Q3 2021 Shareholders Update

Hello Shareholders,

Print this update. Write the date on it and hang onto it. Your support has brought us to this point, and we are at a turning point for MPP Software. A lot has happened since my last update in early July. It has been a summer that has seen much change at MPP Software and yielded results from our efforts.

Revenue Diversification

We have successfully transitioned the company’s operating model from a pure software development company to an integrated solutions company. We have separate product lines we are supporting now – Eligere, MDGuest, Eligere Direct, LandNinja and Just Ring the Bell (JRTB). Each of the products is early in its lifecycle, but we are gaining cross-product benefits as they all share a similar codebase and value proposition, so improvements made in one solution are easily incorporated in the others. Moreover, by developing software flexibly and with future adaptation in mind, we are able to spin parallel product lines off a single code base (for example Eligere, MDGuest and Eligere Direct share the majority of the same code despite material differences in look and behaviour).

From a purely revenue standpoint, we have software subscription revenue from Eligere and Eligere Direct, a % of booking value from the MD guest, and dividend income as equity owners in the JRTB parent company. Beyond our software revenues, we are now generating ad sales, professional services (consulting) revenue each month, and some rental income for subletting a portion of our HQ space as an incubator space.

For our second fiscal year, which is the shortened period of May to December 2021, we have already invoiced over $300,000 in revenue, and are set to close our second fiscal year in December in a profitable position.

A/R and Pipeline

What we are “earning” and what we are collecting are two separate stories right now. Across both our grant payments and customer invoices we are seeing payment delays which are creating a challenging cashflow situation. This is being closely monitored, which is a key focus for the executive.

We have over $300K sitting in A/R right now, and another $200K worth of signed and committed contracts we will be invoicing before year-end (backlog). The pipeline beyond that is valued at over a million dollars, and our pipeline conversion rate right now is sitting around 70% once we qualify an opportunity sufficiently to add it to the pipeline. Most of that revenue and cash flow we won’t see until the 2022 fiscal year, but it does give a good indicator of the growth profile of the organization and our sales efforts are seeing us add to the pipeline faster than we convert opportunities.

Financing

The business has secured $260,000 in financing in the 2021 fiscal year to fund operations and growth activities through to FY2022. This was provided in the form of shareholder loans at a preferential interest rate compared to what we were being quoted from banks and other lenders. We expect to have these repaid in full within 12 months provided our revenue position continues to grow as planned.

There were no equity transactions involved in the procurement of these loans, and the business ownership and operating models remain unchanged.

If anyone is interested, 8.7MM shares of the business have been sold to date, with the remaining 1.3MM of the 10MM full capitalization set out in the incorporation documents unassigned and held by the organization. There are a handful of individual shareholder shares that present shareholders have indicated a willingness to sell, but otherwise, opportunities to invest in the company at this time are quite limited.

Products

Eligere

Eligere is in the throes of a rebranding exercise based on feedback from users about Eligere being difficult to remember and to spell. We will be launching this new branding officially before Christmas, along with a simplified marketing message to help users understand our position in the marketplace better.

Eligere Direct is a variant of Eligere developed in partnership with the hospitality industry and provides non-inventoried resorts with the ability to create and manage online bookings when there is only a single instance of each location. We are launching our first client on this new platform, Charmed Family Resorts, in two weeks. Based on the Charmed launch, we have additional resorts in our pipeline who have expressed interest in the solution once it is proven out.

MDGuest

MDGuest launched in June in partnership with members of the Canadian Medical Community who founded the “Canadian Physician Vacation Rentals” online community. MDGuest uses the Eligere back-end but allows authorized members of the community (who are all vetted to ensure they are active Canadian Physicians) to view and share properties within a private and secure space. This “semi-public” private community model has attracted interest from secure community groups in the US, other professional organizations in Canada, so the potential for future growth of this platform is high.

Just Ring the Bell

Just Ring the Bell, or JRTB, is in the final stages of testing and will be going through its commercial launch in early October.

CalTen Software

LandNinja is being co-developed in partnership with CalTen and industry partners out of Calgary. This paid development partnership will be a major focus of our revenue and technical efforts in 2022.

Consulting

MPP introduced a consulting offering earlier this fiscal year. Since its inception, we have signed a major consulting agreement with a financial services company serving Canada’s big 5 banks to assist them in their digital transformation roadmap.

MPP has also placed consultants with partners including JRTB and CalTen, which augments MPP’s revenue stream while providing our partners with a boost to organizational capacity in a cost-effective manner.

Lastly, while our support team ramps up in providing industry-leading service to our in-house clients, we have extended support agreements to key partners to provide the frontline service to their clients using our support model. This has been well received in the industry and is a strong recurring revenue stream for MPP that supplements our corporate license sales.

Summary

MPP Software has hit the tipping point and is a profitable company thus far in 2021. Cashflow from payment Arrears is creating some challenges managing the operations, but we have secured additional financing to help buffer this through to the end of this year. MPP has been nominated for several awards as we enter the fall business awards season, and we look forward to sharing updates on those with you in our Q4 update.

We will be hosting an AGM for our shareholders in the next few weeks, details on that will be announced separately. Thank you everyone for your ongoing support and please don’t hesitate to reach out if you have any questions at all about the business.

Regards,

Colin Moreland, CEO