EXHIBIT 10.1

 

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December 27, 2017

 

Dear Fellow Shareholders,

 

As the year draws to a close, I am proud to report that 2017 was another year of
phenomenal growth and development for our company as an emerging leader in
digital asset management, agile marketing, and sales enablement.

 

We made strong progress across the board, from major enterprise customer wins
and global deployments, to completing a strategic acquisition, receiving our
first U.S. patent, and becoming a public company. Without a doubt, it was our
most successful and productive year yet, and one that has laid a very solid
foundation for growth and market expansion for the year ahead.

 

New customer wins included a Fortune 50 global provider of aerospace and
building systems, the Super Bowl-winning Green Bay Packers, and Medici, a
leading innovator in healthcare led by former top executives from Amazon, Google
and 2nd.MD.

 

Major global launches of our platform included SAP Ariba, which operates the
world’s largest business network as a unit of the Fortune 200 company, SAP. We
also deployed FISION for the global financial services provider, Ameriprise, a
Fortune 500 company with more than 20,000 investment advisors nationwide.

 

FISION generates revenues from these SaaS deployments with contracts that are
usually three years in length and monthly subscription fees based on the number
of users and/or locations. While the integration of these large scale FISION
deployments have extended over several months, it is creating very deep and
‘sticky’ engagements that can provide consistent and widening recurring revenue
streams over time.

 

The Power of FISION

 

These new enterprise customers and deployments reflect the unique power and
value of our cloud-based SaaS platform. These customers chose FISION over a
myriad of other options because of how we enable their distributed sales and
marketing teams to efficiently create, store, distribute and measure
omni-channel marketing communication.

 

Moreover, our customers have discovered how FISION facilitates the real-time
customization and localization of collateral materials and communications in new
and powerful ways, while ensuring critical legal and brand compliance.

 

So Uniquely Powerful, its Patented

 

The underlying technology that delivers these benefits is so revolutionary and
transformative, in May we were awarded our first U.S. patent. The patent
recognizes the exceptional degree of innovation at the core of our platform, and
validates its unique value proposition for enterprise customers and channel
partners worldwide.

 

This patent also secures the basis of our shareholder value that we believe has
yet to be reflected in our market valuation. For those familiar with our
industry, they know that such methods of use patents are rare in our space and
therefore provides us a strong competitive barrier to entry. We continue to
strengthen and enhance our proprietary IP, and we have three additional patents
pending that truly set us apart from the competition.

 

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The industry has begun to take notice, and earlier this year we received the
prestigious 2017 SalesTech Award.

 

The award recognizes companies that demonstrate excellence, innovation, and
leadership in sales technology.

 

Channel Partners Opening Worldwide Opportunities

 

Today, every major enterprise in the world uses a CRM to manage their contacts,
and many use marketing automation tools to generate leads. However, finding
effective ways to manage content with greater efficiencies throughout the
customer buying journey is still a huge challenge for most enterprises, and even
for the marketing tech companies that support them. This is where FISION excels.

 

One of our active channel partners includes Marketo, a recognized world leader
in engagement marketing software and solutions. Marketo helped us land
Ameriprise, where we are now solving major pain points in terms of brand
management and regulatory compliance with their distributed network of 20,000
registered representatives.

 

Given how we fill critical space in their service offerings, Marketo appointed
FISION as a global LaunchPoint Partner. They have continued to sell alongside us
to win new business, and we are currently addressing the needs of a large global
manufacturer.

 

This fall we announced a strategic partnership with iris Chicago, part of the
award-winning iris global creative network. The alliance combines our engagement
marketing platform and measurement capabilities with iris Chicago’s strengths in
creative execution, strategy, data and analytics.

 

iris Chicago works with some renowned clients like Samsung and HP, where
improving local communications and empowering distributed sales and marketing
teams with better tools is essential. They want their clients to take advantage
of how FISION can simplify brand distribution, provide better social
integration, and put more data behind customer interactions through
‘insight-driven engagement.’

 

Brands that already use FISION will now have access to iris Chicago’s fully
integrated approach, mixing the best in creativity, strategy, and technology to
drive greater impact at every stage in their go-to-market lifecycle. With iris
Chicago, FISION has established a global reseller network with worldwide client
opportunities.

 

Instrumental in creating and leading these important channel partner
relationships has been our Chief Revenue Officer Jason Mitzo, who brought to
FISION existing relationships with some of the world’s top brands, including
Ariba, Aveda, Crowne Plaza Hotels, InterContinental Hotels Group, SAP,
Mitsubishi Motors and others.

 

Before joining FISION, Jason was a successful team leader at Oracle, with Oracle
Eloqua now another important FISION channel partner. His talent for building
important relationships and attracting customer interest in our offerings has
proven invaluable for our successful transition from SMB to major enterprise
sales.

 

Land & Expand

 

Another key element to our go-to-market strategy has been the expansion of
FISION within a customer’s enterprise after deploying for a department or
subsidiary. We are finally seeing this approach gaining traction with several
enterprise customers.

 

We actively engage in expanding our deployment with Discovery Holdings, a global
provider of financial and insurance products that serves more than 5 million
clients across the U.S., United Kingdom, South Africa, China, Singapore, and
Australia. For Discovery, our ability to localize communications, including for
multiple languages and geographical regions, has been a key differentiator among
our competition. As part of this process, we have introduced our channel
partner, Marketo, who brings complementary solutions, further strengthening this
relationship.

 

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We are also advancing a number of other land and expand opportunities, including
with a leading global wholesaler of mutual funds that is a subsidiary of one of
our existing clients. Like with SAP Ariba and other clients, we have a master
agreement with its parent company that paves the way for adoption by other units
or departments within the parent organization.

 

Our sales pipeline of new enterprise customers continues to expand, with many
now entering the final stages leading to engagement. We see this pipeline
growing wider as we introduce a number of scheduled product enhancements
designed to make our offerings even more essential to our customers’ operational
and marketing success.

 

Successful M&A

 

In April, we acquired a local Minneapolis-based company, Volerro, a recognized
leader in cloud-based content collaboration and agile marketing technology. They
brought to FISION two major enterprise clients that included a top five U.S.
bank (also based in Minneapolis), and Shopko Stores, a $3.2 billion U.S.
retailer operating 363 stores across 24 states. Volerro enhances the FISION
platform with complementary cloud-based collaboration, agile marketing, and
sales enablement software.

 

We can now offer the full range of agile marketing capabilities, from ideation
and creation, to distribution and local sales enablement. FISION users will be
able to act smarter, faster, nimbler, and more efficiently to drive revenues and
win in the marketplace.

 

Given our enhanced value proposition with Volerro, we are seeing broader and
more easily-accessible sales opportunities that can deliver incremental
recurring revenue growth for both FISION and our channel partners. Volerro’s
easy-to-deploy, cloud-based service also creates a new entry point for ‘landing
and expanding.’

 

One such opportunity materialized recently with the Volerro win of Green Bay
Packers, which has now expanded into discussions for a full FISION platform
deployment. The same has been true with the preexisting Volerro clients who are
now progressing through the stages of evaluation that typically lead to adoption
of the FISION platform.

 

We are continuing to identify and explore other acquisition targets that could
provide complementary technology and accretive earnings potential.

 

Foundation Building

 

Throughout the year, we have made improvements to our balance sheet in terms of
reducing debt and improving working capital. Much credit is due to our expert
capital market advisors and several highly-supportive investors who recognize
our unrealized potential and share our vision for the future.

 

To provide greater liquidity and transparency for our shareholders, in March we
became a fully reporting, publicly traded company. As anticipated, this has
enhanced our visibility in the capital markets and attracted new investors.

 

Our Chief Technology Officer and Chief Product Officer, Wade Anderson, has been
leading a transformation in our operational infrastructure to prepare us for the
growth ahead. A key change includes our migration to Microsoft’s Azure Cloud.
This state-of-the-art cloud data service has lowered our IT costs and improved
security and reliability, while supporting virtually unlimited scalability
globally without additional capex.

 

Wade is responsible for our product strategy, overall systems architecture, and
user experience, as well as building teams and project execution. He brings to
FISION an exceptional record of leading SMB and enterprise companies through
software development, systems architecture, and program delivery. With an MBA,
Summa Cum Laude, in Technology Application Management, he has served
organizations like Accenture, Best Buy, and the State of Minnesota.

 

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As part of our strengthening foundation, we’ve moved our headquarters to an
iconic building in the heart of Minneapolis. Our neighbors include some of the
most progressive brands in the tech space. The new location supports our efforts
to hire the best in the tech space and continue creating the positive corporate
culture that earned us the “Best Places to Work” award from the Minneapolis/St.
Paul Business Journal, and the “Best Company to Work For” award from Minnesota
Business Magazine, both received earlier this year.

 

Strengthening Fundamentals

 

We are ending 2017 with more than 65,000 users across 21 countries, servicing
enterprise clients in the health care, hospitality, financial/insurance,
software and technology industries.

 

Our annualized recurring revenue under contract doubled over the course of 2017.
Recurring revenue now represents about 71% of our overall revenue, with the
one-time setup fees representing the balance.

 

Our average contract value has also expanded over the year, with the total
contract value of all of our engagements, based on a typical three-year
agreement, now at more than $2.6 million.

 

Gross margins also expanded from 79% to 82% during the course of the year. Our
cloud-based SaaS revenue model is inherently scalable, with low capex
requirements that provide strong leverage in our model. Along with a number of
major engagements that are entering full deployment, we expect these healthy
margins to support positive cash-flow in the latter half of 2018.

 

While our revenue growth is still in the early stages, the foundation we’ve
established as a small, Minneapolis-based company in terms of our marquee global
customers, industry partners, and patented, award-winning technology is truly
phenomenal by any measure. We are now well on course for strong, profitable
growth over the months and years to come.

 

Looking Ahead

 

When I reflect on how far we have come over the last year, and how much further
we will go in the next, I couldn’t be more excited and optimistic. Now that we
have successfully transitioned to winning large enterprise customers, we are now
seeing unprecedented opportunity on a global scale. Our active sales pipeline is
approaching nearly $16 million in total contract value, much of which we are
confident of closing in 2018.

 

We anticipate the customer deployments currently underway will keep us on track
to realize significant gains in recurring revenue in the first quarter of 2018.
We see this momentum continuing to build throughout the year as new customers
come online, and existing customers expand their deployments of FISION and our
new Volerro offerings.

 

On behalf of the entire FISION team, I thank you for your continued
encouragement and support, and wish you great health and prosperity in the New
Year.

 

Very truly yours,

 

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Michael Brown

President & CEO

 

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Important Cautions Regarding Forward-looking Statements

 

Any statements contained in this 8-K filing that are not historical facts are
forward-looking statements as defined in the U.S. Private Securities Litigation
Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,”
“forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will”
and similar expressions as they relate to FISION Corporation or (the “Parties”)
are intended to identify such forward-looking statements. The Parties undertake
no obligation to publicly update or revise any forward-looking statements. All
forward-looking statements are subject to various risks and uncertainties that
could cause actual results to differ materially from expectations. The factors
that could affect future financial results are discussed more fully in the
Parties’ respective filings with the U.S. Securities and Exchange Commission
(“SEC”), including the their most recent Annual Report on filed with the SEC.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates.

 

 

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