News Column

Cachet Financial Solutions Reports Second Quarter 2014 Results

August 12, 2014

MINNEAPOLIS, MN -- (Marketwired) -- 08/12/14 -- Cachet Financial Solutions, Inc. (OTCQB: CAFN), a leading provider of cloud-based SaaS and mobile money management technology to banks, credit unions and other financial services organizations, reported results for the second quarter ended June 30, 2014.

Q2 2014 Operational Highlights

•Partnered with Navy Federal Credit Union, the world's largest credit union with more than $60 billion in assets and five million members, to implement a mobile money management tool geared towards students. •Selected by FirstView Financial, a leading prepaid debit card processor and program manager, to develop a prepaid mobile application for its cardholders. •The Bancorp, the creator of customized banks for hundreds of affinity partners, implemented Cachet's CheckRisk Pro™, an innovative new tool for mitigating risk in remote deposit capture (RDC) programs.

Q2 2014 Performance Indicatorsfor RDC Solutions


vs. Q1 vs. Q2 Q2 2014 2014 Change 2013 Change ------------------------------------------ Mobile Transactions 762,910 634,856 20% 209,737 264% Merchant Customers 408 364 12% 344 19% Products Sold 286 258 11% 184 55% Live Product Implementations 182 149 22% 75 143%




Q2 2014 Financial Results

Revenue in the second quarter of 2014 increased 120% to $609,000 from $277,000 in the same year-ago quarter. The increase was primarily driven by growing adoption of the company's Select Mobile™ RDC solutions.

Cost of revenues in the second quarter of 2014 totaled $716,800, an increase of 8% from $666,200 in the same year-ago period. The increase was primarily due to higher amortization expense associated with the intangible assets acquired with the Select Mobile Money acquisition in March 2014.

Net loss in the second quarter of 2014 totaled $4.2 million or $(0.65) per basic and diluted share, compared to a net loss of $2.8 million or $(0.69) per basic and diluted share in the second quarter of 2013.

Adjusted EBITDA loss (a non-GAAP term defined as net loss before interest, taxes, depreciation, amortization, and stock-based compensation, as well as other non-recurring items) for the second quarter of 2014 totaled $2.3 million compared to an adjusted EBITDA loss of $1.7 million in the same year-ago period (see further discussion about the use of adjusted EBITDA, below).

Management Commentary

"In the second quarter of 2014, we produced 120% year-over-year topline revenue growth, as well as increased the number of products sold by 55% to 285," said Jeffrey Mack, president and CEO of Cachet Financial Solutions. "This performance reflects our focus on selling more products and diversifying our revenue base, including adding key customers like FirstView, The Bancorp, and Navy Federal Credit Union. The strong increase in mobile transactions also speaks to our growing, highly-valuable recurring revenue stream.

"Maintaining this momentum, we recently partnered with a top five commercial bank in the U.S. to implement a prepaid mobile platform for one of the world's largest supermarket chains. We believe this major win reaffirms the strong value proposition of our Select Mobile Money platform, and particularly its unique features and capabilities that enhance the experience of the banking consumer.

"We believe that mobile functionality has quickly become an essential component to the financial services industry, and that Cachet is at the forefront of this trend with the most secure and robust technology offered in the market today. In fact, more than 2,000 U.S. banks now offer mobile check deposit, which has increased 100% over the last year, and among these banks, about 10% now rely on Cachet for these services.

"Looking ahead, our expectations for 2014 remain high as we build upon these successes and address the widening pipeline of opportunities ahead. As demand for mobile banking technologies continues to build, we are well positioned with industry-leading solutions and a strengthening customer base. We believe these key factors and strong industry tailwinds will help us expand our market share and continue to drive strong revenue growth in the quarters ahead."

Conference Call

Cachet Financial Solutions will hold a conference call today (August 12, 2014) at 4:30 p.m. Eastern time (3:30 p.m. Central time) to discuss these results. Cachet's president and CEO, Jeffery Mack, and EVP and CFO, Darin McAreavey, will host the presentation, followed by a question and answer period.

Date: Tuesday, August 12, 2014

Time: 4:30 p.m. Eastern time (3:30 p.m. Central time)

U.S. dial-in: 1-877-705-6003

International dial-in: 1-201-493-6725

The call will be webcast live and available for replay at http://public.viavid.com/index.php?id=110261.

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through September 12, 2014.

U.S. replay dial-in: 1-877-870-5176

International replay dial-in: 1-858-384-5517

Replay ID: 13588947

About Cachet Financial Solutions, Inc.

Cachet Financial Solutions is a leading cloud-based, SaaS technology provider serving the financial services industry with mobile money management and remote deposit capture solutions for PC, Mac and mobile. The company's industry-leading solutions help clients to increase customer/member engagement, grow revenues and gain competitive advantage. Cachet's cloud-based technology platform simplifies development, deployment and servicing of consumer and commercial solutions -- minimizing cost and accelerating speed-to-market and ROI. Enabled by Cachet's complete suite of business and consumer solutions, financial institutions can better serve the needs of all their customers or members. For more information, visit www.cachetfinancial.com.

Use of Non-GAAP Information

In evaluating the Company's financial performance and operating trends, management considers information concerning the Company's net sales, adjusted gross margins, adjusted operating expenses, and adjusted EBITDA, among other items, which are not calculated in accordance with generally accepted accounting principles ("GAAP") in the United States of America. The Company's management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods and for the evaluation of financial results. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method the Company uses to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this release and can also be found on the Company's website at www.cachetfinancial.com.

Forward-Looking Statements

This press release contains certain statements that would be deemed "forward-looking statements" under Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and includes, among other things, discussions of our business strategies, future operations and capital resources. Words such as "may," "likely," "anticipate," "expect" and "believes" indicate forward-looking statements.

These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.

Forward-looking statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. We discuss many of these risks in greater detail in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014 under the heading "Risk Factors" and in the other reports we file with the Commission. Given these uncertainties, you should not attribute undue certainty to these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this press release. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.


CACHET FINANCIAL SOLUTIONS, INC. CONSOLIDATED BALANCE SHEETS As of -------------------------- June 30, December 31, 2014 2013 ------------ ------------ ASSETS (unaudited) (audited) CURRENT ASSETS Cash and cash equivalents $ 29,465$ 150,555 Accounts receivable, net 312,009 329,557 Deferred commissions 76,360 62,732 Prepaid expenses 598,855 487,659 ------------ ------------ TOTAL CURRENT ASSETS 1,016,689 1,030,503 PROPERTY AND EQUIPMENT, net 269,838 353,420 GOODWILL 204,000 - INTANGIBLE ASSETS, NET 1,743,751 - DEFERRED COMMISSIONS 109,460 101,468 DEFERRED FINANCING COSTS 143,627 107,936 ------------ ------------ TOTAL ASSETS $ 3,487,365$ 1,593,327 ============ ============ LIABILITIES AND SHAREHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable $ 1,637,863$ 937,201 Accrued expenses 961,931 153,112 Accrued interest 1,674,096 1,953,502 Deferred revenue 543,263 510,319 Current portion of long-term debt 9,823,181 3,170,672 ------------ ------------ TOTAL CURRENT LIABILITIES 14,640,334 6,724,806 LONG TERM DEBT, net of current portion 3,324,486 3,933,253 WARRANT LIABILITY 209,000 309,000 DEFERRED REVENUE 435,265 401,758 ACCRUED INTEREST 95,664 95,270 ACCRUED RENT 44,333 61,482 ------------ ------------ TOTAL LIABILITIES 18,749,082 11,525,569 ------------ ------------ COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' DEFICIT Capital Stock, $.0001 Par Value, 520,000,000 shares authorized Preferred shares - 20,000,000 shares authorized, None issued and outstanding - - Common shares - 500,000,000 shares authorized, 666 563 6,665,276 and 5,625,957 issued and outstanding ADDITIONAL PAID-IN-CAPITAL 28,457,365 26,668,258 ACCUMULATED DEFICIT (43,719,748) (36,601,063) ------------ ------------ TOTAL SHAREHOLDERS' DEFICIT (15,261,717) (9,932,242) ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 3,487,365$ 1,593,327 ============ ============ CACHET FINANCIAL SOLUTIONS, INC. CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended Six Months Ended -------------------------- -------------------------- June 30, June 30, June 30, June 30, 2014 2013 2014 2013 ------------ ------------ ------------ ------------ REVENUE $ 608,917$ 276,527$ 1,085,399$ 470,734 COST OF REVENUE 716,765 666,151 1,335,294 1,290,804 ------------ ------------ ------------ ------------ GROSS LOSS (107,848) (389,624) (249,895) (820,070) ------------ ------------ ------------ ------------ OPERATING EXPENSES Sales and Marketing 657,927 496,260 1,192,148 1,208,241 Research and Development 658,734 214,915 1,010,806 501,055 General and Administrative 1,138,038 846,660 2,156,228 1,948,650 ------------ ------------ ------------ ------------ TOTAL OPERATING EXPENSES 2,454,699 1,557,835 4,359,182 3,657,946 ------------ ------------ ------------ ------------ OPERATING LOSS (2,562,547) (1,947,459) (4,609,077) (4,478,016) INTEREST EXPENSE 1,731,755 885,731 2,496,701 2,033,851 INDUCEMENT TO CONVERT DEBT AND WARRANTS - - 7,906 674,414 SHARE PRICE / CONVERSION ADJUSTMENT - - - 1,710,475 OTHER (INCOME) EXPENSE (47,500) (53,763) 5,001 31,475 ------------ ------------ ------------ ------------ NET LOSS $ (4,246,802)$ (2,779,427)$ (7,118,685)$ (8,928,231) ============ ============ ============ ============ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic and fully diluted 6,536,602 4,040,887 6,328,419 3,299,797 Net loss per common share - basic and fully diluted $ (0.65)$ (0.69)$ (1.12)$ (2.71) CACHET FINANCIAL SOLUTIONS, INC. SUPPLEMENTAL INFORMATION (Unaudited) Reconciliation of Net Loss to Adjusted EBITDA Three Months Ended Six Months Ended ------------------------ ------------------------ June 30, June 30, June 30, June 30, 2014 2013 2014 2013 ----------- ----------- ----------- ----------- Net loss, as reported $(4,246,802)$(2,779,427)$(7,118,685)$(8,928,231) Interest expense 1,731,755 885,731 2,496,701 2,033,851 Inducement of convert debt and warrants - - 7,906 674,414 Share Price / Conversion Adjustment - - - 1,710,475 Depreciation and Amortization 191,743 125,039 298,287 205,329 Share-based compensation 38,699 97,403 85,209 535,373 ----------- ----------- ----------- ----------- Adjusted EBITDA $(2,284,605)$(1,671,254)$(4,230,582)$(3,768,789) ----------- ----------- ----------- -----------



Contact Information: Darin McAreavey EVP & CFO Cachet Financial Solutions 952.698.5214 Email Contact Investor Relations: Matt Glover or Michael KoehlerLiolios Group, Inc. 949.574.3860 Email Contact



Source: Cachet Financial Solutions


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