 121

assessments that led to $400M in Azure Consumed Revenue (ACR). We believe that the partnership with Microsoft has

become critical in the current COVID-19 period when cloud infrastructure spending is expected to increase by 3.6% to

$61.9B in 2020, as reported by IDC. More than the growth, disruption in the market is bringing greater value to the

Microsoft partnership for both organic gains and as an industry consolidator.

LedgerPay Potential – Bold Ambitions, Supported by Microsoft, dunnhumby: The platform provides merchants the

ability to tokenize payment data that can then be monetized either directly via resale to third parties such as brands or

internally through deriving tactics to better realize on buyer behaviours with targeted promotions. Furthermore, we

believe the platform insights can be monetized by QUIS given its partnership with dunnhumby. For those not familiar

with the space, dunnhumby is owned by Tesco [large retailer based in Europe]. It is recognized as the global leader in

customer service data sciences. The LedgerPay platform also provides a cost-effective, easy to integrate, payment

processing service on a cloud platform, to the ISOs (Independent Sales Organizations) like Rev19, or the merchants

directly. Both the payment and tokenization (data collection) services are independent and complementary to each

other and provide a huge opportunity in the market where $7.1T (~35% of the US GDP in 2018) worth of transactions

in 2018 were cashless, up from $5.5T in 2015. The payment market is undergoing significant technology shifts as cloud

capabilities overtake traditional topologies and the ISOs (independent sales organizations – they work directly with the

end client) and the payment processors themselves are seeing aggressive consolidation (currently 4-5 primary from 8-

9 previously). The ISOs aggregate payments from their end clients and they turn to the payment processors who deal

with the end banks for credit processing.

Forrester in its November 2019 report entitled, “The Future of Retail Revenues Must Be Data Led” indicated that 85%

of grocers stated developing new revenue streams was their top priority. In sizing the opportunity, Quisitive indicated

that a US grocer ranked in the top 10-20 processed $1.6B of non-cash payment transactions. This was characterized

as a $30M annual revenue opportunity for LedgerPay. Partners such as dunnhumby can monetize retail data for up

to ~0.25% of a retailer’s top line.

Turning to the payment processing aspect, as a rule of thumb ISOs can realize a similar 0.25% while the largest prospect

lies in the roughly 1.5-2.0% that the payment processors realize. It should be noted that Quisitive’s LedgerPay platform can work with ISOs and payment processing companies but it could also partner with a bank to launch a scale, direct

processor to compete with the four to five primary payment processors in the US, as the default payment platform for

any Microsoft Azure cloud customer. We note that Quisitive has historically worked with the Chase Bank in developing

the payments solutions. Please refer to Exhibit 2 for depictions of the payment and tokenization ecosystem flows

according to the cardholder and in the eyes of Quisitive.

Consistent with our description of “bold ambition” we note that Quisitive indicates that “Quisitive’s LedgerPay SaaS solution is poised to disrupt the status quo and transform payment transactions into beneficial, profitable and

actionable experiences for both merchants and consumers through cloud-based payment and data analytics solutions.”

We don’t typically clip company position statements; however, we feel it was worthwhile in this case to reflect the

potential of LedgerPay to transform Quisitive. In a less bullish perspective, base case scenario, we see it having

significant value as the Company’s differentiator as it builds organically and through acquisition in its Microsoft

aligned model.

Rev19 Deal: On March 26, QUIS announced signing a deal with Rev19, a private, Texas-based merchant services, and

financial technology company that includes software license, annual license support and maintenance, and annual

support and production services for its payment processing and payment tokenization platform ‘LedgerPay’. Financial terms of the deal were not disclosed; however, management noted that the value of the deal is expected to cover

LedgerPay’s cost of development, generate profit, and contribute towards investments for future development. QUIS

is actively working with Microsoft to co-develop additional features for tighter integration of LedgerPay on Microsoft

Azure. Although non-exclusive, QUIS’s partnership with Microsoft and dunnhumby is collectively significant to enhance




the product marketability by adding additional functionalities. Rev19 has been an aggressive acquirer of merchant

service companies over the LTM with its annual retail clearance volumes now >$1B.

Financial Impact: The agreement with Rev19 includes upfront payment and annual support, services, and production

fees. The deal is heavy on license fees that are nearly 80% of the total value and will be realized in the next three

quarters. Management expects Rev19 to go live with LedgerPay in H220, where the service payments are expected in

2021. With an estimated $2M spent on the development of LedgerPay in the last 2.5 years, out of which an estimated

$1M was spent in the last one year, we estimate the value of the deal to be between $3-5M. We see additional

upside from LedgerPay as the Company signs additional contracts and delivers on the Rev19 contract.

Exhibit 2 – LedgerPay Ecosystem; Tokenization Value Chain

Source: Company Presentation




Valuation

QUIS is currently trading at a pro forma 2020 EV/Sales and EV/Adj. EBITDA of 1.7x and 11.9x, respectively, versus its

North American IT Services and Consultants/Managed Services comparables trading at 1.3x and 11.3x, and 3.1x and

17.2x, respectively (Exhibits 3, 4).

We note that global payment technology providers average 8.9x/7.3x 2020/21 revenues (Exhibit 5) while our survey of

37 SaaS providers where revenue growth for 2020/21 averaged 16.5%/17.5% reflected 9.1x/7.8x 2020/21 EV/Revenue

(Exhibit 6).

Exhibit 3 – Global IT Services Comparables

Source: Consensus Data - FactSet

GLOBAL IT SERVICES COMPARABLES

Price Mkt Cap. LTM Rev EV/Sales EV/EBITDA P/E

NORTH AMERICA Ticker (Local) (US$) (US$) 2019 2020 2021 2019 2020 2021 2019 2020 2021

CGI Inc. Class A GIB.A-CA 88.77 16,560 9,216 2.2 2.2 2.1 12.0 11.3 10.7 18.9 18.8 17.2

Calian Group Ltd. CGY-CA 45.40 437 362 1.2 1.0 0.9 14.6 11.5 10.0 17.9 20.0 17.8

Accenture Plc Class A ACN 185.19 117,971 44,656 2.7 2.7 2.6 16.5 14.9 14.5 25.2 24.2 22.8

DXC Technology Co. DXC 18.13 4,600 20,042 0.7 0.7 0.8 3.9 4.4 4.6 3.4 3.6 3.1

Conduent, Inc. CNDT 2.52 527 8,600 0.5 0.5 0.5 4.1 4.8 4.6 4.1 6.5 5.4

MAXIMUS, Inc. MMS 67.32 4,305 3,040 1.5 1.4 1.5 10.8 10.1 10.5 18.1 18.0 17.8

CACI International Inc Class A CACI 250.14 6,272 5,598 1.6 1.4 1.3 16.8 13.5 12.3 23.9 20.0 17.8

Booz Allen Hamilton Holding Corporation Class A BAH 73.44 10,297 7,274 1.6 1.5 1.4 16.1 15.0 13.8 23.4 21.4 18.8

Leidos Holdings, Inc. LDOS 98.81 14,016 11,094 1.5 1.3 1.2 14.7 13.5 11.8 19.1 18.2 15.6

Science Applications International Corp. SAIC 81.66 4,714 6,379 1.1 0.9 0.9 12.6 10.7 9.6 14.4 13.3 11.1

ManTech International Corporation Class A MANT 74.56 3,001 2,332 1.4 1.3 1.2 16.1 14.7 13.7 26.3 26.4 24.4

Averages: 1.4 1.3 1.3 12.4 11.3 10.6 17.5 16.8 15.2

EUROPE

Capgemini SE CAP-FR 85.74 15,913 15,809 1.1 1.0 0.9 7.7 7.0 6.2 13.4 13.8 11.9

Atos SE ATO-FR 65.06 7,781 12,970 0.9 0.9 0.9 6.2 6.8 6.4 8.4 9.3 8.5

Capita plc CPI-GB 0.3898 821 7,110 0.6 0.6 0.6 5.0 5.9 5.1 3.0 4.6 3.7

Sopra Steria Group SA SOP-FR 108.1 2,432 4,963 0.7 0.7 0.7 6.6 7.8 6.7 12.1 14.6 11.0

EVRY ASA EVRY-NO NA NA 1,458 1.2 NA NA 10.4 NA NA 13.5 NA NA

Indra Sistemas, S.A. Class A IDR-ES 7.865 1,522 2,997 0.7 0.7 0.7 6.3 6.6 5.9 NM NM 8.9

Averages: 0.9 0.8 0.8 7.0 6.8 6.1 10.1 10.6 8.8

AUSTRALIA/JAPAN

NTT DATA Corporation 9613-JP 1105.00 14,493 18,725 0.9 0.9 0.9 6.9 6.4 5.9 17.0 15.0 13.1

DWS Limited DWS-AU 0.71 61 114 0.8 NM NM 5.0 4.8 NM 9.0 5.6 NM

Empired Ltd EPD-AU 0.35 37 119 0.5 0.5 0.5 5.7 5.5 4.9 NM NM 10.0

Averages: 0.7 0.7 0.7 5.9 5.5 5.4 13.0 10.3 11.5

INDIA/OFFSHORE

Tata Consultancy Services Limited 532540-IN 2015 100,679 22,135 4.6 4.6 4.2 17.3 17.4 15.7 23.4 23.7 21.2

Infosys Limited 500209-IN 716 40,619 12,804 2.9 3.1 2.8 12.7 12.6 11.3 17.0 18.7 16.8

Cognizant Technology CTSH 58.02 31,832 16,783 1.8 1.9 1.8 9.7 10.0 9.2 14.5 15.7 14.3

Wipro Limited 507685-IN 191 14,494 8,606 1.4 1.4 1.4 7.1 7.5 7.1 11.5 12.1 11.1

Genpact Limited G 34.43 6,549 3,514 2.3 2.1 1.9 12.6 12.4 10.9 16.8 16.5 14.1

Virtusa Corporation VRTU 33.00 985 1,312 1.1 1.1 1.0 10.7 9.6 12.1 14.0 14.1 10.9

ExlService Holdings, Inc. EXLS 61.73 2,118 991 2.2 2.1 2.0 15.7 14.8 12.7 20.0 19.3 17.0

Globant SA GLOB 115.67 4,297 659 6.7 5.7 4.7 33.3 28.5 22.5 50.5 47.5 35.7

WNS (Holdings) Limited Sponsored ADR WNS 49 2,429 #N/A 2.8 3.0 2.6 11.4 16.5 11.2 15.8 25.1 16.2

Tech Mahindra Limited 532755-IN 546 7,024 5,150 1.2 1.1 1.0 7.3 6.6 5.8 11.2 10.9 9.6

Averages: 2.7 2.6 2.3 13.8 13.6 11.9 19.5 20.4 16.7




Exhibit 4 – Global VARs/Consultants/Managed Services Comparables

Source: Consensus Data – FactSet

Exhibit 5 – Global Payment Technology Providers


Exhibit 6 – Global SaaS Providers Survey (n=37)

GLOBAL VARs/MSPs


Ticker (Local) (US$) (US$) 2019 2020 2021 2019 2020 2021 2019 2020 2021

Pivot Technology Solutions, Inc. PTG-CA 1.42 40 1,219 0.1 0.1 0.1 5.3 5.0 4.2 NM 2424.4 34.9

Tech Data Corporation TECD 140.64 4,993 36,998 0.2 0.2 NM 7.7 8.1 NM 11.2 12.1 NM

CDW Corp. CDW 110.80 15,762 18,032 1.1 1.1 1.1 14.0 14.1 13.2 18.2 19.4 17.0

PC Connection, Inc. CNXN 45.95 1,200 8,600 0.4 0.4 0.4 8.9 9.3 8.9 14.7 15.5 14.5

Insight Enterprises, Inc. NSIT 54.29 1,914 3,200 0.4 0.3 0.3 9.5 8.9 7.2 10.0 10.0 7.7

ManTech International Corporation Class A MANT 74.56 3,001 2,332 1.4 1.3 1.2 16.1 14.7 13.7 26.3 26.4 24.4

ePlus inc. PLUS 70.75 956 1,526 0.6 0.7 0.6 8.4 9.2 8.8 12.3 13.7 12.8

Softcat Plc SCT-GB 11.30 2,245 1,206 2.2 2.0 1.8 25.7 23.6 22.2 32.8 30.5 28.8

Virtusa Corporation VRTU 33.00 985 1,312 1.1 1.1 1.0 10.7 9.6 8.4 14.0 14.1 10.9

Perficient, Inc. PRFT 34.83 1,155 566 2.1 2.1 2.0 12.7 12.2 10.8 16.8 16.7 14.6

QSC AG QSC-DE 1.17 146 238 0.4 0.7 0.6 0.7 NM 16.0 1.9 NM NM

Computer Task Group, Incorporated CTG 4.14 62 384 0.2 0.2 0.2 5.0 4.9 4.5 10.3 12.9 11.5

CSP Inc. CSPI 10.84 45 77 NM NM NM NM NM NM NM NM NM

WidePoint Corporation WYY 0.44 37 102 0.4 0.3 NM 10.2 11.3 NM NA 87.9 NM

Averages: 0.9 0.9 0.9 10.8 11.4 11.4 15.3 23.6 15.8

CONSULTANTS/MANAGED SERVICES



Quisitive Technology Solutions, Inc. QUIS-CA 0.70 41 23 4.4 1.7 1.5 63.8 11.9 9.5 NM 2424.4 34.9

Cognizant Technology Solutions Corporation Class ACTSH 58.02 31,832 16,783 1.8 1.9 1.8 9.7 10.0 9.2 14.5 15.7 14.3

EPAM Systems, Inc. EPAM 220.89 12,280 2,294 5.3 4.5 3.7 28.2 25.4 19.9 40.8 37.8 30.1

Perficient, Inc. PRFT 34.83 1,155 566 2.1 2.1 2.0 12.7 12.2 10.8 16.8 16.7 14.6

Globant SA GLOB 115.67 4,297 659 6.7 5.7 4.7 33.3 28.5 22.5 50.5 47.5 35.7

ExlService Holdings, Inc. EXLS 61.73 2,118 991 2.2 2.1 2.0 15.7 14.8 12.7 20.0 19.3 17.0

Genpact Limited G 34.43 6,549 3,514 2.3 2.1 1.9 12.6 12.4 10.9 16.8 16.5 14.1

Averages: 3.4 3.1 2.7 18.7 17.2 14.3 26.6 25.6 21.0

Global Payments Tech Providers



Quisitive Technology Solutions, Inc. QUIS-CA 0.70 41 23 4.4 1.7 1.5 63.8 11.9 9.5 NM 2424.4 34.9

PayPal Holdings Inc PYPL 123.00 144,266 17,534 7.9 7.0 6.0 28.7 25.6 21.1 39.7 37.8 30.7

Fidelity National Information Services, Inc. FIS 131.89 81,473 10,332 7.7 6.1 5.6 18.8 14.4 12.5 23.5 23.1 19.3

Fiserv, Inc. FISV 103.06 69,703 10,187 5.4 5.4 5.0 16.9 14.3 12.7 25.8 23.1 19.0

Automatic Data Processing, Inc. ADP 146.69 63,047 14,712 4.5 4.4 4.4 19.2 17.9 17.6 26.9 25.4 25.1

Global Payments Inc. GPN 166.02 49,827 4,912 9.1 6.3 5.6 20.9 14.3 12.0 26.7 27.1 21.5

Adyen NV ADYYF 990.00 29,796 NA 55.1 43.7 30.8 101.1 78.7 52.8 148.5 118.0 78.5

Square, Inc. Class A SQ 65.14 28,632 4,714 13.2 12.5 9.5 71.6 89.5 51.4 81.4 118.8 65.7

FleetCor Technologies, Inc. FLT 241.25 20,610 2,649 9.5 9.6 8.6 16.7 16.3 14.2 20.5 20.6 17.4

Wirecard AG WDI-DE 90.40 11,170 2,513 3.3 2.7 2.1 11.7 9.0 6.9 20.8 16.2 12.2

Jack Henry & Associates, Inc. JKHY 163.55 12,548 1,631 8.1 7.5 7.0 24.8 23.1 21.1 46.5 44.7 40.3

Temenos AG TEMN-CH 125.60 9,248 946 11.0 11.2 9.9 26.7 24.9 22.4 37.0 36.1 32.1

WEX Inc. WEX 132.32 5,737 1,724 4.6 4.9 4.3 11.4 11.7 9.8 14.4 16.4 13.5

ACI Worldwide, Inc. ACIW 27.40 3,175 1,258 3.6 3.1 2.9 14.9 10.8 10.0 48.1 20.2 18.5

EVERTEC, Inc. EVTC 25.34 1,821 487 4.7 4.8 4.5 10.3 10.5 9.5 12.9 14.2 12.1

Bottomline Technologies (de), Inc. EPAY 41.63 1,832 435 4.2 4.0 3.7 17.9 18.0 16.0 30.8 31.6 27.9

Averages: 10.1 8.9 7.3 27.4 25.3 19.3 40.2 38.2 28.9





Global SaaS

1 Month 3 Month YTD 1 Year C2019 C2020 C2021 C2020 C2021 C2020 C2021 C2020 C2021 C2019 C2020 C2021

Average (25%+ y/y 2020 Rev. Growth) 23.1% 3.8% 13.5% 20.0% 18.5x 14.9x 11.5x 48.6x 38.3x 868.3x 185.5x 38.2% 33.0% 66.7% 65.9% 66.9%

Average (≤ 25%, ≥15% y/y 2020 Rev. Growth)

26.8% 0.0% 11.1% 9.0% 9.2x 7.8x 6.6x -3.4x -248.5x 58.9x 32.9x 19.0% 19.1% 75.8% 76.2% 76.6%

Average (≤ 15% y/y 2020 Rev. Growth) 18.7% -4.2% 2.1% 6.5% 7.7x 7.7x 7.2x 45.5x 42.2x 31.4x 21.5x 6.3% 10.4% 74.3% 74.0% 74.0%

Average (85+% 2020 Gross Margin) 17.1% -6.3% 2.2% 2.1% 10.5x 9.7x 8.7x 29.7x -238.1x 41.1x 25.1x 9.8% 12.7% 87.8% 88.0% 88.1%

Average (85-70% 2020 Gross Margin) 18.8% -3.9% 5.7% 5.2% 11.1x 9.6x 8.1x 44.5x 37.4x 47.9x 34.8x 19.3% 18.6% 77.8% 78.2% 76.1%

Average (< 70% 2020 Gross Margin) 29.4% 4.8% 12.7% 21.9% 10.7x 8.9x 7.2x 21.4x 17.2x 474.8x 103.8x 22.4% 23.1% 56.5% 56.3% 57.1%

Average (>20% Rev Growth ∩ 80%+ Gross Margin - 2020)

24.0% -6.7% 4.5% 5.2% 12.5x 10.2x 8.4x -33.8x -618.3x 47.4x 35.7x 21.0% 21.0% 86.9% 87.4% 87.7%

Average (10-20% Rev Growth ∩ 70-80% Gross Margin - 2020)

21.9% -3.1% 6.4% 6.6% 8.5x 7.4x 6.7x 33.7x 31.2x 27.9x 22.9x 13.3% 11.9% 77.7% 77.7% 78.1%

Average 22.1% -1.3% 7.2% 9.8% 10.2x 9.1x 7.8x 30.2x -52.9x 183.5x 53.2x 16.5% 17.5% 73.5% 73.2% 73.5%

Median 19.2% -4.4% 3.3% 4.7% 8.5x 7.0x 6.3x 31.2x 26.7x 27.5x 23.0x 13.5% 17.4% 75.1% 73.6% 73.4%

Gross Margin

Revenue Growth

Global SaaS - Revenue Growth ∩ Gross Margin

Revenue Growth

y/y% Gross Profit MarginEV/EBITDAReturns EV/Sales EV/Gross Profit




Exhibit 7 – QUIS: Detailed Financials and Forecast

Quisitive Technology Solutions, Inc.

Income Statement (FYE Dec, US$) 2018 Q119 Q219 Q319 Q419 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E

Act. Act. Act. Act. Est. Est. Est. Est. Est. Est. Est. Est. Est.

Total Revenue 12,606,724 4,008,834 4,181,782 5,337,191 5,404,860 18,525,288 47,131,949 53,430,041 63,688,609 75,152,559 87,928,494 102,876,338 120,365,315

Total Cost of Sales 7,933,300 2,403,821 2,334,801 2,761,350 3,088,241 10,588,212 26,654,884 28,317,922 32,481,191 37,952,042 43,964,247 50,923,787 58,979,005

Sales and Marketing 2,056,445 659,169 791,864 890,489 945,186 3,294,509 6,689,332 8,014,506 10,190,177 11,648,647 13,189,274 14,917,069 16,851,144

General and Administrative 3,569,533 723,097 779,766 771,981 985,341 3,236,831 6,488,230 8,014,506 10,190,177 11,648,647 13,189,274 14,917,069 16,851,144

Research and Development 0 0 15,920 58,360 62,216 136,496 471,319 534,300 636,886 751,526 879,285 1,028,763 1,203,653

Restructuring Charges 0 0 0 0 0 - - - - - - - -

Stock Based Compensation 403,864 45,745 49,687 32,939 161,233 289,604 706,979 801,451 955,329 1,127,288 1,318,927 1,543,145 1,805,480

Depreciation 94,787 148,719 159,376 180,867 175,264 664,226 851,902 94,038 6,371 398 24 1 0

Amortization 1,488,101 403,581 479,433 628,636 748,223 2,423,368 1,933,609 1,783,499 1,645,043 1,517,335 1,399,542 1,290,893 1,190,678

Total Operating Expenses 7,612,730 1,980,311 2,276,046 2,563,272 3,077,463 10,045,034 17,141,372 19,242,301 23,623,984 26,693,840 29,976,327 33,696,941 37,902,100

Operating Income (2,939,306) -375,298 -429,065 12,569 -760,844 (2,107,958) 3,335,693 5,869,819 7,583,435 10,506,677 13,987,920 18,255,610 23,484,211

Total Other Income (3,632,707) -281,247 -1,234,212 -445,269 -2,600,464 (5,199,316) (3,298,340) (3,277,582) (3,023,138) (2,788,446) (2,571,974) (2,372,307) (2,188,140)

EBT (6,572,013) -656,545 -1,663,277 -432,700 -3,361,308 (7,307,274) 37,352 2,592,236 4,560,297 7,718,231 11,415,947 15,883,303 21,296,071

Income Taxes (38,187) 0 -71,225 -75,016 76,806 (69,435) (7,470) (518,447) (912,059) (1,543,646) (2,283,189) (3,176,661) (4,259,214)

Net Income (Loss) (6,610,200) -656,545 -1,734,502 -507,716 -3,284,502 (7,376,709) 29,882 2,073,789 3,648,238 6,174,585 9,132,757 12,706,643 17,036,857

EPS

Basic EPS (0.09) -0.01 -0.02 -0.01 -0.04 (0.08) 0.00 0.02 0.03 0.06 0.08 0.12 0.16

Diluted EPS (0.09) -0.01 -0.02 -0.01 -0.04 (0.08) 0.00 0.02 0.03 0.06 0.08 0.12 0.16

Shares Outstanding

Shares Outstanding, Basic 70,243,772 84,831,013 86,322,242 89,981,328 89,981,328 87,813,530 109,766,309 109,766,309 109,766,309 109,766,309 109,766,309 109,766,309 109,766,309

Shares Outstanding, Diluted 70,243,772 84,831,013 86,322,242 89,981,328 89,981,328 87,813,530 109,766,309 109,766,309 109,766,309 109,766,309 109,766,309 109,766,309 109,766,309

Operating Metrics

Gross Profit 4,673,424 1,605,013 1,846,981 2,575,841 2,316,619 7,937,076 20,477,065 25,112,119 31,207,419 37,200,517 43,964,247 51,952,551 61,386,311

EBITDA (952,554) 222,747 46,961 1,067,482 487,370 1,269,240 6,828,183 8,548,807 10,190,177 13,151,698 16,706,414 21,089,649 26,480,369

EBT (6,572,013) -656,545 -1,663,277 -432,700 -3,361,308 (7,307,274) 37,352 2,592,236 4,560,297 7,718,231 11,415,947 15,883,303 21,296,071

Net Income (813,874) -548,345 -802,644 -226,864 1,623,270 97,117 29,882 2,073,789 3,648,238 6,174,585 9,132,757 12,706,643 17,036,857

Adj. EBITDA (952,554) 222,747 259,431 855,011 323,876 1,269,240 6,828,183 8,548,807 10,190,177 13,151,698 16,706,414 21,089,649 26,480,369


Balance Sheet (As at Dec 31, US$) 2018 Q119 Q219 Q319 Q419 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E


Current Assets

Cash 273,448 66,955 998,809 781,588 1,419,756 1,419,756 10,889,464 11,184,617 13,328,358 18,432,328 26,843,262 39,194,866 56,265,676

Restricted Cash & ST Inv. 0 0 0 0 7,310,500 7,310,500 7,310,500 7,310,500 7,310,500 7,310,500 7,310,500 7,310,500 7,310,500

Trade & Other Receivables 1,400,739 1,951,689 2,574,619 3,231,003 3,964,599 3,964,599 6,259,427 7,198,341 8,580,423 10,124,899 11,846,132 13,859,974 16,216,170

Investment/Income Tax Credits 0 0 0 0 331,010 331,010 0 192,274 220,542 257,688 298,510 345,764 400,457

Prepaid Expenses & Other Assets 191,971 277,669 536,606 654,603 205,593 205,593 1,066,919 1,238,643 1,420,746 1,660,045 1,923,022 2,227,436 2,579,776

Inventory 510,444 461,284 286,154 225,272 196,645 196,645 292,107 339,122 388,979 454,495 526,495 609,839 706,304

Total Current Assets 2,376,602 2,757,597 4,396,188 4,892,466 13,428,103 13,428,103 25,818,417 27,463,497 31,249,548 38,239,955 48,747,920 63,548,379 83,478,884

Non-Current Assets

Property and Equipment 179,840 1,240,183 1,215,909 1,061,985 900,148 900,148 96,101 6,483 404 25 2 0 0

Intangible Assets 4,922,572 4,518,991 9,814,184 9,190,568 9,962,968 9,962,968 9,189,524 8,476,125 7,818,108 7,211,174 6,651,357 6,135,000 5,658,728

Goodwill 5,752,748 5,752,748 16,439,450 16,439,450 15,005,578 15,005,578 23,779,768 23,779,768 23,779,768 23,779,768 23,779,768 23,779,768 23,779,768

Prepaid Expenses & Other 27,347 27,347 205,860 274,950 0 0 0 0 0 0 0 0 0

Total Assets 13,259,109 14,296,866 32,071,591 31,859,419 39,296,797 39,296,797 58,883,811 59,725,872 62,847,827 69,230,921 79,179,047 93,463,147 112,917,380

Current Liabilities

Trade & Other Payables 2,109,409 1,862,031 7,653,217 2,699,330 4,396,151 4,396,151 4,381,599 5,086,828 5,834,687 6,817,432 7,897,421 9,147,583 10,594,564

Deferred Revenue 0 0 1,636,920 1,512,464 1,241,957 1,241,957 3,594,502 4,133,677 4,927,344 5,814,265 6,802,690 7,959,148 9,312,203

Operating Line 230,253 1,014,171 540,498 930,098 1,840,630 1,840,630 1,697,739 1,565,940 1,444,373 1,332,244 1,228,819 1,133,424 1,045,434

Short-Term Debt 6,430,945 6,868,152 4,009,025 9,199,336 17,751,377 17,751,377 16,373,305 15,102,215 13,929,802 12,848,406 11,850,961 10,930,949 10,082,359

Provisions 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Current Liabilities 8,770,607 9,744,354 13,839,660 14,341,228 25,230,115 25,230,115 26,047,145 25,888,660 26,136,207 26,812,347 27,779,892 29,171,103 31,034,560

Non-Current Liabilities

Term Loan 0 674,516 13,965,690 13,656,779 13,425,895 13,425,895 24,148,518 22,273,824 20,544,666 18,949,746 17,478,642 16,121,743 14,870,183

Provision/Loan/Benefits Payable 0 0 46,818 46,264 1,969,419 1,969,419 1,969,419 1,969,419 1,969,419 1,969,419 1,969,419 1,969,419 1,969,419

Total Liabilities 8,770,607 10,418,870 27,852,168 28,044,271 40,625,429 40,625,429 52,165,082 50,131,904 48,650,292 47,731,512 47,227,953 47,262,266 47,874,162

Shareholders Equity

Share Capital 9,117,405 9,117,405 9,679,633 9,793,723 9,793,723 9,793,723 9,793,723 9,793,723 9,793,723 9,793,723 9,793,723 9,793,723 9,793,723

Contributed Surplus 374,266 415,332 461,062 450,411 819,609 819,609 1,526,588 2,328,039 3,283,368 4,410,656 5,729,584 7,272,729 9,078,209

Retained Earnings (6,593,814) -7,233,857 -8,954,986 -9,442,814 -13,901,107 (13,901,107) (13,871,225) (11,797,436) (8,149,198) (1,974,614) 7,158,144 19,864,787 36,901,644

Total Shareholders Equity 4,488,502 3,877,996 4,219,423 3,815,148 -1,328,632 -1,328,632 -591,771 2,283,469 6,887,036 14,188,909 24,640,594 38,890,382 57,732,718

Total Liabilities & Shareholders Eq. 13,259,109 14,296,866 32,071,591 31,859,419 39,296,797 39,296,797 51,573,311 52,415,372 55,537,327 61,920,421 71,868,547 86,152,647 105,606,880




Source: Company Filings, EWP Estimates


Cash Flow Statement (FYE Dec, US$) 2018 Q119 Q219 Q319 Q419 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E


Cash Provided By Operating Activities

Net Income (Loss) (6,610,200) -656,545 -1,734,502 -507,716 -4,477,944 (7,376,707) 29,882 2,073,789 3,648,238 6,174,585 9,132,757 12,706,643 17,036,857

Amortization of Intangibles 1,488,101 403,581 479,433 628,636 911,718 2,423,368 1,933,609 1,783,499 1,645,043 1,517,335 1,399,542 1,290,893 1,190,678

Depreciation of Property & Equipment 94,787 148,719 -53,094 393,337 175,264 664,226 851,902 94,038 6,371 398 24 1 0

Stock Based Compensation Expense 403,864 45,745 49,687 32,940 161,232 289,604 706,979 801,451 955,329 1,127,288 1,318,927 1,543,145 1,805,480

Impairment 0 0 0 0 0 - - - - - - - -

Gain on sale of asset 0 0 0 0 0 - - - - - - - -

Changes in Non-Cash Working Capital

Trade & Other Receivables 82,484 -550,950 306,603 -656,385 -733,596 (1,634,328) (2,294,828) (938,914) (1,382,082) (1,544,476) (1,721,233) (2,013,842) (2,356,196)

Investment/Income Tax Credits 0 0 0 0 0 - 331,010 (192,274) (28,268) (37,146) (40,822) (47,254) (54,694)

Prepaid Expenses & Other Assets (64,121) -85,699 31,212 -21,207 63,667 (12,027) (861,326) (171,723) (182,104) (239,298) (262,977) (304,414) (352,340)

Trade & Other Payables (119,033) -247,559 212,441 -353,041 2,335,355 1,947,196 (14,552) 705,229 747,860 982,744 1,079,989 1,250,162 1,446,981

Deferred (Unbilled) Revenue 0 0 152,710 -134,148 501,957 520,519 2,352,545 539,175 793,666 886,922 988,425 1,156,457 1,353,055

(2,421,917) -877,287 -358,789 -654,491 1,736,575 (153,992) 2,939,759 4,647,255 6,154,196 8,802,835 11,822,634 15,498,446 19,973,357

Investing Activities

Purchase of Property & Equipment 0 -5,063 -28,884 0 -7,308 (41,255) (47,856) (4,420) (292) (18) (1) (0) (0)

Purchase of Intangibles -86,001 0 0 0 0 - (1,160,165) (1,070,100) (987,026) (910,401) (839,725) (774,536) (714,407)

Business Acquisition -3,335,529 0 -3,331,084 0 149,885 (3,181,199) (8,774,190) - - - - - -

Redemption of Short-Term Investments & 0 0 0 0 0 - - - - - - - -

Total Cash From Investing Activities -3,421,530 -5,063 -3,359,968 0 142,577 (3,222,454) (9,982,211) (1,074,519) (987,318) (910,419) (839,726) (774,536) (714,407)

Financing Activities

Proceeds from Loan 0 0 5,016,223 -175,848 1,454,766 6,295,141 12,500,000 - - - - - -

Operating Line (Repayment) -1,162,104 783,917 -473,672 389,600 -699,845 - (142,891) (131,799) (121,567) (112,129) (103,425) (95,396) (87,990)

Repayment of Loan -194,440 -108,060 108,060 0 -1,886,477 (1,886,477) (3,155,449) (3,145,784) (2,901,571) (2,676,316) (2,468,549) (2,276,911) (2,100,150)

Issue of Equity 7,473,438 0 0 223,517 -109,427 114,090 - - - - - - -

Total Cash From Financing Activities 6,116,894 675,857 4,650,611 437,270 6,069,516 11,833,254 9,201,660 (3,277,582) (3,023,138) (2,788,446) (2,571,974) (2,372,307) (2,188,140)

Net Increase in Cash 273,447 -206,493 931,854 -217,221 7,948,668 8,456,808 2,159,208 295,153 2,143,740 5,103,970 8,410,934 12,351,604 17,070,810

Beginning Cash 1 273,448 66,955 998,809 781,588 273,448 8,730,256 10,889,464 11,184,617 13,328,358 18,432,328 26,843,262 39,194,866

Ending Cash 273,448 66,955 998,809 781,588 8,730,256 8,730,256 10,889,464 11,184,617 13,328,358 18,432,328 26,843,262 39,194,866 56,265,676

Total Cash Provided By Operating

Activities




Quisitive Technology Solutions, Inc. – Tear Sheet (QUIS-TSXV, SPEC BUY, C$0.95 PT)

Source: Consensus Data - FactSet, Historicals- Company Filings, Forecasts/Estimates-Echelon Wealth Partners estimates

Company Description Consensus Current Return

Rating: Spec Buy

Target: 0.95$ 36%

Median: 0.95$ 36%

High: 0.95$ 36%

Low: 0.95$ 36%

Buy 1Hold 0

Sell 0

# of Ratings 1

Financial Summary/Key Metrics 2017 2018 Q119 Q219 Q319 Q419 2019 2020E 2021E 2022E Top Inst. Ownership % Held

Revenue 12.61 4.01 4.18 5.34 5.40 18.53 47.13 53.43 63.69 -- --

Total Revenue 12.61 4.01 4.18 5.34 5.40 18.53 47.13 53.43 63.69

Growth y/y 30% 65% 38% 243% 154% 13% 19%

Consensus

Adj. EBITDA (0.95) 0.22 0.26 0.86 0.32 1.27 6.83 8.55 10.19

Growth y/y -233% 438% 25% 19%

Diluted EPS (0.09) (0.01) (0.02) (0.01) (0.04) (0.08) 0.00 0.02 0.03

Growth y/y -11% -100% 6840% 76%

Cash 0.27 0.07 1.00 0.78 1.42 1.42 10.89 11.18 13.33

Net Debt 6.39 8.49 17.52 23.00 24.29 24.29 24.02 20.45 15.28

CAPEX 0.09 0.01 0.03 - 0.01 0.04 1.21 1.07 0.99

Key Statistics Value

52 Wk High 0.85

Balance Sheet 2018 Q119 Q219 Q319 Q419 2019 2020E 2021E 2022E 52 Wk Low 0.07

Cash 0.27 0.07 1.00 0.78 1.42 1.42 10.89 11.18 13.33 YTD Chg. 164%

Trade & Other Receivables 1.40 1.95 2.57 3.23 3.96 3.96 6.26 7.20 8.58 1 Yr. Chg. 200%

Inventory 0.51 0.46 0.29 0.23 0.20 0.20 0.29 0.34 0.39 Beta 11.3

Total Current Assets 2.38 2.76 4.40 4.89 13.43 13.43 25.82 27.46 31.25 Market Cap 55.3

EV 81.0

Total Assets 13.26 14.30 32.07 31.86 39.30 39.30 58.88 59.73 62.85 Shares Outstanding 109.8

LTM Dividend 0

Trade & Other Payables 2.11 1.86 7.65 2.70 4.40 4.40 4.38 5.09 5.83 Dividend Yield

Deferred Revenue - - 1.64 1.51 1.24 1.24 3.59 4.13 4.93

Total Current Liabilities 8.77 9.74 13.84 14.34 25.23 25.23 26.05 25.89 26.14 Valuation 2018 2019

EV/Rev 6.4 4.4

Total Liabilities 8.77 10.42 27.85 28.04 40.63 40.63 52.17 50.13 48.65 EV/EBITDA NM 63.8

Total Liabilities & Shareholders Equity 13.26 14.30 32.07 31.86 39.30 39.30 51.57 52.42 55.54 P/E NM NM

Comparables

Multiples Analysis 1 Week 1 Month 3 Month YTD 1 Year 2019 2020 2019 2020 2019 2020

QUIS-CA 0.70 0.95 0.0% 6% 83% 120% 164% 200% 19 47 1.3 6.8 (0.04) 0.00

PRFT 34.72 40.5 0.0% 12% 39% -31% -25% 19% 566 579 95 98 2.07 2.09

CTSH 59.23 58.3 1.5% 13% 27% -6% -4% -18% 16,783 16,561 3,165 3,067 3.99 3.70

EPAM 223.43 225.2 0.0% 11% 28% -4% 5% 26% 2,294 2,670 427 475 5.42 5.85

GLOB 118 118.5 0.0% 13% 38% -6% 11% 44% 659 772 132 154 2.29 2.43

EXLS 65.53 64.8 0.0% 23% 26% -11% -6% 5% 991 1,011 137 145 3.09 3.19

Comparables EV

Multiples Analysis 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021

QUIS-CA 81 NM NM NM 4.37 1.72 1.52 63.80 11.86 9.47 NM 2,424.40 34.93

PRFT 1,206 NM 6.3% 7% 2.13 NM 1.95 12.71 NM 10.78 16.8 16.7 14.60

CTSH 30,778 6.6% 6.0% 6% 1.83 NM 1.78 9.73 NM 9.17 14.5 15.7 14.29

EPAM 12,065 1.4% 2.5% 3% 5.26 4.52 3.70 28.22 25.41 19.93 40.8 37.8 30.06

GLOB 4,385 0.5% 1.2% 1% 6.65 5.68 4.66 33.28 28.46 22.51 50.5 47.5 35.72

EXLS 2,152 4.8% 4.2% 5% 2.17 2.13 1.95 15.70 14.82 12.70 NM 19.3 16.99

FCF Yield EV/Rev EV/EBITDA P/E

Consensus Distribution

EBITDA (US$M) EPS (US$M)

Quisitive is a digital technology consulting firm whose mission it is to acquire and integrate companies

to become a leading provider of Microsoft professional services in North America. Quisitive is one of

35 companies that have earned the designation of “National Solution Provider” or NSP. Most

National Solutions Providers are regionally based and have limited ability to expand services to scale

to Microsoft’s addressable market. Quisitive plans to create its own tier within the NSP designation

as the premier Microsoft Solution Provider in North America, providing scale through acquisition

to address the growing demand for Microsoft Azure based services.

Price Target Div YieldReturn Rev (US$M)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20

Vo

lum

e (M

)

Pric

e (C

$)




Important Information and Legal Disclaimers

Echelon Wealth Partners Inc. is a member of IIROC and CIPF. The documents on this website have been prepared for the viewer only as an example of strategy consistent with

our recommendations; it is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investing strategy.

Any opinions or recommendations expressed herein do not necessarily reflect those of Echelon Wealth Partners Inc. Echelon Wealth Partners Inc. cannot accept any trading

instructions via e-mail as the timely receipt of e-mail messages, or their integrity over the Internet, cannot be guaranteed. Dividend yields change as stock prices change, and

companies may change or cancel dividend payments in the future. All securities involve varying amounts of risk, and their values will fluctuate, and the fluctuation of foreign

currency exchange rates will also impact your investment returns if measured in Canadian Dollars. Past performance does not guarantee future returns, investments may

increase or decrease in value and you may lose money. Data from various sources were used in the preparation of these documents; the information is believed but in no way

warranted to be reliable, accurate and appropriate. Echelon Wealth Partners Inc. employees may buy and sell shares of the companies that are recommended for their own

accounts and for the accounts of other clients.

Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of

Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.

Research Dissemination Policy: All final research reports are disseminated to existing and potential clients of Echelon Wealth Partners Inc. simultaneously in electronic form.

Hard copies will be disseminated to any client that has requested to be on the distribution list of Echelon Wealth Partners Inc. Clients may also receive Echelon Wealth Partners

Inc. research via third party vendors. To receive Echelon Wealth Partners Inc. research reports, please contact your Registered Representative. Reproduction of any research

report in whole or in part without permission is prohibited.

Canadian Disclosures: To make further inquiry related to this report, Canadian residents should contact their Echelon Wealth Partners professional representative. To effect

any transaction, Canadian residents should contact their Echelon Wealth Partners Investment advisor.

U.S. Disclosures: This research report was prepared by Echelon Wealth Partners Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian

Investor Protection Fund. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. Echelon Wealth Partners

Inc. is not registered as a broker-dealer in the United States and is not be subject to U.S. rules regarding the preparation of research reports and the independence of research

analysts. Any resulting transactions should be effected through a U.S. broker-dealer.

U.K. Disclosures: This research report was prepared by Echelon Wealth Partners Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian

Investor Protection Fund. ECHELON WEALTH PARTNERS INC. IS NOT SUBJECT TO U.K. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE

INDEPENDENCE OF ANALYSTS. The contents hereof are intended solely for the use of, and may only be issued or passed onto persons described in part VI of the Financial

Services and Markets Act 2000 (Financial Promotion) Order 2001. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities

discussed herein.

Copyright: This report may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever, nor may the information,

opinions or conclusions contained in it be referred to without in each case the prior express written consent of Echelon Wealth Partners.

ANALYST CERTIFICATION

Company: Quisitive Technology Solutions, Inc. | QUIS:TSXV

I, Rob Goff, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will

not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report. IMPORTANT DISCLOSURES

Is this an issuer related or industry related publication? Issuer

Does the Analyst or any member of the Analyst’s household have a financial interest in the securities of the subject issuer?

If Yes: 1) Is it a long or short position? No position; and, 2) What type of security is it? None. No

The name of any partner, director, officer, employee or agent of the Dealer Member who is an officer, director or employee of the issuer, or who serves in any advisory

capacity to the issuer. None

Does Echelon Wealth Partners Inc. or the Analyst have any actual material conflicts of interest with the issuer? No

Does Echelon Wealth Partners Inc. and/or one or more entities affiliated with Echelon Wealth Partners Inc. beneficially own common shares (or any other class of common

equity securities) of this issuer which constitutes more than 1% of the presently issued and outstanding shares of the issuer? No

During the last 12 months, has Echelon Wealth Partners Inc. provided financial advice to and/or, either on its own or as a syndicate member, participated in a public offering,

or private placement of securities of this issuer? No

During the last 12 months, has Echelon Wealth Partners Inc. received compensation for having provided investment banking or related services to this Issuer? No

Has the Analyst had an onsite visit with the Issuer within the last 12 months? No

Has any Analyst, Partner, Director or Officer been compensated for travel expenses incurred as a result of an onsite visit with the Issuer within the last 12 months? No

Has the Analyst received any compensation from the subject company in the past 12 months? No

Is Echelon Wealth Partners Inc. a market maker in the issuer’s securities at the date of this report? No




RATING DEFINITIONS

Buy The security represents attractive relative value and is expected to appreciate significantly from the current price over the next 12 month time

horizon.

Speculative Buy The security is considered a BUY but in the analyst’s opinion possesses certain operational and/or financial risks that are higher than average.

Hold The security represents fair value and no material appreciation is expected over the next 12-18 month time horizon.

Sell The security represents poor value and is expected to depreciate over the next 12 month time horizon.

Under Review While not a rating, this designates the existing rating and/or forecasts are subject to specific review usually due to a material event or share price

move.

Tender Echelon Wealth Partners recommends that investors tender to an existing public offer for the securities in the absence of a superior competing

offer.

Dropped

Coverage

Applies to former coverage names where a current analyst has dropped coverage. Echelon Wealth Partners will provide notice to investors

whenever coverage of an issuer is dropped.

RATINGS DISTRIBUTION

Recommendation Hierarchy Buy Speculative Buy Hold Sell Under Review Restricted Tender

Number of recommendations 44 32 12 1 11 0 4

% of Total (excluding Restricted) 44% 32% 12% 1% 11%

Number of investment banking relationships 13 14 13 5 0 3 0

% of Total (excluding Restricted) 40% 37% 14% 0% 9%

PRICE CHART, RATING & PRICE TARGET HISTORY

Date Target (C$) Rating

* 14-Aug-18 1.50 Spec Buy

26-Sep-18 1.00 Spec Buy

27-Nov-18 0.40 Spec Buy

06-Jun-19 0.46 Spec Buy

10-Feb-20 0.60 Spec Buy

03-Apr-20 0.70 Spec Buy

24-Apr-20 0.80 Spec Buy

01-May-20 0.95 Spec Buy

Coverage init iated: 08/14/2018 Data sourced from FactSet

*Prior analyst PT

$0.00

$0.50

$1.00

$1.50

$2.00

Quisitive Technology Solutions, Inc. (TSXV:QUIS)

Price Target (C$)




Toronto Wealth Management

1 Adelaide St East, Suite 2000

Toronto, ON M5C 2V9

416-572-5523

Toronto Capital Markets

1 Adelaide St East, Suite 2100

Toronto, Ontario M5C 2V9

416-572-5523

Montreal Wealth Management and Capital Markets

1000 De La Gauchetière St W., Suite 1130

Montréal, QC H3B 4W5

514-396-0333

Calgary Wealth Management

525 8th Ave SW, Suite 400

Calgary, AB T2P 1G1

403-218-3144

Calgary Wealth Management

123 9A St NE

Calgary, AB T2E 9C5

1-866-880-0818

Oakville Wealth Management

1275 North Service Road, Suite 612

Oakville, ON L6M 3G4

289-348-5936

Edmonton Wealth Management

8603 104 St NW

Edmonton, AB T6E 4G6

1-800-231-5087

London Wealth Management

235 North Centre Rd, Suite 302

London, ON N5X 4E7

519-858-2112

Ottawa Wealth Management

360 Albert St, Suite 800

Ottawa, ON K1R 7X7

613-907-0700

Vancouver Wealth Management and Capital Markets

1055 Dunsmuir St, Suite 3424, P.O. Box 49207

Vancouver, BC V7X 1K8

604-647-2888

Victoria Wealth Management

730 View St, Suite 210

Victoria, BC V8W 3Y7

250-412-4320

Saskatoon Wealth Management

402-261 First Avenue North

Saskatoon, SK S7K 1X2

306-667-2282


https://www.google.ca/maps/place/495+Richmond+St,+London,+ON+N6A+5A9/@42.9863997,-81.2532486,17z/data=!3m1!4b1!4m5!3m4!1s0x882ef20297d5471f:0x1d7293e608a772b0!8m2!3d42.9863997!4d-81.2510599

https://www.google.ca/maps/place/261+1st+Ave+N,+Saskatoon,+SK+S7K+1X2/@52.1317985,-106.66658,17z/data=!3m1!4b1!4m5!3m4!1s0x5304f6d9f27ecd6b:0xb3767cbd04efc485!8m2!3d52.1317985!4d-106.6643913

https://www.google.ca/maps/place/261+1st+Ave+N,+Saskatoon,+SK+S7K+1X2/@52.1317985,-106.66658,17z/data=!3m1!4b1!4m5!3m4!1s0x5304f6d9f27ecd6b:0xb3767cbd04efc485!8m2!3d52.1317985!4d-106.6643913

quisitive technology solutions inc. quis-tsxv: …...$47.1m/$6.8m and $53.4m/$8.5m, respectively. we...

Documents