Document:

EX-4.2

 Exhibit 4.2 

Nuvei Corporation 
 Consolidated Financial Statements 

Years ended December 31, 2020 and 2019 
 (in
thousands of US dollars) 

 

 

     

  
     

 Independent auditor’s report 

To the Shareholders of Nuvei Corporation 
  

 
 Our opinion

 In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Nuvei Corporation
and its subsidiaries (together, the Company) as at December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board (IFRS). 
 What we have audited 
 The
Company’s consolidated financial statements comprise: 
  

	·	 	the consolidated statements of financial position as at December 31, 2020 and 2019; 

  

	·	 	the consolidated statements of profit or loss and comprehensive loss for the years then ended; 

  

	·	 	the consolidated statements of cash flows for the years then ended; 

  

	·	 	the consolidated statements of changes in equity for the years then ended; and 

  

	·	 	the notes to consolidated financial statements, which include significant accounting policies and other explanatory information. 

  

 
 Basis for opinion 

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. 
 We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion. 
 Independence 

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have
fulfilled our other ethical responsibilities in accordance with these requirements. 
 PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l. 

1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1

 T: +1 514 205 5000, F: +1 514 876 1502 

“PwC” refers to PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l., an Ontario limited liability partnership.

 

 

 
  

     

  
  

Key audit matters 
 Key audit
matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 
  

					
			
	  Key audit matter	 		 	 How our audit addressed the key audit

matter

			
	 Valuation of intangible assets acquired in the Smart2Pay Technology & Services B.V. (Smart2Pay)
business combination
	 		 	 Our approach to address the matter included the following procedures, among others:

			
	 Refer to note 2 – Basis of preparation and note 4 – Business acquisitions to the consolidated financial
statements. 
  
 On November 2, 2020, the Company acquired
Smart2Pay for a total cash consideration of $81.9 million, subject to closing adjustments, and 6,711,923 Subordinate Voting Shares issued from the Company’s treasury at a fair value of $37.95 per share, which is based on the quoted price
of the Subordinate Voting Shares on the Toronto Stock Exchange (TSX) on the closing date. The fair value of the intangible assets acquired included $103.5 million of partner and merchant relationships and $63.1 million of technologies.
Management applied critical judgment in determining the fair value of the intangible assets.
  

To estimate the fair value of the intangible assets, management used the excess earnings method to value partner and merchant relationships and the
royalty relief method to value technologies using discounted cash flow models. Management developed significant assumptions related to revenue and gross margin forecasts, partner and merchant attrition rates, royalty rates and discount
rates.
	 		 	
· Tested how management
estimated the fair value of the intangible assets, which included the following:
  

–   Read the purchase agreement.
  

–   Evaluated the appropriateness of management’s excess earnings and royalty relief methods and
discounted cash flow models and tested the mathematical accuracy thereof.
  

–   Tested the underlying data used by management in the discounted cash flow models.

 
 –   Evaluated the reasonableness of
assumptions developed by management related to revenue and gross margin forecasts and attrition rates by considering the past performance of Smart2Pay and similar prior acquisitions made by the Company.

 
 –   Evaluated the reasonableness of
assumptions used by management related to royalty rates by comparing to similar prior acquisitions made by the Company and industry data.

  

 

 

 

 
  

     

  

					
			
	  Key audit matter	 		 	 How our audit addressed the key audit

matter

			
	 We considered this a key audit matter due to the critical judgment applied by management in estimating the fair value of the
intangible assets, including the development of assumptions. This, in turn, led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to the significant assumptions used by
management. The audit effort involved the use of professionals with specialized skill and knowledge in the field of valuation.
	 		 	 Professionals with specialized skill and knowledge in the field of valuation assisted in evaluating the appropriateness of
management’s excess earnings and royalty relief methods and discounted cash flow models, as well as certain assumptions such as discount rates.

  
  

 
  

Other information 
 Management is
responsible for the other information. The other information comprises the Management’s Discussion and Analysis, which we obtained prior to the date of this auditor’s report and the information, other than the consolidated financial
statements and our auditor’s report thereon, included in the annual report, which is expected to be made available to us after that date. 
 Our opinion on the
consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. 
 In connection with our audit
of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. 
 If, based on the work we have performed on the other information that we obtained
prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the information, other than the
consolidated financial statements and our auditor’s report thereon, included in the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

 

 

 
  

     

  
  

 
 Responsibilities of management and
those charged with governance for the consolidated financial statements 
 Management is responsible for the preparation and fair presentation of the
consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to
fraud or error. 
 In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. 

Those charged with governance are responsible for overseeing the Company’s financial reporting process. 

 
  

Auditor’s responsibilities for the audit of the consolidated financial statements 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements. 
 As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also: 
  

	·	 	Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control. 

  

	·	 	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control. 

  

	·	 	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

 

 

 
  

     

  
  

	·	 	Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern. 

  

	·	 	Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation. 

  

	·	 	Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 

 We communicate
with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 
 From the matters
communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication. 
 The engagement partner on the audit resulting in this
independent auditor’s report is Michel Larouche. 
 /s/ PricewaterhouseCoopers LLP 

Montréal, Quebec 
 March 9, 2021

 

 Nuvei Corporation 

Consolidated Statements of Financial Position 

As at December 31, 2020 and 2019 
  

(in thousands of US dollars) 
  

													
	 	  	Note	 	  	 2020

$
	 	 	 2019

$
	 
	 Assets
	  				  				 			
	 Current assets
	  				  				 			
	 Cash
	  	 	28	 	  	 	180,722	 	 	 	60,072	 
	 Trade and other receivables
	  	 	5	 	  	 	32,055	 	 	 	32,765	 
	 Inventory
	  	 	6	 	  	 	80	 	 	 	709	 
	 Prepaid expenses
	  				  	 	4,727	 	 	 	2,268	 
	 Income taxes receivable
	  	 	18	 	  	 	6,690	 	 	 	—  	 
	 Current portion of advances to third parties
	  	 	9	 	  	 	8,520	 	 	 	8,901	 
	 Current portion of contract assets
	  				  	 	1,587	 	 	 	1,720	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total current assets before segregated funds
	  				  	 	234,381	 	 	 	106,435	 
	 Segregated funds
	  				  	 	443,394	 	 	 	200,612	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total current assets
	  				  	 	677,775	 	 	 	307,047	 
	 Non-current assets
	  				  				 			
	 Advances to third parties
	  	 	9	 	  	 	38,478	 	 	 	42,584	 
	 Property and equipment
	  	 	7	 	  	 	16,537	 	 	 	15,272	 
	 Intangible assets
	  	 	8	 	  	 	524,232	 	 	 	408,380	 
	 Goodwill
	  	 	8	 	  	 	969,820	 	 	 	768,497	 
	 Contract assets
	  				  	 	1,300	 	 	 	1,426	 
	 Processor deposits
	  				  	 	13,898	 	 	 	12,478	 
	 Other non-current assets
	  				  	 	1,944	 	 	 	3,088	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total Assets
	  				  	 	2,243,984	 	 	 	1,558,772	 
		  				  	  
	  
	 	 	  
	  
	 
	 Liabilities
	  				  				 			
	 Current liabilities
	  				  				 			
	 Trade and other payables
	  	 	10	 	  	 	64,779	 	 	 	51,258	 
	 Income taxes payable
	  	 	18	 	  	 	7,558	 	 	 	2,866	 
	 Current portion of loans and borrowings
	  	 	12	 	  	 	2,527	 	 	 	2,874	 
	 Other current liabilities
	  	 	11	 	  	 	7,132	 	 	 	9,875	 
	 Liability classified common shares
	  	 	17	 	  	 	—  	 	 	 	58,262	 
	 Liability classified preferred shares
	  	 	17	 	  	 	—  	 	 	 	39,967	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total current liabilities before due to merchants
	  				  	 	81,996	 	 	 	165,102	 
	 Due to merchants
	  				  	 	443,394	 	 	 	200,612	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total current liabilities
	  				  	 	525,390	 	 	 	365,714	 
	 Non-current liabilities
	  				  				 			
	 Loans and borrowings
	  	 	12	 	  	 	212,726	 	 	 	722,166	 
	 Deferred tax liabilities
	  	 	18	 	  	 	46,320	 	 	 	12,976	 
	 Other non-current liabilities
	  	 	11	 	  	 	1,659	 	 	 	4,875	 
	 Unsecured convertible debentures due to shareholders
	  	 	14	 	  	 	—  	 	 	 	109,022	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total Liabilities
	  				  	 	786,095	 	 	 	1,214,753	 
		  				  	  
	  
	 	 	  
	  
	 
	 Equity
	  				  				 			
	 Equity attributable to shareholders
	  				  				 			
	 Share capital
	  	 	17	 	  	 	1,625,785	 	 	 	450,523	 
	 Contributed surplus
	  				  	 	11,966	 	 	 	1,603	 
	 Deficit
	  				  	 	(211,042	) 	 	 	(104,812	) 
	 Accumulated other comprehensive income (loss)
	  				  	 	22,470	 	 	 	(10,385	) 
		  				  	  
	  
	 	 	  
	  
	 
		  				  	 	1,449,179	 	 	 	336,929	 
	 Non-controlling interest
	  				  	 	8,710	 	 	 	7,090	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total Equity
	  				  	 	1,457,889	 	 	 	344,019	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total Liabilities and Equity
	  				  	 	2,243,984	 	 	 	1,558,772	 
		  				  	  
	  
	 	 	  
	  
	 
	 Contingencies
	  	 	19	 	  				 			

 Approved by the Board of Directors 
  

					
	 (signed) Philip Fayer

 
	 		  	 (signed) Michael Hanley

 

			
	Chair of the Board	 		  	Chair of the Audit Committee

 The accompanying notes are an integral part of these consolidated financial statements. 

  

 Nuvei Corporation 

Consolidated Statements of Profit or Loss and Comprehensive Loss 

For the years ended December 31, 2020 and 2019 

 
 (in thousands of US dollars, except
for share and per share amounts) 
  

													
	 	  	Note	 	  	 2020

$
	 	 	 2019

$
	 
	 Revenue
	  	 	16	 	  	 	375,046	 	 	 	245,816	 
	 Cost of revenue
	  	 	16	 	  	 	69,255	 	 	 	40,758	 
		  				  	  
	  
	 	 	  
	  
	 
	 Gross profit
	  				  	 	305,791	 	 	 	205,058	 
	 Selling, general and administrative expenses
	  	 	16	 	  	 	241,690	 	 	 	193,770	 
		  				  	  
	  
	 	 	  
	  
	 
	 Operating profit
	  				  	 	64,101	 	 	 	11,288	 
		  				  	  
	  
	 	 	  
	  
	 
	 Finance income
	  	 	15	 	  	 	(5,427	) 	 	 	(5,188	) 
	 Finance costs
	  	 	15	 	  	 	170,111	 	 	 	90,640	 
		  				  	  
	  
	 	 	  
	  
	 
	 Net finance costs
	  				  	 	164,684	 	 	 	85,452	 
		  				  	  
	  
	 	 	  
	  
	 
	 Loss before income tax
	  				  	 	(100,583	) 	 	 	(74,164	) 
	 Income tax expense (recovery)
	  	 	18	 	  	 	3,087	 	 	 	(4,699	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Net loss
	  				  	 	(103,670	) 	 	 	(69,465	) 
	 Other comprehensive income (loss)
	  				  				 			
	 Items that may be reclassified subsequently to profit or loss Foreign operations – foreign
currency translation differences
	  				  	 	32,855	 	 	 	(9,225	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Total comprehensive loss
	  				  	 	(70,815	) 	 	 	(78,690	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Net income (loss) attributable to:
	  				  				 			
	 Common shareholders of the Company
	  				  	 	(106,230	) 	 	 	(70,502	) 
	 Non-controlling interest
	  				  	 	2,560	 	 	 	1,037	 
		  				  	  
	  
	 	 	  
	  
	 
		  				  	 	(103,670	) 	 	 	(69,465	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Comprehensive income (loss) attributable to:
	  				  				 			
	 Common shareholders of the Company
	  				  	 	(73,375	) 	 	 	(79,727	) 
	 Non-controlling interest
	  				  	 	2,560	 	 	 	1,037	 
		  				  	  
	  
	 	 	  
	  
	 
		  				  	 	(70,815	) 	 	 	(78,690	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Net loss per share
	  	 	22	 	  				 			
	 Net loss per share attributable to common shareholders of the Company (basic and
diluted)
	  				  	 	(1.08	) 	 	 	(1.15	) 
	 Weighted average number of common shares outstanding (basic and diluted)
	  				  	 	98,681,060	 	 	 	61,483,675	 

 The accompanying notes are an integral part of these consolidated financial statements. 

  

 Nuvei Corporation 

Consolidated Statements of Cash Flows 
 For the
years ended December 31, 2020 and 2019 
  

(in thousands of US dollars) 
  

													
	 	  	Note	 	  	 2020

$
	 	 	 2019

$
	 
	 Cash flows from (used in) operating activities
	  				  				 			
	 Net loss
	  				  	 	(103,670	) 	 	 	(69,465	) 
	 Adjustments for:
	  				  				 			
	 Depreciation of property and equipment
	  	 	7	 	  	 	5,121	 	 	 	3,682	 
	 Amortization of intangible assets
	  	 	8	 	  	 	64,552	 	 	 	47,443	 
	 Amortization of contract assets
	  				  	 	2,114	 	 	 	2,323	 
	 Share-based payments
	  	 	24	 	  	 	10,407	 	 	 	994	 
	 Net finance costs
	  	 	15	 	  	 	164,684	 	 	 	85,452	 
	 Impairment on disposal of a subsidiary
	  	 	13	 	  	 	338	 	 	 	—  	 
	 Write-down of inventory to net realizable value
	  	 	6	 	  	 	513	 	 	 	134	 
	 Income tax expense (recovery)
	  	 	18	 	  	 	3,087	 	 	 	(4,699	) 
	 Changes in non-cash working capital items
	  	 	26	 	  	 	10,061	 	 	 	2,667	 
	 Interest paid
	  				  	 	(43,788	) 	 	 	(43,197	) 
	 Net realized loss on foreign currency exchange
	  				  	 	(5,937	) 	 	 	—  	 
	 Income taxes paid
	  				  	 	(14,223	) 	 	 	(2,629	) 
		  				  	  
	  
	 	 	  
	  
	 
		  				  	 	93,259	 	 	 	22,705	 
		  				  	  
	  
	 	 	  
	  
	 
	 Cash flows from (used in) investing activities
	  				  				 			
	 Business acquisitions, net of cash acquired
	  	 	4	 	  	 	(67,537	) 	 	 	(780,196	) 
	 Decrease (increase) in other non-current assets
	  				  	 	(1,683	) 	 	 	1,158	 
	 Proceeds from the sale of a subsidiary, net of cash
	  	 	13	 	  	 	19,045	 	 	 	—  	 
	 Sale of equity investments
	  	 	21	 	  	 	—  	 	 	 	28,600	 
	 Net decrease (increase) in advances to third parties
	  	 	9	 	  	 	9,401	 	 	 	(14,531	) 
	 Acquisition of property and equipment
	  	 	7	 	  	 	(3,395	) 	 	 	(1,825	) 
	 Acquisition of intangible assets
	  	 	8	 	  	 	(14,448	) 	 	 	(8,595	) 
		  				  	  
	  
	 	 	  
	  
	 
		  				  	 	(58,617	) 	 	 	(775,389	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Cash flows from (used in) financing activities
	  				  				 			
	 Transaction costs related to loans and borrowings
	  	 	12	 	  	 	(3,380	) 	 	 	(28,833	) 
	 Repayment of unsecured convertible debentures due to shareholders
	  	 	14	 	  	 	(93,384	) 	 	 	(100,500	) 
	 Issuance of Subordinate Voting Shares
	  	 	17	 	  	 	758,447	 	 	 	—  	 
	 Equity issuance fees
	  	 	17	 	  	 	(42,966	) 	 	 	—  	 
	 Issuance of common shares
	  	 	17	 	  	 	150	 	 	 	187,295	 
	 Proceeds from loans and borrowings
	  	 	12	 	  	 	110,000	 	 	 	629,509	 
	 Repayment of loans and borrowings
	  	 	12	 	  	 	(642,786	) 	 	 	(157,496	) 
	 Payment of lease liabilities
	  	 	12	 	  	 	(946	) 	 	 	(939	) 
	 Dividend paid to non controlling interest
	  				  	 	(940	) 	 	 	(360	) 
	 Redemption of preferred shares
	  	 	17	 	  	 	—  	 	 	 	(2,299	) 
	 Issuance of preferred shares
	  	 	17	 	  	 	—  	 	 	 	81,240	 
	 Issuance of unsecured convertible debentures due to shareholders
	  	 	14	 	  	 	—  	 	 	 	199,000	 
		  				  	  
	  
	 	 	  
	  
	 
		  				  	 	84,195	 	 	 	806,617	 
		  				  	  
	  
	 	 	  
	  
	 
	 Effect of movements in exchange rates on cash
	  				  	 	1,813	 	 	 	69	 
		  				  	  
	  
	 	 	  
	  
	 
	 Net increase in cash
	  				  	 	120,650	 	 	 	54,002	 
	 Cash – Beginning of year
	  				  	 	60,072	 	 	 	6,070	 
		  				  	  
	  
	 	 	  
	  
	 
	 Cash – End of year
	  				  	 	180,722	 	 	 	60,072	 
		  				  	  
	  
	 	 	  
	  
	 

 The accompanying notes are an integral part of these consolidated financial statements. 

  

 Nuvei Corporation 

Consolidated Statements of Changes in Equity 

For the years ended December 31, 2020 and 2019 

 
 (in thousands of US dollars) 

 

																													
	 	  	 	 	  	Attributable to shareholders of the Company	 	 	 	 	 	 	 
	 	  	Note	 	  	 Share
capital

$
	 	 	 Contributed
surplus

$
	 	 	 Deficit

$
	 	 	 Accumulated
other
comprehensive
income (loss)

$
	 	 	 Non-

controlling
interest

$
	 	 	 Total
equity

$
	 
	 Balance as at December 31, 2018
	  				  	 	168,203	 	 	 	609	 	 	 	(34,310	) 	 	 	(1,160	) 	 	 	—  	 	 	 	133,342	 
	 Contributions and distributions
	  				  				 				 				 				 				 			
	 Share issuance
	  	 	17	 	  	 	282,320	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	282,320	 
	 Equity-settled share-based payment
	  	 	24	 	  	 	—  	 	 	 	994	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	994	 
	 Business acquisition
	  				  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	6,413	 	 	 	6,413	 
	 Dividend paid to non-controlling interest
	  				  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(360	) 	 	 	(360	) 
	 Net income (loss) and comprehensive income (loss)
	  				  	 	—  	 	 	 	—  	 	 	 	(70,502	) 	 	 	(9,225	) 	 	 	1,037	 	 	 	(78,690	) 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2019
	  				  	 	450,523	 	 	 	1,603	 	 	 	(104,812	) 	 	 	(10,385	) 	 	 	7,090	 	 	 	344,019	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Contributions and distributions
	  				  				 				 				 				 				 			
	 Share issuance
	  	 	17	 	  	 	920,525	 	 	 	(44	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	920,481	 
	 Share redemption
	  	 	17	 	  	 	(1	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(1	) 
	 Equity-settled share-based payment
	  	 	24	 	  	 	—  	 	 	 	10,407	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	10,407	 
	 Business acquisition
	  				  	 	254,738	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	254,738	 
	 Dividend paid to non-controlling interest
	  				  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(940	) 	 	 	(940	) 
	 Net income (loss) and comprehensive income (loss)
	  				  	 	—  	 	 	 	—  	 	 	 	(106,230	) 	 	 	32,855	 	 	 	2,560	 	 	 	(70,815	) 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2020
	  				  	 	1,625,785	 	 	 	11,966	 	 	 	(211,042	) 	 	 	22,470	 	 	 	8,710	 	 	 	1,457,889	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 The accompanying notes are an integral part of these consolidated financial statements. 

  

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	1	 Reporting entity and reorganization 

Nuvei Corporation (“Nuvei” or the “Company”) is a global provider of payment technology solutions to merchants and partners
in North America, Europe, Asia Pacific and Latin America and is domiciled in Canada with its registered office located at 1100 René-Lévesque Blvd, 9th floor, Montreal, Quebec, Canada. Nuvei is
the ultimate parent of the group and was incorporated on September 1, 2017 under the Canada Business Corporations Act (“CBCA”) under the name 10390461 Canada Inc. and changed its name to Pivotal Development Corporation Inc. on
September 21, 2017 and to Nuvei Corporation on November 27, 2018. 
 On September 21, 2017, through a series of transactions,
Nuvei acquired 100% of Pivotal Holdings Ltd. 
 On September 22, 2020, the Company was amalgamated with its subsidiary Nuvei Holdings
Corporation (“NHC”), previously known as Pivotal Holdings Corporation (“PHC”). 
 Also on September 22, 2020, the
Company completed an initial public offering (“IPO”) and its shares began trading on the Toronto Stock Exchange (“TSX”) under the symbols “NVEI” and “NVEI.U”. 

 

	2	 Basis of preparation 

Statement of compliance 

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board (“IASB”). 
 The consolidated financial statements for the years ended
December 31, 2020 and 2019 were authorized for issue by the Company’s Board of Directors on March 8, 2021. 
 Basis of
measurement 
 The consolidated financial statements have been prepared on the historical cost basis except for: 

 

	 	•	 	 Advances to third parties (note 9), contingent considerations and put option liability (note 11), and
investments, which are measured at fair value; and 

  

	 	•	 	 Share-based compensation transactions, which are measured pursuant to IFRS 2, Share-based Payment
(note 24). 

 Use of judgments and estimates 

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates, judgments and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. 

  
 (1) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Estimates, judgments and assumptions are reviewed on an ongoing basis
and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized prospectively. 

Judgments 
 Critical
judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements include the following: 
  

	 	•	 	 Revenue recognition (note 3): 

The identification of revenue-generating contracts with customers, the identification of performance obligations, the determination of the
transaction price and allocations between identified performance obligations, the use of appropriate revenue recognition method for each performance obligation and the measure of progress for performance obligations satisfied over time are the main
aspects of the revenue recognition process, all of which require the exercise of judgment and use of assumptions. In addition, the Company has applied judgment in assessing the principal versus agent considerations for its transaction and processing
services. 
  

	 	•	 	 Determining the fair value of identifiable intangible assets following a business combination (note 4)

 The Company uses valuation techniques to determine the fair value of identifiable intangible assets acquired in a
business combination, which are generally based on a forecast of total expected future net discounted cash flows. These valuations are linked closely to the assumptions made by management regarding the future performance of the related assets and
the discount rate applied as it would be assumed by a market participant. 
 Assumptions and estimation uncertainties 

Assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year
include the following: 
  

	 	•	 	 Estimating the recoverable amount of goodwill (note 8); 

 

	 	•	 	 Estimating the provision for losses on merchant accounts (note 11); 

 

	 	•	 	 Estimating the recoverable amount of tax balances for recognition of tax assets (note 18); and

  

	 	•	 	 Estimating the fair value of share-based payment transactions (note 24). 

COVID-19 impact on judgments, assumptions and estimation uncertainties 

The COVID-19 pandemic has disrupted the economy and put unprecedented strains on governments, health
care systems, businesses and individuals around the world. The impact and duration of the COVID-19 pandemic are difficult to assess or predict. 

  
 (2) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 The spread of COVID-19 has
caused us to modify our business practices to help minimize the risk of the virus to our employees, our partners, our merchants and their customers, and the communities in which we do business. The extent and continued impact of the COVID-19 pandemic on our business will depend on certain developments, including: the duration and spread of the outbreak; government responses to the pandemic; the impact on our customers and our sales cycles; the
impact on customer, industry or employee events; and the effect on our partners, merchants and their customers, third-party service providers, customers and supply chains, all of which are uncertain and cannot be predicted. Accordingly, there is a
higher level of uncertainty with respect to management’s judgments, assumptions and estimates. 
  

	3	 Significant accounting policies 

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and
have been applied consistently by the Company’s subsidiaries, unless otherwise indicated. 
 Foreign currency 

Functional and presentation currency 

These consolidated financial statements are presented in US dollars, which is also the Company’s functional currency. 

Foreign currency transactions 

Transactions in foreign currencies are translated to the respective functional currencies of entities of the Company at exchange rates at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and
liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based
on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. 
 Foreign currency
differences are recognized in profit or loss. 
 Foreign operations 

The assets and liabilities of foreign operations whose functional currency is not the US dollar, including goodwill and fair value adjustments
arising on acquisition, are translated to US dollars at the exchange rates at the reporting date. The revenue and expenses of foreign operations are translated into US dollars at the average exchange rate for the period. 

Foreign currency differences are recognized in other comprehensive income (loss) in the cumulative translation reserve (accumulated other
comprehensive income (loss)), except to the extent that the translation difference is allocated to the non-controlling interest. 

  
 (3) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Business combinations 

Business combinations are accounted for using the acquisition method at the acquisition date. The consideration transferred for the acquisition
of a business is the fair value of the assets transferred, and any liability and equity interests issued by the Company on the date control of the acquired company is obtained. The consideration transferred includes the fair value of any asset or a
liability resulting from a contingent consideration arrangement. Contingent consideration is subsequently remeasured at fair value, with any resulting gain or loss recognized and included in the consolidated statements of profit or loss and
comprehensive loss. Contingent consideration that is payable contingent upon key employees’ continued employment with the Company is expensed over the service period. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are generally measured initially at their fair values at the acquisition date. The Company measures goodwill as the fair value for the consideration transferred including the recognized amount of any non controlling
interest in the acquiree, less the net recognized amount of the identifiable assets acquired and liabilities assumed, all measured at the acquisition date. If this consideration is lower than the fair value of the net assets of the business
acquired, the difference is recognized immediately in the consolidated statements of profit or loss and comprehensive loss as a gain from a bargain purchase. 

Transaction costs, other than those associated with the issue of debt or equity securities, and other direct costs of a business combination
are not considered part of the business acquisition transaction and are expensed as incurred. 
 Basis of consolidation 

Subsidiaries 
 Subsidiaries
are all entities over which the Company has control. Control exists when the Company is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through the power over the
entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. 

The Company’s principal subsidiaries, their jurisdiction of incorporation and the Company’s percentage ownership share of each are as
follows: 
  

									
	Subsidiary	  	Jurisdiction of
incorporation	 	  	Ownership
percentage	 
	 SafeCharge International Group Limited
	  	 	Guernsey	 	  	 	100	% 
	 Nuvei Technologies Corp.
	  	 	Canada	 	  	 	100	% 
	 Nuvei Technologies Inc.
	  	 	United States	 	  	 	100	% 
	 Loan Payment Pro
	  	 	United States	 	  	 	60	% 
	 Smart2Pay Technology & Services B.V.
	  	 	Netherlands	 	  	 	100	% 

  
 (4) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Non-controlling interest

 In the case of a business combination involving less than 100% of ownership interests, a
non-controlling interest is measured either at fair value or at the non-controlling interest’s share of the identifiable net assets of the acquiree. The basis of
measurement is determined on a transaction-by-transaction basis. Changes in the Company’s interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions. 
 Transactions eliminated on consolidation 

Intercompany balances and transactions, and any unrealized revenue and expenses arising from intercompany transactions, are eliminated in
preparing the consolidated financial statements. 
 Revenue from contracts with customers 

Performance obligations and revenue recognition policies 

Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that
reflects the consideration the Company expects to be entitled to in exchange for these goods and services. The following describes the nature and timing of the satisfaction of performance obligation in contracts with customers, including significant
payment terms, and the related revenue recognition policies. 
 Merchant transaction and processing services 

Revenue from the Company’s merchant transaction and processing services revenues are derived primarily from retail point of-sale and e-commerce payment processing services, and stem from relationships with individual merchants. Additionally, transaction and processing services revenues stem from
contracts with financial institutions and other merchant acquirers, the terms of which generally range from three to five years. The contracts stipulate the types of services and set forth how fees will be incurred and calculated. Merchant
transaction and processing services revenues are generated from processing electronic payment transactions for merchants. 
 The
Company’s transaction and processing revenues primarily comprise (a) fees calculated based on a percentage of monetary value of transactions processed; (b) fees calculated based on number of transactions processed; (c) service
fees; or (d) some combination thereof that are associated with transaction and processing services. 
 The Company’s promise
to its customers is to stand ready to process transactions the customer requests on a daily basis over the contract term. The Company has determined that the merchant transaction and processing services represent a stand-ready series of distinct
days of service that are substantially the same and have the same pattern of transfer to the customer. As a result, the Company has determined that merchant arrangements for transaction and processing services represent one performance obligation.
Substantially all of the Company’s revenues are recognized over time as a daily series over the term of the contracts. 

  
 (5) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 To provide the transaction and processing services, the Company routes
and clears each transaction, and obtains authorization for the transaction and requests funds settlement from the card issuing financial institution, through the applicable payment network. When third parties are involved in the transfer of goods or
services to a customer, the Company considers the nature of each specific promised good or service and applies judgment to determine whether it controls the good or service before it is transferred to a customer or whether it is acting as an agent
of the third party. To determine whether or not it controls the good or service before it is transferred to the customer, the Company assesses a number of indicators including whether it or the third party is primarily responsible for fulfillment
and which party has discretion in determining pricing for the good or service. Based on the Company’s assessment of these indicators, it has concluded that its promise to the customer to provide transaction and processing services is distinct
from the services provided by the card issuing financial institutions and payment networks in connection with payment transactions. When the Company does not have the ability to direct the use of and obtain substantially all of the benefits of the
services provided by the card issuing financial institutions and payment networks before these services are transferred to the customer, and on that basis, it does not control these services prior to being transferred to the customer, the Company
presents revenues net of the interchange fees charged by the card issuing financial institutions and the fees charged by the payment networks. In all other instances, the transaction and processing services revenue is reported on a gross basis, as
the Company has determined it is the principal in the arrangement. 
 Since the timing and quantity of transactions to be processed by the
Company is not determinable in advance, and the consideration received is contingent upon the customers’ uses (e.g. a percentage of the transaction value or a fixed fee per transaction, number of payment transactions processed, or number of
cards on file), the total transaction price is variable. The Company has determined that the performance obligation to provide merchant transaction and processing services meets the allocation of variable consideration exception criteria in that
(a) the terms of the variable payment relate specifically to the entity’s efforts to satisfy the performance obligation or transfer the distinct service and (b) allocating the variable amount of consideration entirely to the
performance obligation or the distinct good or service is consistent with the allocation objective when considering all of the performance obligations and payment terms in the contract. As a result, the Company allocates and recognizes variable
consideration in the period it has the contractual right to invoice the customer. 
 Other revenues 

The Company may sell hardware (“point-of-sale
equipment”) as part of its contracts with customers. Hardware consists of terminals or gateway devices. The Company does not manufacture hardware but purchases hardware from third-party vendors and holds the hardware in inventory until
purchased by a customer. The Company accounts for sales of hardware as a separate performance obligation and recognizes the revenue at its stand-alone selling price when a customer obtains control of the hardware, which is generally when the
hardware is shipped. 
 Segregated funds and due to merchants 

Segregated funds represent amounts held in segregated bank accounts, which are held on behalf of merchants where the Company is in the flow of
funds in the settlement transaction cycle. A corresponding liability (due to merchants) is recognized for the amounts to be settled to merchants. The segregated bank accounts are held with the Company’s banks and are segregated from operating
funds. Both the segregated funds and the due to merchants are derecognized when the transaction is settled. 

  
 (6) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Contract assets 

Contract assets consist of costs to obtain contracts with customers, including employee sales commissions and fees to third party agents. At
contract inception, the Company capitalizes such costs that it expects to recover and that would not have been incurred if the contract had not been obtained. 

Consistent with the basis of transfer of the processing services to the customer, contract assets are amortized on a straight-line basis, over
the expected period of contract benefit (ranging from three to five years), beginning when the accounts are activated and producing revenues. Amortization of contract assets is recorded in selling, general and administrative expense in the
Company’s consolidated statement of profit or loss and comprehensive loss. Costs to obtain a contract with an expected period of benefit of one year or less are recognized as an expense when incurred. 

Contract assets are evaluated for impairment by comparing, on a pooled basis, the expected future net cash flows underlying customer contracts
to the carrying amount of the capitalized contract costs. 
 Inventory 

Inventory consists of point-of-sale terminals and is measured
at the lower of cost and net realizable value. Cost includes purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Cost is determined using the
first-in, first-out method. Net realizable value is defined as the estimated selling price in the ordinary course of business, less selling expenses. 

Property and equipment 

Recognition and measurement 

Property and equipment are recorded at cost, less accumulated depreciation and accumulated impairment losses. If significant parts of an item
of property and equipment have different useful lives, then they are accounted for as separate items (major components) of property and equipment. 

Depreciation 

Depreciation is calculated to write off the cost of items of property and equipment less their estimated residual values using the
straight-line method over their estimated useful lives and is recognized in profit or loss as follows: 
  

							
	 	 	Assets	  	Period	  	 
		 	 Terminals
	  	3 to 5 years	  	
		 	 Office equipment
	  	5 years	  	
		 	 Computer equipment
	  	3 years	  	
		 	 Furniture and fixtures
	  	5 years	  	
		 	 Leasehold improvements
	  	Lease term – 5 to 10 years	  	
		 	 Right-of-use assets –
Buildings
	  	Lease term – 2 to 10 years	  	

  
 (7) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Depreciation methods, useful lives and residual values are reviewed at
each reporting date and adjusted if appropriate. 
 Intangible assets and goodwill 

Recognition and measurement 

Goodwill 
 Goodwill
represents the excess of the purchase price over the fair values of the net assets of entities acquired at their respective dates of acquisition. Goodwill is carried at cost less accumulated impairment losses. 

Research and development of software 

The Company develops software that is used in providing processing services to customers. 

Expenditure on research activities is recognized in profit or loss as incurred. 

Development expenditure is capitalized only if development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to
initial recognition, development expenditure is carried at cost less accumulated amortization and any accumulated impairment losses. 

Other intangible assets 

Other intangible assets, including trademarks, technologies and partner and merchant relationships, that are acquired by the Company and have
finite useful lives are carried at cost less accumulated amortization and any accumulated impairment losses. 
 Subsequent expenditure

 Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it
relates. All other expenditures are recognized in profit or loss as incurred. 
 Amortization 

Amortization is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over
their estimated useful lives, and is recognized in profit or loss. Goodwill is not amortized. 

  
 (8) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 The estimated useful lives for current and comparative periods are as
follows: 
  

							
	 	 	Assets	  	Period	  	 
		 	 Development costs – Computer software
	  	3-5 years	  	
		 	 Trademarks
	  	3-15 years	  	
		 	 Technologies
	  	3-15 years	  	
		 	 Partner and merchant relationships
	  	5-15 years	  	

 Amortization methods, useful lives and residual values are reviewed at each reporting date and are adjusted
if appropriate. 
 Impairment of non-financial assets 

At each reporting date, the Company reviews the carrying amounts of its non-financial assets to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested for impairment annually on October 1 and whenever an impairment trigger
is identified. 
 For impairment testing purposes, assets that cannot be tested individually are grouped to form the smallest group of
assets generating cash inflows that are largely independent of the cash inflows from other assets or groups of assets (“cash-generating units” or “CGUs”). Goodwill is allocated to the CGU or CGU group that is expected to benefit
from the synergies resulting from the business combination. Each unit or group of units to which goodwill is allocated is not to be larger than an operating segment. 

An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and its value in use. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as
considered necessary. To estimate value in use, management estimates future cash flows from each asset or CGU, which are then discounted using a pre-tax discount rate that reflects current market appraisals of
the time value of money and of risks of the specific asset. The data used for the impairment tests are directly related to the most recent forecast approved by the Company and are adjusted as needed to exclude the impact of future restructuring and
improvements to assets. 
 Impairment losses are recognized in profit and loss. When recognized as CGUs, impairment losses are first
allocated to reduce the carrying amount of goodwill allocated to the CGU, and then to reduce the carrying amount of the other assets of the CGU on a pro rata basis on the basis of the carrying amount of each asset in the CGU. 

Goodwill impairment losses are not reversed. Impairment losses on non-financial assets other than
goodwill are assessed at each reporting date for any indications that the loss has decreased or has been eliminated. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment
loss is only reversed to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of amortization, if no impairment loss had been recorded. 

  
 (9) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Provisions 

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost. 

A contingent liability is a possible obligation that arises from past events and of which the existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not within the control of the Company; or a present obligation that arises from past events (and therefore exists), but is not recognized
because it is not probable that a transfer or use of assets, provision of services or any other transfer of economic benefits will be required to settle the obligation, or the amount of the obligation cannot be estimated reliably. 

Provision for losses on merchant accounts 

Disputes between a cardholder and a merchant arise periodically, primarily as a result of customer dissatisfaction with merchandise quality or
merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction amount is refunded to the customer by the card issuing financial institution, but the financial institution is refunded by the
Company. The Company then charges back to the merchant the amount refunded to the financial institution. As such, the Company is exposed to credit risk in relation to the merchant since the Company assumes the repayment to the merchant’s
customer for the full amount of the transaction even if the merchant has insufficient funds to reimburse the Company. 
 A provision for
losses on merchant accounts is maintained to absorb chargebacks for merchant transactions that have been previously processed and on which revenues have been recorded. The provision for losses on merchant accounts specifically comprises identifiable
provisions for merchant transactions for which losses can be estimated. Management evaluates the risk for such transactions and estimates the loss for disputed transactions based primarily on historical experience and other relevant factors.
Management analyzes the adequacy of its provision for losses on merchant accounts in each reporting period. 
 The net charge for the
provision for merchant losses is included in selling, general and administrative expenses in the consolidated statement of profit or loss and comprehensive loss. 

Leases 
 At inception of a
contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. 

The Company recognizes a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use assets are presented within property and equipment. 

  
 (10) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. 

The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. Lease terms range
from zero to ten years for facilities. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability. 
 The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the Company’s incremental borrowing rate unless the interest rate implicit in the lease can be readily determined. 

Lease payments included in the measurement of the lease liability comprise: 

 

	 	•	 	 fixed payments, including in-substance fixed payments;

  

	 	•	 	 variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date; 

  

	 	•	 	 amounts expected to be payable under a residual value guarantee; and 

 

	 	•	 	 the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in
an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early. 

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee or if the Company changes its assessment of whether it will exercise a
purchase, extension or termination option. 
 When the lease liability is remeasured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero. 
 At
commencement or on modification of a contract that contains a lease component, the Company has elected not to separate non-lease components and instead to account for the lease and non-lease components as a single lease component. 
 Short-term leases and leases of low-value assets 
 The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases and leases of low-value assets. The Company recognizes the lease payments associated with those leases
as an expense on a straight-line basis over the lease term. 

  
 (11) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Financial instruments 

Recognition and initial measurement 

Financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the
instrument. 
 Classification and subsequent measurement 

Financial instruments are classified into the following specified categories: amortized cost, fair value through other comprehensive income
(“FVOCI”) or fair value through profit or loss (“FVTPL”). The classification depends on the nature and purpose of the financial instrument and is determined at the time of initial recognition. The Company’s financial
instruments have been classified as follows: 
  

					
	 	 	Financial instruments	  	Classification
		 	 Financial assets
	  	
		 	 Cash
	  	Amortized cost
		 	 Segregated funds
	  	Amortized cost
		 	 Trade and other receivables
	  	Amortized cost
		 	 Advances to third parties
	  	FVTPL
		 	 Processor deposits
	  	Amortized cost
		 	 Investments
	  	FVTPL
			
		 	 Financial liabilities
	  	
		 	 Trade and other payables
	  	Amortized cost
		 	 Due to merchants
	  	Amortized cost
		 	 Loans and borrowings
	  	Amortized cost
		 	 Put option liability and contingent consideration
	  	FVTPL
		 	 Unsecured convertible debentures due to shareholders
	  	Amortized cost
		 	 Liability classified common shares
	  	Amortized cost
		 	 Liability classified preferred shares
	  	Amortized cost

 Financial assets classified and measured at amortized cost are initially recorded at fair value plus any
directly attributable transaction costs and are subsequently measured using the effective interest method, less any impairment loss if: 
  

	 	•	 	 The asset is held within a business model whose objective is to hold assets in order to collect contractual cash
flows; and 

  

	 	•	 	 The contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely
payments of principal and/or interest. 

 Interest income or expense is recognized by applying the effective interest rate,
except for short-term receivables when the effect of discounting is immaterial. 
 Financial assets that do not meet the above conditions are
classified and measured at FVTPL and any transaction costs are expensed as incurred. 

  
 (12) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 A financial liability is classified at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at fair value are measured at fair value and net gains and
losses, including interest expense, are recognized in profit or loss. 
 Derecognition 

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to
receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. 

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expired. The Company also
derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. On
derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in
profit or loss. 
 Offsetting of financial instruments 

Financial assets and financial liabilities are offset and the net amount presented in the consolidated statements of financial position only
when the Company has a legal right to set off the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously. 

Impairment of non-derivative financial assets 

At each reporting date, the Company recognizes loss allowances for expected credit losses (“ECL”) on financial assets carried at
amortized cost. 
 The Company’s trade and other receivables are accounts receivable with no financing component and have maturities of
less than 12 months, and as such the Company applies the simplified approach for ECLs. As a result, the Company does not track changes in credit risk related to its trade and other receivables, but instead recognizes a loss allowance based on
lifetime ECLs at each reporting date. 
 For other financial assets subject to impairment, the Company measures loss allowances at an amount
equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs: 
  

	 	•	 	 debt securities that are determined to have low credit risk at the reporting date; and 

 

	 	•	 	 other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition. 

  
 (13) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 The Company’s approach to ECLs reflects a probability-weighted
outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions. The maximum period
considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk. 
 The Company uses
the provision matrix as a practical expedient to measure ECLs on accounts receivable, based on days past due for groupings of receivables with similar loss patterns. Accounts receivable are grouped based on their nature. The provision matrix is
based on historical and experience observed loss rates over the expected life of the receivables with merchants and processors, and is adjusted for forward-looking estimates. The Company also considers collection experience and makes estimates
regarding collectability based on trends and aging. 
 Share capital 

Common shares 
 Incremental
costs directly attributable to the issuance of common shares are recognized as a deduction from equity, net of tax effects. 
 Prior to the
IPO on September 22, 2020, certain Class A common shares, Series A, for which a holder had a put option to require the Company to purchase all or part of the common shares at any time at fair value in exchange for cash were classified as
financial liabilities. 
 Preferred shares 

Prior to the IPO on September 22, 2020, the Company had preferred shares outstanding. 

Redeemable preferred shares were classified as financial liabilities because they were redeemable in cash by the holders. Any dividends thereon
were recognized as interest expense in profit or loss as they were accrued. 
 Non-redeemable
preferred shares were classified as equity because they bore discretionary dividends, did not contain any obligations to deliver cash or other financial assets and did not require settlement in a variable number of the Company’s equity
instruments. 
 Share-based payment arrangements 

The grant date fair value of equity-settled share-based arrangements granted to directors, officers, employees and consultants is recognized as
an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards with which the related service is expected to be met, such that the amount
ultimately recognized is based on the number of awards that meet the related service at the vesting date. 

  
 (14) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 When share-based arrangements have been communicated and service
inception date is deemed to have occurred but a shared understanding of the terms and conditions of the arrangement has not been reached, an expense, with a corresponding increase in equity, is recognized over the vesting period of the awards based
on the best estimate of fair value at grant date. A shared understanding of the terms and conditions is not met if the outcome of the arrangement is based primarily on subjective factors. The fair value at grant date will be revised at every
reporting period until the uncertainty is resolved or lapses. 
 Net loss per share 

Basic loss per share is calculated by dividing net loss attributable to common shareholders of the Company by the weighted average number
of common shares outstanding during the year. Diluted loss per share is calculated by dividing net loss attributable to common shareholders of the Company, adjusted as necessary for the impact of potentially dilutive securities, by the weighted
average number of common shares outstanding during the year and the impact of securities that would have a dilutive effect on loss per share. 

Income taxes 
 Income tax
expense comprises current and deferred taxes. Current and deferred taxes are recognized in profit or loss except to the extent that they relate to a business combination, or items recognized directly in equity or in other comprehensive income
(loss). 
 The Company recognizes the tax benefit from an uncertain tax position only if it is probable that the tax position will be
sustained based on its technical merits. The Company measures and records the tax benefits from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company’s
estimated liabilities related to these matters are adjusted in the period in which the uncertain tax position is effectively settled, the statute of limitations for examination expires or when additional information becomes available. 

Current income taxes 

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years. 

  
 (15) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Deferred income taxes 

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax
is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have
been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax
authority on the same taxable entity or on different tax entities, but the entities intend to settle current tax liabilities and assets on a net basis or the tax assets and liabilities will be realized simultaneously. 

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable
that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. 

Investment tax credits and other government grants 

Government grants, consisting of grants and investment tax credits, are recorded as a reduction of the related expense or cost of the asset
acquired. Government grants are recognized when there is reasonable assurance that the Company has met or will meet the requirements of the approved grant program and there is reasonable assurance that the grant will be received. 

Grants that compensate the Company for expenses incurred are recognized in profit or loss in reduction thereof on a systematic basis in the
same years in which the expenses are recognized. Grants that compensate the Company for the cost of an asset are recognized in profit or loss on a systematic basis over the useful life of the asset. 

The Company incurs research and development expenditures which are eligible for scientific research and experimental development (SR&ED)
tax credits. Refundable investment tax credits are recorded as SR&ED tax credits in the consolidated statements of profit or loss and comprehensive loss when there is reasonable assurance that the credits will be realized. Non-refundable SR&ED tax credits, which are deductible against income taxes otherwise payable, are recorded in income as a reduction of the related research and development expenses when there is reasonable
assurance that the credits will be realized. 
 The SR&ED tax credits recorded are based on management’s best estimate of amounts
expected to be recovered and are subject to audit by taxation authorities. To the extent that actual SR&ED tax credits differ from the estimate, those differences are recorded in the period of assessment by taxation authorities as an adjustment
of the items to which they relate. 

  
 (16) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 New accounting standards and interpretations adopted 

A number of amendments to existing standards issued by the IASB have been applied in preparing these consolidated financial statements. 

Amendments to references to conceptual framework in IFRS standards 

On March 29, 2018, the IASB issued a revised version of its Conceptual Framework, which included the following main improvements:

  

	 	•	 	 New concepts on measurement, including factors to be considered when selecting a measurement basis;

  

	 	•	 	 New concepts on presentation and disclosure, including when to classify income and expenses in other
comprehensive income; 

  

	 	•	 	 New guidance on when assets and liabilities are removed from financial statements; 

 

	 	•	 	 Updated definitions of an asset and liability; 

 

	 	•	 	 Updated criteria for including assets and liabilities in financial statements; and 

 

	 	•	 	 Clarifications of prudence, stewardship, measurement uncertainty and substance over form. 

The amendments had no material impact on these consolidated financial statements. 

Definition of a business (amendments to IFRS 3, Business Combinations) 

On January 1, 2020, the Company adopted amendments to IFRS 3, Business Combinations that seek to clarify whether an acquisition
results in a business acquisition or a group of assets. The amended definition of a business will have a narrow scope, stating that the process must be substantial, and that the inputs and the process must together have the capacity to contribute
significantly to the creation of outputs. In addition, the definition of output will be reduced to the concept of goods and services to customers, whereas the previous definition emphasized returns in the form of dividends. The amendments will also
include an optional fair value concentration test that simplifies the assessment of whether an acquisition results in a business acquisition or a group of assets. 

The amendments had no material impact on these consolidated financial statements. 

Definition of material (amendments to IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies, Changes in
Accounting Estimates and Errors) 
 On October 31, 2018, the IASB clarified the definition of materiality. Following this amendment,
information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. 

This amendment had no material impact on these consolidated financial statements. 

  
 (17) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 IFRS 16 – COVID-19-related rent concessions 
 On May 28, 2020, the IASB published an amendment to
IFRS 16, Leases, that provides an optional practical expedient for lessees from assessing whether a rent concession related to COVID-19 is a lease modification. 

This amendment had no impact on these consolidated financial statements. 

New accounting standards and interpretations issued but not yet adopted 

A number of amendments to existing standards issued by the IASB are mandatory but not yet effective for the year ended December 31, 2020.
The Company is still assessing the impact of these amendments, if any, on its consolidated financial statements. 
 Amendments to
references to conceptual framework in IFRS Standards 
 This amendment replaces references to the 2010 Conceptual Framework for Financial
Reporting with references to the 2018 Conceptual Framework for Financial Reporting in order to determine what constitutes an asset or liability in a business combination, add a new exception for certain liabilities and contingent liabilities to
refer to IAS 37, Provisions, Contingent Liabilities and Contingent Assets, or IFRIC 21, Levies, rather than to the 2018 Conceptual Framework, and clarify that an acquirer should not recognize contingent assets at the acquisition
date. The amendments are effective for business combinations occurring in reporting periods starting on or after January 1, 2022. Earlier application is permitted. 

Amendments to liability classification 

On January 23, 2020, the IASB issued amendments to IAS 1, Presentation of Financial Statements (the amendments), to clarify
the requirements for classifying liabilities as current or non-current. More specifically: 
  

	 	*	 The amendments specify that the conditions which exist at the end of the reporting period are those which will
be used to determine if a right to defer settlement of a liability exists; 

  

	 	*	 Management expectations about events after the consolidated statement of financial position date, for example
on whether a covenant will be breached, or whether early settlement will take place, are not relevant; and 

  

	 	*	 The amendments clarify the situations that are considered settlement of a liability. 

The amendments are applicable to annual periods beginning on or after January 1, 2023. 

  
 (18) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	4	 Business acquisitions 

Transaction for the year ended December 31, 2020 
  

	 	a)	 Smart2Pay Technology & Services B.V. (“Smart2Pay”) 

On November 2, 2020, the Company acquired Smart2Pay, a payment services provider headquartered in the Netherlands. The fair value of the
consideration transferred consisted of cash paid of €70,900 ($81,927), subject to closing adjustments, and 6,711,923 Subordinate Voting Shares issued from the Company’s treasury at a fair value of $37.95 per share, which is based on the
quoted price of the Subordinate Voting Shares on the TSX on the closing date. 
 To estimate the fair value of the intangible assets,
management used the excess earnings method to value partner and merchant relationships and the royalty relief method to value technologies using discounted cash flow models. Management developed assumptions related to revenue and gross margin
forecasts, partner and merchant attrition rates, royalty rates and discount rates. 
 Smart2Pay contributed revenues of $9,753 and net income
of $2,029 to the Company for the period from the acquisition date to December 31, 2020. The net income contribution includes the amortization of identifiable intangible assets acquired. Acquisition costs of $4,044 have been expensed and
recorded under selling, general and administrative expenses in the consolidated statement of profit or loss and comprehensive loss for the year ended December 31, 2020. 

  
 (19) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 The following table summarizes the preliminary amounts of assets
acquired and liabilities assumed at the acquisition date: 
  

					
	 	  	 Fair value

$
	 
	 Assets acquired
	  			
	 Cash
	  	 	14,390	 
	 Segregated funds
	  	 	25,534	 
	 Trade and other receivables
	  	 	89	 
	 Prepaids
	  	 	88	 
	 Other assets
	  	 	96	 
	 Property and equipment
	  	 	276	 
	 Right-of-use
asset
	  	 	95	 
	 Intangible assets:
	  			
	 Technologies
	  	 	63,093	 
	 Partner and merchant relationships
	  	 	103,503	 
	 Goodwill (not deductible for income tax purposes)
	  	 	198,439	 
		  	  
	  
	 
		  	 	405,603	 
	 Liabilities assumed
	  			
	 Trade and other payables
	  	 	(1,026	) 
	 Due to merchants
	  	 	(25,534	) 
	 Lease liabilities
	  	 	(97	) 
	 Income tax payable
	  	 	(631	) 
	 Deferred income taxes
	  	 	(41,650	) 
		  	  
	  
	 
		  	 	336,665	 
		  	  
	  
	 
	 Total cash consideration paid
	  	 	81,927	 
	 Subordinate Voting Shares issued
	  	 	254,738	 
		  	  
	  
	 
	 Total
	  	 	336,665	 
		  	  
	  
	 

 Goodwill arising from this acquisition mainly consists of future growth, expected synergies and assembled
workforce, which were not recorded separately since they do not meet the recognition criteria for identifiable intangible assets. 
 To
finance a portion of the cash consideration noted above, on November 2, 2020, the Company also increased its credit facility (see note 12) by amending its credit agreement to add a term loan of $10,000. 

Transactions for the year ended December 31, 2019 
  

	 	b)	 SafeCharge International Group Limited (“SafeCharge”) 

On August 1, 2019, the Company acquired SafeCharge, a European-based payment service company, for a total cash consideration of $872,491.
SafeCharge provides global omni-channel payment services from card acquiring and issuing to payment processing and checkout. Prior to the transaction, SafeCharge had been listed on the AIM market of the London Stock Exchange. 

  
 (20) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 SafeCharge contributed revenues of $55,853 and net income of $11,643 to
the Company for the period from the acquisition date to December 31, 2019. The net income contribution includes the amortization of identifiable intangible assets acquired. Acquisition costs of $11,425 have been expensed and recorded under
selling, general and administrative expenses in the consolidated statement of profit or loss and comprehensive loss for the year ended December 31, 2019. 

The following table summarizes the final recognized amounts of assets acquired and liabilities assumed at the acquisition date: 

 

					
	 	  	 Fair value

$
	 
	 Assets acquired
	  			
	 Cash
	  	 	96,343	 
	 Segregated funds
	  	 	162,177	 
	 Trade and other receivables
	  	 	6,518	 
	 Other assets
	  	 	44,362	 
	 Property and equipment
	  	 	6,651	 
	 Right-of-use
asset
	  	 	4,645	 
	 Intangible assets:
	  			
	 Development costs—Computer software
	  	 	14,862	 
	 Trademarks
	  	 	2,654	 
	 Technologies
	  	 	190,435	 
	 Partner and merchant relationships
	  	 	113,857	 
	 Goodwill (not deductible for income tax purposes)
	  	 	439,554	 
		  	  
	  
	 
		  	 	1,082,058	 
	 Liabilities assumed
	  			
	 Trade and other payables
	  	 	(30,969	) 
	 Due to merchants
	  	 	(162,177	) 
	 Lease liabilities
	  	 	(4,721	) 
	 Deferred income taxes
	  	 	(11,700	) 
		  	  
	  
	 
		  	 	872,491	 
		  	  
	  
	 
	 Total cash consideration paid
	  	 	872,491	 
		  	  
	  
	 

 Goodwill arising from this acquisition mainly consists of future growth and expected synergies, which were not
recorded separately since they do not meet the recognition criteria for identifiable intangible assets. 
 To finance the SafeCharge
acquisition noted above, on August 1, 2019: 
  

	 	(i)	 The Company issued 81.2 million preferred shares at $1 per share for a total consideration of $81,240;

  

	 	(ii)	 The Company increased its credit facility (see note 12) by amending its credit agreement and entering into a
further second lien agreement increasing its total available credit facilities to $845,000. An amount of $614,777 was drawn down to finance the SafeCharge acquisition; and 

 

	 	(iii)	 The Company issued debentures for a total consideration of $199,000 (note 14). 

  
 (21) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	 	c)	 Loan Payment Pro (“LPP”) 

On January 31, 2019, the Company acquired a 60% interest in LPP. The purchase price for this business acquisition totalled $11,461, of
which $4,061 was paid in cash, including an amount of $600 placed in escrow in connection with adjustments to the purchase price or indemnification as per the purchase agreement. The remainder consists of a contingent consideration with an initial
fair value of $7,400 whose payment is contingent upon meeting certain performance metrics (see notes 11 and 21). The acquisition was financed from existing facilities. LPP offers payment processing solutions specifically for the debt repayment
industry. 
 LPP contributed revenues of $1,334 and a net loss of $961 to the Company for the period from the acquisition date to
December 31, 2019. The net income contribution includes the amortization of identifiable intangible assets acquired. During the year ended December 31, 2019, acquisition costs of $107 were expensed and recorded under selling, general and
administrative expenses in the consolidated statement of profit or loss and comprehensive loss. 
 The following table summarizes the final
recognized amounts of assets acquired and liabilities assumed at the acquisition date: 
  

					
	 	  	 Fair value

$
	 
	 Assets acquired
	  			
	 Cash
	  	 	13	 
	 Trade and other receivables
	  	 	100	 
	 Processor deposits
	  	 	3	 
	 Property and equipment
	  	 	2	 
	 Intangible assets
	  			
	 Technologies
	  	 	1,450	 
	 Partner and merchant relationships
	  	 	2,165	 
	 Goodwill (not deductible for tax purposes)
	  	 	15,383	 
		  	  
	  
	 
		  	 	19,116	 
	 Liabilities assumed
	  			
	 Trade and other payables
	  	 	(55	) 
	 Put option liability
	  	 	(1,187	) 
	 Non-controlling interests, based on its fair
value
	  	 	(6,413	) 
		  	  
	  
	 
		  	 	11,461	 
		  	  
	  
	 
	 Total consideration
	  			
	 Cash consideration paid
	  	 	4,061	 
	 Contingent consideration
	  	 	7,400	 
		  	  
	  
	 
		  	 	11,461	 
		  	  
	  
	 

 Goodwill arising from this acquisition mainly consists of the assembled workforce, which was not recorded
separately since it does not meet the recognition criteria for identifiable intangible assets. 

  
 (22) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	5	 Trade and other receivables 

 

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Trade receivables
	  	 	26,657	 	  	 	28,870	 
	 Investment tax credits
	  	 	805	 	  	 	1,667	 
	 Other receivables
	  	 	4,593	 	  	 	2,229	 
		  	  
	  
	 	  	  
	  
	 
		  	 	32,055	 	  	 	32,765	 
		  	  
	  
	 	  	  
	  
	 

 A discussion of the Company’s exposure to credit and market risks and impairment losses for trade
receivables is presented in note 20. 
  

	6	 Inventory 

For the year ended December 31, 2020, the cost of revenue includes inventory costs of $2,778 (2019 – $4,703) and a write-down to
net realizable value of $513 (2019 – $134). 

  
 (23) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	7	 Property and equipment 

 

																																	
	 	  	Note	 	  	 Terminals

$
	 	 	 Office
equipment

$
	 	  	 Computer
equipment

$
	 	 	 Furniture
and
fixtures

$
	 	 	 Leasehold
improvements

$
	 	 	
Right-of-use
assets –
Buildings

$
	 	 	 Total

$
	 
	 Cost
	  				  				 				  				 				 				 				 			
	 Balance as at December 31, 2018
	  				  	 	1,767	 	 	 	20	 	  	 	925	 	 	 	316	 	 	 	975	 	 	 	3,669	 	 	 	7,672	 
	 Acquisitions
	  				  	 	448	 	 	 	—  	 	  	 	1,370	 	 	 	7	 	 	 	—  	 	 	 	347	 	 	 	2,172	 
	 Acquisition through business combinations
	  	 	4	 	  	 	37	 	 	 	—  	 	  	 	3,298	 	 	 	766	 	 	 	2,552	 	 	 	4,645	 	 	 	11,298	 
	 Effect of movements in exchange rates
	  				  	 	126	 	 	 	1	 	  	 	(15	) 	 	 	53	 	 	 	57	 	 	 	15	 	 	 	237	 
		  				  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2019
	  				  	 	2,378	 	 	 	21	 	  	 	5,578	 	 	 	1,142	 	 	 	3,584	 	 	 	8,676	 	 	 	21,379	 
		  				  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Acquisitions
	  				  	 	541	 	 	 	—  	 	  	 	2,725	 	 	 	47	 	 	 	82	 	 	 	3,176	 	 	 	6,571	 
	 Disposal
	  				  	 	—  	 	 	 	—  	 	  	 	(3,401	) 	 	 	(72	) 	 	 	(74	) 	 	 	—  	 	 	 	(3,547	) 
	 Acquisition through business combinations
	  	 	4	 	  	 	—  	 	 	 	—  	 	  	 	164	 	 	 	43	 	 	 	69	 	 	 	95	 	 	 	371	 
	 Effect of movements in exchange rates
	  				  	 	30	 	 	 	—  	 	  	 	(270	) 	 	 	—  	 	 	 	4	 	 	 	47	 	 	 	(189	) 
		  				  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2020
	  				  	 	2,949	 	 	 	21	 	  	 	4,796	 	 	 	1,160	 	 	 	3,665	 	 	 	11,994	 	 	 	24,585	 
		  				  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Accumulated depreciation
	  				  				 				  				 				 				 				 			
	 Balance as at December 31, 2018
	  				  	 	540	 	 	 	14	 	  	 	402	 	 	 	74	 	 	 	339	 	 	 	915	 	 	 	2,284	 
	 Depreciation
	  				  	 	535	 	 	 	—  	 	  	 	1,936	 	 	 	84	 	 	 	313	 	 	 	814	 	 	 	3,682	 
	 Effect of movement in exchange rates
	  				  	 	34	 	 	 	7	 	  	 	63	 	 	 	17	 	 	 	10	 	 	 	10	 	 	 	141	 
		  				  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2019
	  				  	 	1,109	 	 	 	21	 	  	 	2,401	 	 	 	175	 	 	 	662	 	 	 	1,739	 	 	 	6,107	 
		  				  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Depreciation
	  				  	 	556	 	 	 	—  	 	  	 	1,959	 	 	 	159	 	 	 	286	 	 	 	2,161	 	 	 	5,121	 
	 Disposal
	  				  	 	—  	 	 	 	—  	 	  	 	(3,108	) 	 	 	(28	) 	 	 	(28	) 	 	 	—  	 	 	 	(3,164	) 
	 Effect of movement in exchange rates
	  				  	 	(1	) 	 	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(15	) 	 	 	(16	) 
		  				  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2020
	  				  	 	1,664	 	 	 	21	 	  	 	1,252	 	 	 	306	 	 	 	920	 	 	 	3,885	 	 	 	8,048	 
		  				  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Carrying amounts
	  				  				 				  				 				 				 				 			
	 At December 31, 2019
	  				  	 	1,269	 	 	 	—  	 	  	 	3,177	 	 	 	967	 	 	 	2,922	 	 	 	6,937	 	 	 	15,272	 
	 At December 31, 2020
	  				  	 	1,285	 	 	 	—  	 	  	 	3,544	 	 	 	854	 	 	 	2,745	 	 	 	8,109	 	 	 	16,537	 
		  				  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

  
 (24) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  

	8	 Intangible assets and goodwill 

 

	 	a)	 Intangible assets 

  

																									
	 	  	Notes	 	  	 Development
costs –
Computer software

$
	 	 	 Trademarks

$
	 	 	 Technologies

$
	 	 	 Partner and
merchant
relationships

$
	 	 	Total
$	 
	 Cost
	  				  				 				 				 				 			
	 Balance as at December 31, 2018
	  				  	 	11,391	 	 	 	6,865	 	 	 	5,071	 	 	 	135,206	 	 	 	158,533	 
	 Acquisitions – internally developed
	  				  	 	8,595	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	8,595	 
	 Acquisition through business combinations
	  	 	4	 	  	 	14,862	 	 	 	2,654	 	 	 	191,885	 	 	 	116,022	 	 	 	325,423	 
	 Effect of movements in exchange rates
	  				  	 	2,182	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	2,182	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2019
	  				  	 	37,030	 	 	 	9,519	 	 	 	196,956	 	 	 	251,228	 	 	 	494,733	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Acquisitions – internally developed
	  				  	 	14,448	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	14,448	 
	 CreditGuard disposal
	  	 	13	 	  	 	(3,957	) 	 	 	(152	) 	 	 	(3,122	) 	 	 	(2,458	) 	 	 	(9,689	) 
	 Disposal
	  				  	 	(226	) 	 	 	(44	) 	 	 	(145	) 	 	 	(114	) 	 	 	(529	) 
	 Acquisition through business combinations
	  	 	4	 	  	 	—  	 	 	 	—  	 	 	 	63,093	 	 	 	103,503	 	 	 	166,596	 
	 Effect of movements in exchange rates
	  				  	 	820	 	 	 	—  	 	 	 	3,220	 	 	 	5,173	 	 	 	9,212	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2020
	  				  	 	48,115	 	 	 	9,323	 	 	 	260,002	 	 	 	357,332	 	 	 	674,772	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Accumulated amortization
	  				  				 				 				 				 			
	 Balance as at December 31, 2018
	  				  	 	4,230	 	 	 	2,141	 	 	 	1,479	 	 	 	31,060	 	 	 	38,910	 
	 Amortization
	  				  	 	6,243	 	 	 	2,443	 	 	 	7,692	 	 	 	31,065	 	 	 	47,443	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2019
	  				  	 	10,473	 	 	 	4,584	 	 	 	9,171	 	 	 	62,125	 	 	 	86,353	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Amortization
	  				  	 	10,861	 	 	 	3,216	 	 	 	13,454	 	 	 	37,021	 	 	 	64,552	 
	 Disposal
	  				  	 	—  	 	 	 	(54	) 	 	 	(182	) 	 	 	(143	) 	 	 	(379	) 
	 Effect of movement in exchange rates
	  				  	 	—  	 	 	 	—  	 	 	 	1	 	 	 	13	 	 	 	14	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance as at December 31, 2020
	  				  	 	21,334	 	 	 	7,746	 	 	 	22,444	 	 	 	99,016	 	 	 	150,540	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Carrying amounts
	  				  				 				 				 				 			
	 At December 31, 2019
	  				  	 	26,557	 	 	 	4,935	 	 	 	187,785	 	 	 	189,103	 	 	 	408,380	 
	 At December 31, 2020
	  				  	 	26,781	 	 	 	1,577	 	 	 	237,558	 	 	 	258,316	 	 	 	524,232	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

  
 (25) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  

	 	b)	 Goodwill 

Impairment test 
 For the
years ended December 31, 2020 and 2019, the Company performed its annual impairment test of goodwill. For the purposes of impairment testing, goodwill has been allocated to the Company’s CGUs, which represent the lowest level within the
Company at which goodwill is monitored for internal management purposes, as follows: 
  

																									
	 	  	Notes	 	  	 Nuvei
Corporation1

$
	 	  	Digital
Payments2
$	 	  	 Credit
Guard

$
	 	 	 Loan
Payment
Pro

$
	 	  	 Total

$
	 
	 Balance at December 31, 2018
	  				  	 	313,560	 	  	 	—  	 	  	 	—  	 	 	 	—  	 	  	 	313,560	 
	 Acquisitions through business combinations
	  	 	4	 	  	 	—  	 	  	 	431,890	 	  	 	7,664	 	 	 	15,383	 	  	 	454,937	 
		  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 Balance at December 31, 2019
	  				  	 	313,560	 	  	 	431,890	 	  	 	7,664	 	 	 	15,383	 	  	 	768,497	 
	 Disposal of subsidiary
	  	 	13	 	  	 	—  	 	  	 	—  	 	  	 	(7,664	) 	 	 	—  	 	  	 	(7,664	) 
	 Acquisitions through business combinations
	  	 	4	 	  	 	—  	 	  	 	198,439	 	  	 	—  	 	 	 	—  	 	  	 	198,439	 
	 Effect of movements in exchange rates
	  				  	 	—  	 	  	 	10,548	 	  	 	—  	 	 	 	—  	 	  	 	10,548	 
		  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	  	  
	  
	 
	 Balance at December 31, 2020
	  				  	 	313,560	 	  	 	640,877	 	  	 	—  	 	 	 	15,383	 	  	 	969,820	 
		  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	  	  
	  
	 

  

	1.	 Represents the acquisition of Pivotal Holdings Ltd. by Nuvei in 2017 

	2.	 Includes the acquisitions of SafeCharge (except for CreditGuard) and Smart2Pay (see note 4)

 The recoverable amount of the CGUs was based on fair value less costs of disposal, estimated using a market approach.
The Company concluded that the recoverable amount of the CGUs subject to the annual test was greater than their carrying amount. As such, no impairment charge was recorded during 2020 and 2019. 

The Company determined the recoverable amounts of the CGUs based on the fair value less costs of disposal method. The fair values were based on
a multiple applied to forecasted adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the next year, which takes into account financial forecasts approved by senior management. The key assumptions for the fair value
less costs of disposals method include estimated sales volumes, input costs, and selling, general and administrative expenses in determining future forecasted adjusted EBITDA, as well as the multiple applied to forecasted adjusted EBITDA. The
adjusted EBITDA multiple was obtained by using market data for comparable companies. The values assigned to the key assumptions represent management’s assessment of future trends and have been based on historical data from external and internal
sources. No reasonably possible change in the key assumptions used in determining the recoverable amount would result in any impairment of goodwill. 

  
 (26) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  

	9	 Advances to third parties 

Advances to third parties comprise the following: 
  

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Advances to a third party independent sales organization
	  	 	46,680	 	  	 	51,175	 
	 Other
	  	 	318	 	  	 	310	 
		  	  
	  
	 	  	  
	  
	 
		  	 	46,998	 	  	 	51,485	 
	 Current portion
	  	 	8,520	 	  	 	8,901	 
	 Long-term portion
	  	 	38,478	 	  	 	42,584	 
		  	  
	  
	 	  	  
	  
	 
		  	 	46,998	 	  	 	51,485	 
		  	  
	  
	 	  	  
	  
	 

 Commencing in 2018, the Company has entered into various agreements with a single third party independent sales
organization to acquire the rights to future cash flows from a portfolio of merchant contracts. In 2020, rights were acquired for an aggregate cash consideration of $3,240 (2019 – $20,995). Under the agreements, the Company is entitled to
receive payments, equivalent to a specified percentage of the processing fee, directly from financial institutions when a merchant uses the payment processing services of the third party independent sales organization. The agreements provide for
minimum guaranteed payments for the first three years of the arrangement, which is achieved by the third party independent sales organization providing for merchant replacements in order to meet those minimum guaranteed payments. Subsequent to three
years, the portfolio of merchants is fixed, and the cash flows are no longer guaranteed. The Company has accounted for the transaction in two parts: 1) the acquisition of a loan portfolio, which will be settled through merchant residuals over the
first three years of the agreement; and 2) a deposit paid on the right to acquire a fixed portfolio of merchant contracts at the end of the third year. Both components of this acquisition are recognized initially at fair value and are subsequently
accounted for at FVTPL with the fair value of each unit of account being determined by calculating the present value of the future estimated cash flows over the term of the agreements using an appropriate market discount rate. The future cash flows
are estimated based on historical experience and expected attrition using known information as well as current and forecasted economic conditions. 

  
 (27) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  
 The movement in the advances to a
third party independent sales organization is as follows: 
  

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Balance – Beginning of year
	  	 	51,175	 	  	 	35,435	 
	 Acquisition
	  	 	3,240	 	  	 	20,995	 
	 Fair value true-up
	  	 	(513	) 	  	 	1,228	 
	 Interest on advances to third parties
	  	 	5,427	 	  	 	5,188	 
	 Merchant residuals received
	  	 	(12,649	) 	  	 	(11,671	) 
		  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	46,680	 	  	 	51,175	 
		  	  
	  
	 	  	  
	  
	 

  

	10	 Trade and other payables 

Trade and other payables comprise the following: 
  

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Trade payables
	  	 	20,307	 	  	 	15,288	 
	 Accrued bonuses and other compensation related liabilities
	  	 	13,541	 	  	 	8,397	 
	 Sales tax
	  	 	6,073	 	  	 	4,887	 
	 Interest payable
	  	 	1,212	 	  	 	2,792	 
	 Due to processors
	  	 	3,644	 	  	 	2,823	 
	 Due to merchants not related to the segregated funds
	  	 	14,823	 	  	 	14,923	 
	 Other accrued liabilities
	  	 	5,179	 	  	 	2,148	 
		  	  
	  
	 	  	  
	  
	 
		  	 	64,779	 	  	 	51,258	 
		  	  
	  
	 	  	  
	  
	 

 Information about the Company’s exposure to currency and liquidity risk is included in note 20. 

  
 (28) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  

	11	 Other liabilities 

 

	 	a)	 Other current liabilities 

Other current liabilities comprise the following: 
  

													
	 	  	Note	 	  	 2020

$
	 	  	 2019

$
	 
	 Provision for losses on merchant accounts
	  				  	 	6,694	 	  	 	3,736	 
	 LPP contingent consideration
	  	 	4(c), 21	 	  	 	—  	 	  	 	6,000	 
	 Other
	  				  	 	438	 	  	 	139	 
		  				  	  
	  
	 	  	  
	  
	 
		  				  	 	7,132	 	  	 	9,875	 
		  				  	  
	  
	 	  	  
	  
	 

 The movements in the provision for losses on merchant accounts are as follows: 

 

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Balance – Beginning of year
	  	 	3,736	 	  	 	3,145	 
	 Provision made during the year
	  	 	4,342	 	  	 	3,299	 
	 Provision used or reversed during the year
	  	 	(1,384	) 	  	 	(2,708	) 
		  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	6,694	 	  	 	3,736	 
		  	  
	  
	 	  	  
	  
	 

  

	 	b)	 Other non-current liabilities comprise the following:

  

													
	 	  	Note	 	  	 2020

$
	 	  	 2019

$
	 
	 Other contingent consideration
	  	 	21	 	  	 	—  	 	  	 	2,470	 
	 LPP put option liability
	  	 	4(c)	 	  	 	1,036	 	  	 	1,453	 
	 Other
	  				  	 	623	 	  	 	952	 
		  				  	  
	  
	 	  	  
	  
	 
		  				  	 	1,659	 	  	 	4,875	 
		  				  	  
	  
	 	  	  
	  
	 

 The other contingent consideration is repayable 30 days following the approval of the 2020 and 2019
consolidated financial statements by the Board of Directors contingent on specified performance criteria of the acquired business. 

  
 (29) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  
 The LPP put option liability
obligates the Company, under certain circumstances and on demand after January 2022, to purchase a number of units held by the non-controlling interest (“NCI”) unitholders equal to (but not less
than) (i) the product of the total number of units held by the NCI unitholders multiplied by (ii) the total number of units in the capital of the NCI unitholders held by the concerned NCI unitholder divided by (iii) the total issued
and outstanding units of NCI unitholders. If the put option is exercised, the purchase price of the units to be purchased by the Company from the NCI unitholders pursuant to the exercise of the put option shall be equal to 100% of the fair value.

  

	12	 Loans and borrowings 

The terms and conditions of the Company’s loans and borrowings are as follows: 

 

																					
	 	  	2020	 	 	2019	 
	 	  	Note 12	 	 	 Facility

$
	 	  	 Carrying
amount

$
	 	 	 Facility

$
	 	  	Total
$	 
	 Amended and Restated Credit Facility
	  	 	(a	) 	 				  				 				  			
	 First lien term loan facilities
	  				 				  				 				  			
	 US term loan
	  				 	 	54,786	 	  	 	53,463	 	 	 	155,000	 	  	 	145,026	 
	 Canadian term loan
	  				 	 	157,185	 	  	 	153,018	 	 	 	465,000	 	  	 	413,613	 
	 Revolving credit facility
	  				 	 	100,000	 	  	 	—  	 	 	 	50,000	 	  	 	4,727	 
	 Second lien Canadian term loan facility
	  				 	 	—  	 	  	 	—  	 	 	 	225,000	 	  	 	154,435	 
		  				 				  	  
	  
	 	 				  	  
	  
	 
	 Total credit facilities
	  				 				  	 	206,481	 	 				  	 	717,801	 
	 Lease liabilities
	  	 	(c	) 	 				  	 	8,772	 	 				  	 	7,239	 
		  				 				  	  
	  
	 	 				  	  
	  
	 
		  				 				  	 	215,253	 	 				  	 	725,040	 
	 Current portion of loans and borrowings
	  				 				  	 	(2,527	) 	 				  	 	(2,874	) 
		  				 				  	  
	  
	 	 				  	  
	  
	 
	 Loans and borrowings
	  				 				  	 	212,726	 	 				  	 	722,166	 
		  				 				  	  
	  
	 	 				  	  
	  
	 

 Loans and borrowings are presented net of unamortized transaction costs. Transaction costs relating to the
issuance of loans and borrowings are amortized over the term of the debt using the effective interest rate method. 
 Information about
the Company’s exposure to interest rate, foreign currency and liquidity risks is included in note 20. 

  
 (30) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  

	 	a)	 Amended and restated credit facility 

 

	 	(i)	 The US term loan bears interest at the ABR1 plus 3.00% or
the adjusted eurocurrency2 rate plus 4.00%. As at December 31, 2020, the interest rate was 4.75% (2019 – 6.8%). 

 

	 	(ii)	 The Canadian first lien term loan facility bears interest at the Canadian prime rate plus 3.00% or
banker’s acceptance rate plus 4.00%. As at December 31, 2020, the interest rate was 4.75% (2019 – 6.8%). 

  

	 	(iii)	 The existing revolving facility bears interest at 7.25% (2019 – 9.25%) and matures on September 28,
2023. In 2019, a $50,000 cash bridge loan bearing interest at 9.25% was added and fully repaid. 

  

	 	(iv)	 A subsidiary of the Company has also entered into a Canadian second lien term loan facility totalling $225,000
bearing interest at 11.20% and maturing on September 28, 2026. The facility was fully repaid in 2020. As at December 31, 2019, the interest rate was 10.80%. 

In 2019, in connection with the SafeCharge acquisition, the credit facility was amended and restated to increase the total financing capacity
available under that facility from $315,000 to $895,000 in the form of term loans and a $50,000 revolving credit facility. This amendment resulted in a $4,830 loss on modification. The Amended and Restated Credit Facility is secured by both present
and future property and assets of the Company and has an original maturity date of September 28, 2025. 
 On August 6, 2019,
borrowings under the Amended and Restated Credit Facility were used to acquire SafeCharge. Refer to note 4 (b). 
 In 2020, the net proceeds
from the IPO were used to reduce loans and borrowing by repaying $615,600 aggregate principal amount of term loans under the first lien credit facilities and second lien credit facility. Due to the partial repayment of the first lien term loan
facilities and full repayment of the second lien term loan facility, $24,491 of unamortized transaction costs were recognized as early repayment in finance costs for the year ended December 31, 2020. 

Also in 2020, the Company modified its amended and restated credit facility to add term loans of $110,000 and to increase its revolving credit
facility from $50,000 to $100,000. Additionally, the interest rate associated with the first lien term loan facility was reduced to LIBOR plus 4.00% or Canadian prime rate plus 3.00%, as applicable. This amendment did not result in any gain or loss
on debt modification. 
  

	 	b)	 Guarantees and covenants 

Borrowings under the facilities are secured by all current and future assets of the Company and its existing and future subsidiaries. As at
December 31, 2020, the Company had letter of credit facilities issued totalling $30,100 which represent usage on the revolving credit facility. 
  

 

	1 	 The Alternate Base Rate is defined as a rate per annum equal to the higher of a) Federal funds effective rate +
0.5%; b) LIBOR plus 1%; c) Prime rate; and d) 1.75%. 

	2 	 The adjusted Eurocurrency rate is defined as an interest rate per annum equal to the greater of: a) the
Eurocurrency rate multiplied by the Statutory Reserve rate and b) 0.75%. 

  
 (31) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  
 The continued availability of the
first lien credit facilities is subject to the Company’s ability to maintain a total leverage ratio of less than or equal to 8.00 : 1.00 for the year ended December 31, 2020; 8.50 : 1.00 for the year ended December 31, 2019 with a
decrease year over year, as well as other customary affirmative and negative covenants. The total leverage ratio considers the Company’s total debt, calculated as long-term debt less unrestricted cash. The Company is in compliance with all
applicable covenants as at and for the years ended December 31, 2020 and 2019. 
  

	 	c)	 Lease liabilities 

The Company entered into lease arrangements for the use of office space. The incremental borrowing rates used to discount the leases vary
between 1.10% and 8.47% (2019 – 4.40% and 7.00%). 
 In 2020, a lease related to a right-of-use asset of an office space was renewed having the effect to increase property and equipment by $3,176 with a corresponding lease liability being recorded. 

Amounts recognized in the consolidated statements of profit or loss and comprehensive loss: 

 

									
	 	  	Leases under IFRS 16	 
	 	  	2020	 	  	2019	 
	 	  	$	 	  	$	 
	 Interest expense on lease liabilities
	  	 	384	 	  	 	522	 
	 Foreign exchange loss
	  	 	259	 	  	 	103	 
	 Variable lease payments
	  	 	1,891	 	  	 	1,747	 
		  	  
	  
	 	  	  
	  
	 
		  	 	2,534	 	  	 	2,372	 
		  	  
	  
	 	  	  
	  
	 

  

	13	 Disposal of subsidiary 

In May 2020, the Company disposed of CreditGuard, a wholly owned subsidiary of the Company, to the MAX group, for $21,108 including adjustments
at $1,108. The measurement of the assets and liabilities of CreditGuard at fair value less cost to sell resulted in an impairment of $338 being recognized in selling, general and administrative expenses. 

  
 (32) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  
 Assets and liabilities sold
comprise the following: 
  

					
	 	  	$	 
	 Goodwill
	  	 	7,664	 
	 Intangible assets
	  	 	9,689	 
	 Trade and other receivables
	  	 	1,673	 
	 Other assets
	  	 	1,864	 
		  	  
	  
	 
	 Assets disposed
	  	 	20,890	 
		  	  
	  
	 
	 Accounts payable and accrued liabilities
	  	 	779	 
	 Other liabilities
	  	 	728	 
		  	  
	  
	 
	 Liabilities disposed
	  	 	1,507	 
		  	  
	  
	 
	 Cash proceeds received, net of $2,063 in cash
	  	 	19,045	 
		  	  
	  
	 

  

	14	 Unsecured convertible debentures due to shareholders 

The IPO net proceeds were used to repay in full the principal amount, outstanding original issue discount and accrued interest, on the
unsecured convertible debenture due to shareholders in the amount of $93,384. As part of the Offering, $30,180 in principal amount and accrued interest on the unsecured convertible debentures was converted into Class A common shares of the
Company. 
 As part of the SafeCharge acquisition (see note 4(b)), unsecured convertible debentures of $199,000 were issued by the Company to
certain of its shareholders. The original issue discount (“OID”) was capitalized and amortized using the effective interest rate method. 

The debentures accrued interest annually at a fixed rate of 15%, payable in cash at the earlier of (i) maturity; and (ii) repayment
of the debentures. They had a maturity date of 11 years from the date of issuance (in 2030). After 10 years, holders representing at least 15% of the debentures could instruct the Company to engage in a process to (i) enter into an Initial
Public Offering (“IPO”) (with proceeds used to repay the debentures for cash on a priority basis); or (ii) sell the Company to third parties. Immediately prior to an IPO, the holder may convert the principal amount of debentures, plus
any accrued and unpaid interest, into Class A common shares at a conversion price per share equal to the IPO offering price. The Company concluded that the fair value of the conversion feature was nil as at December 31, 2019. 

In the event of a breach of any second lien debt covenants (see note 12), which resulted in the exercise of any of the permissible remedies by
the second lien lenders, the debentures would have been repaid in full. 
 The Company could have repaid the principal amount (plus any
accrued unpaid interest) of all outstanding debentures at any time subject to the payment of the early repayment penalty. On December 11, 2019, the Company made an early repayment of the principal and the accrued interests of $102,498 to
shareholders and the early repayment penalty was waived. 

  
 (33) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  
 The movement in the unsecured
convertible debentures due to shareholders is as follows: 
  

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Balance – Beginning of year
	  	 	109,022	 	  	 	—  	 
	 Issuance
	  	 	—  	 	  	 	199,000	 
	 Interest capitalized on unsecured debentures
	  	 	15,503	 	  	 	12,520	 
	 Conversion to Class A common shares, Series C
	  	 	(30,180	) 	  	 	—  	 
	 Cash repayment
	  	 	(93,384	) 	  	 	(102,498	) 
	 Other
	  	 	(961	) 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	109,022	 
		  	  
	  
	 	  	  
	  
	 

  

	15	 Net finance costs 

 

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Finance income
	  				  			
	 Interest on advances to third parties
	  	 	(5,427	) 	  	 	(5,188	) 
	 Finance costs
	  				  			
	 Net loss (gain) on foreign currency exchange
	  	 	11,020	 	  	 	(15,300	) 
	 Interest on loans and borrowings (excluding lease liabilities)
	  	 	42,024	 	  	 	46,152	 
	 Change in redemption amount of liability classified Class A common shares
	  	 	73,429	 	  	 	34,447	 
	 Change in redemption amount of subsidiary’s preferred shares
	  	 	3,009	 	  	 	4,255	 
	 Change in redemption amount of Company’s preferred shares
	  	 	—  	 	  	 	4,548	 
	 Gain on redemption amount of subsidiary’s preferred shares
	  	 	—  	 	  	 	(1,506	) 
	 Interest on unsecured debentures
	  	 	15,503	 	  	 	12,520	 
	 Interest expense on lease liabilities
	  	 	384	 	  	 	522	 
	 Loss on debt modification or early repayment
	  	 	24,491	 	  	 	4,830	 
	 Other interest expense
	  	 	251	 	  	 	172	 
		  	  
	  
	 	  	  
	  
	 
		  	 	—  	 	  			
		  	 	170,111	 	  	 	90,640	 
		  	  
	  
	 	  	  
	  
	 
	 Net finance costs
	  	 	164,684	 	  	 	85,452	 
		  	  
	  
	 	  	  
	  
	 

  
 (34) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  

	16	 Revenue and expenses by nature 

 

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Revenue
	  				  			
	 Merchant transaction and processing services revenue
	  	 	367,123	 	  	 	236,814	 
	 Other revenue
	  	 	7,923	 	  	 	9,002	 
		  	  
	  
	 	  	  
	  
	 
		  	 	375,046	 	  	 	245,816	 
		  	  
	  
	 	  	  
	  
	 
	 Cost of revenue
	  				  			
	 Processing cost
	  	 	64,106	 	  	 	33,753	 
	 Cost of goods sold
	  	 	5,149	 	  	 	7,005	 
		  	  
	  
	 	  	  
	  
	 
		  	 	69,255	 	  	 	40,758	 
		  	  
	  
	 	  	  
	  
	 
	 Selling, general and administrative
	  				  			
	 Commissions
	  	 	67,410	 	  	 	65,490	 
	 Depreciation and amortization
	  	 	69,673	 	  	 	51,125	 
	 Employee compensation
	  	 	57,509	 	  	 	42,367	 
	 Transaction losses
	  	 	4,182	 	  	 	3,308	 
	 Professional fees
	  	 	15,493	 	  	 	21,127	 
	 Share-based payments
	  	 	10,407	 	  	 	994	 
	 Contingent consideration adjustment
	  	 	(2,470	) 	  	 	(2,330	) 
	 Net loss on foreign currency exchange
	  	 	7,898	 	  	 	3,620	 
	 Other
	  	 	11,588	 	  	 	8,069	 
		  	  
	  
	 	  	  
	  
	 
		  	 	241,690	 	  	 	193,770	 
		  	  
	  
	 	  	  
	  
	 

 Selling, general and administrative expenses are net of investment tax credits and other government grants of
$995 for the year ended December 31, 2020 (2019 – $388). 
  

	17	 Share capital 

The Company has authorized the following classes of share capital: 
  

	 	•	 	 Multiple Voting shares – voting rights at 10 votes per share, entitled to receive dividends on a share-for-share basis from time to time as approved by the board, and convertible on a
share-for-share basis into subordinate voting share 

  

	 	•	 	 Subordinate Voting shares – voting rights at 1 vote per share, entitled to receive dividends on a share-for-share basis from time to time as approved by the board, non-convertible into any other class of shares 

 

	 	•	 	 Preferred shares – non-voting, entitled to preference over
Subordinate Voting Shares, Multiple Voting Shares and any other shares with respect to payment of dividends and distribution of assets 

  
 (35) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  
 Prior to the IPO on
September 22, 2020, the Company had the following classes of share capital authorized: 
  

	 	a)	 Common shares 

Class A common shares – Voting, right to receive dividends, participating, without par value. The Company is authorized to issue
an unlimited number of Class A common shares. There are four series of Class A common shares, with specific features applying to each series discussed below: 
  

	 	•	 	 Series A: voting rights at 1.0000001 votes per Class A common share, Series A, can be issued for
consideration in cash or property. As per the shareholder agreement, there exists a put option on a portion of the issued and outstanding Class A common shares, Series A. This put option allows the holder to require that the Company purchase
all or a part of the common shares at any time for fair value, in exchange for cash. 

  

	 	•	 	 Series B: voting rights at 1 vote per Class A common share, Series B, can be issued for consideration
paid in cash. 

  

	 	•	 	 Series C: voting rights at 1 vote per Class A common share, Series C, can be issued for consideration
paid in cash, right to exchange the shares for Class A common shares, Series B at a rate of 1:1. 

  

	 	•	 	 Series D: voting rights at 1.0000002 vote per Class A common share, Series D, can be issued for
consideration in cash or property. 

 Class B common shares – Non-voting,
right to receive dividends, participating, without par value. The Company is authorized to issue an unlimited number of Class B common shares. 
  

	 	b)	 Preferred shares 

Class A preferred shares – The Company is authorized to issue 1,000 Class A preferred shares.
Non-voting, non-participating, right to exchange as per the provisions of the shareholder agreement for Class A common shares, Series A. As per the shareholder
agreement, there exists a put option on all of the issued and outstanding Class A preferred shares in the Company in the event of a sale of the Company. This put option, then exercisable at the discretion of the holder, allows the holders to
receive compensation from other shareholders of the Company. 
 Class B preferred shares – The Company is authorized to issue
89,239,939 Class B preferred shares. Non voting, non-participating, right to exchange as per the provisions of the shareholder agreement for Class A common shares, Series A, B, C, or D, redeemable on
demand at the right of the Company and mandatorily redeemable by the Company 10 years from its issuance. Redemption value equal to $1.00 per share plus an amount equal to 15% of the initial value on an annual basis. 

  
 (36) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  

	 	c)	 Capital shares in subsidiary (Nuvei Holdings Corporation) 

A subsidiary of the Company has issued preferred shares directly to shareholders of the Company as part of the shareholder agreement, which are
authorized as follows: 
  

	 	Class	 A preferred shares – Non-voting, participating, redeemable on
demand at the right of the subsidiary or the shareholder. Redemption value equal to $1.00 per share plus an amount equal to 10% of the initial value on an annual basis. 

 

	 	Class	 B preferred shares – Non-voting, participating, right to
exchange as per the provisions of the shareholder agreement for Class B common shares in the subsidiary, redeemable on demand at the right of the subsidiary or the shareholder. Redemption value equal to $1.00 per share plus an amount equal to
10% of the initial value on an annual basis. 

  

	 	Class	 C preferred shares – Non-voting, participating, no right to
receive dividends. No shares have been issued. 

  

	 	Class	 D preferred shares – Non-voting, non-participating, redeemable on demand at the option of the Company and mandatorily redeemable by the Company at the earliest of the occurrence of certain types of events or 10 years from its issuance. Redemption
value equal to $1.00 per share. 

 The Company has issued the following share capital 

On November 2, 2020, the Company issued 6,711,923 Subordinate Voting Shares for the acquisition of Smart2Pay (note 4(a)). 

The IPO consisted of an offering of 29,171,050 Subordinate Voting Shares issued from treasury, payable on closing of the Offering for aggregate
net proceeds to the Company totalling $715,481 after deduction of $42,966 of issuance fees payable by the Company. 
 Immediately prior to
the completion of the Offering, the Company completed the following transactions (the “Reorganization”): 
  

	 	a)	 The share capital of the Company was modified to consist of an unlimited number of Multiple Voting Shares,
Subordinate Voting Shares and Class A preferred shares, issuable in series, and 1,000 Class B preferred shares; 

  

	 	b)	 An amount of $30,180 in principal amount and accrued interest on the unsecured convertible debentures was
converted into Class A common shares of the Company; 

  

	 	c)	 The outstanding Class A common shares (all series) and Class B common shares of the Company were
converted into Subordinate Voting Shares on a 2.8-for-1 basis; 

  

	 	d)	 The outstanding Class B preferred shares of NHC were converted into Subordinate Voting Shares on a 2.8-for-1 basis; 

  

	 	e)	 The outstanding Class A common shares, Class B common shares, Class A preferred shares and
Class D preferred shares of NHC held by the Company were cancelled without consideration; 

  
 (37) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  

	 	f)	 The outstanding Class A preferred shares of the Company were converted into Class B preferred shares
on a 1-for-1 basis. Certain shareholders then purchased all the Class B preferred shares. Subsequently, the Company redeemed the shares. The share capital of the
Company was then amended pursuant to articles of amendment under the CBCA to remove the Class B preferred shares from the Company’s authorized share capital and redesignate the Class A preferred shares as the “preferred
shares”; and 

  

	 	g)	 The Subordinate Voting Shares held by certain shareholders were exchanged for an equal number of Multiple
Voting Shares pursuant to share exchange agreements entered into between the Company and certain shareholders. 

 On
December 11, 2019, the Company completed a $282,320 common equity financing and issued 67,233,795 Class A common shares and 1,457,358 Class B common shares at $4.11 per share. As part of this financing, 22,830,305 Class A common
shares were issued in exchange for 89,239,939 Class B preferred shares and a portion of the financing proceeds was used to make an early repayment of debentures (note 14). 

In August 2019, the Company issued 89,239,939 Class B preferred shares for $89,240 as part of the SafeCharge acquisition (note 4(b)). An
amount of $8,000 of the Class B preferred shares issued were exchanged with preferred shares in a subsidiary of the Company. 
 On
April 1, 2019, the Company purchased 5,148,590 Class A preferred shares held in a subsidiary of the Company for a value of $5,859 including interest. In addition, on the same day, the Company purchased 53,832,077 Class D preferred
shares held in a subsidiary of the Company for a value of $53,832. These shares were purchased from shareholders and represent all the outstanding Class A and Class D preferred shares issued by a subsidiary of the Company. The purchase of
the Class A and Class D preferred shares was satisfied by the repayment of advances to shareholders of $63,391 and cash of $2,299, net of an amount of $5,982 payable to shareholders. 

  
 (38) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except for share and per
share amounts) 
  
 Classification as equity and liabilities 

The outstanding share capital of the Company, its subsidiary and related put options are classified as equity or liabilities as follows and
changes to the Company’s share capital were as follows: 
 Classified as liabilities 

 

																	
	 	  	2020	 	  	2019	 
	Type of share	  	Quantity	 	  	 Value

$
	 	  	Quantity	 	  	 Value

$
	 
	 Company’s share capital
	  				  				  				  			
	 Class A common shares, Series A
	  				  				  				  			
	 Balance – Beginning of year
	  	 	14,175,549	 	  	 	58,262	 	  	 	14,175,549	 	  	 	23,815	 
	 Conversion into Subordinate Voting Shares
	  	 	(14,175,549	) 	  	 	(131,691	) 	  	 	—  	 	  	 	—  	 
	 Changes in the redemption amount accounted as financing costs
	  	 	—  	 	  	 	73,429	 	  	 	—  	 	  	 	34,447	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	14,175,549	 	  	 	58,262	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Class B preferred shares
	  				  				  				  			
	 Balance – Beginning of year
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 
	 Issuance of shares
	  	 	—  	 	  	 	—  	 	  	 	89,239,939	 	  	 	89,240	 
	 Changes in the redemption amount accounted as financing costs
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	4,548	 
	 Exchanged for Class A common shares
	  	 	—  	 	  	 	—  	 	  	 	(89,239,939	) 	  	 	(93,788	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Subsidiary’s share capital
	  				  				  				  			
	 Class A preferred shares
	  				  				  				  			
	 Balance – Beginning of year
	  	 	—  	 	  	 	—  	 	  	 	5,148,590	 	  	 	5,859	 
	 Purchased by the parent company
	  	 	—  	 	  	 	—  	 	  	 	(5,148,590	) 	  	 	(5,859	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Class B preferred shares
	  				  				  				  			
	 Balance – Beginning of year
	  	 	32,000,000	 	  	 	39,967	 	  	 	40,000,000	 	  	 	45,218	 
	 Conversion into Subordinate Voting Shares
	  	 	(32,000,000	) 	  	 	(42,976	) 	  	 	—  	 	  	 	—  	 
	 Purchased by the parent company
	  	 	—  	 	  	 	—  	 	  	 	(8,000,000	) 	  	 	(9,506	) 
	 Changes in the redemption amount accounted as financing costs
	  	 	—  	 	  	 	3,009	 	  	 	—  	 	  	 	4,255	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	32,000,000	 	  	 	39,967	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Class D preferred shares
	  				  				  				  			
	 Balance – Beginning of year
	  	 	—  	 	  	 	—  	 	  	 	53,832,077	 	  	 	53,832	 
	 Purchased by the parent company
	  	 	—  	 	  	 	—  	 	  	 	(53,832,077	) 	  	 	(53,832	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	—  	 	  	 	—  	 	  	 	46,175,549	 	  	 	98,229	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 (39) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except for share and per
share amounts) 
  
 Classified as equity 

 

																	
	 	  	2020	 	  	2019	 
	Type of share	  	Quantity	 	  	 Value

$
	 	  	Quantity	 	  	 Value

$
	 
	 Company’s share capital
	  				  				  				  			
	 Class A common shares, Series A
	  				  				  				  			
	 Balance – Beginning of year
	  	 	68,032,894	 	  	 	103,271	 	  	 	56,702,197	 	  	 	56,702	 
	 Issuance of shares
	  	 	—  	 	  	 	—  	 	  	 	11,330,697	 	  	 	46,569	 
	 Conversion into Subordinate Voting Shares
	  	 	(68,032,894	) 	  	 	(103,271	) 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance, end of year
	  	 	—  	 	  	 	—  	 	  	 	68,032,894	 	  	 	103,271	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Class A common shares, Series B
	  				  				  				  			
	 Balance – Beginning of year
	  	 	66,739,698	 	  	 	86,145	 	  	 	60,500,000	 	  	 	60,500	 
	 Issuance of shares
	  	 	—  	 	  	 	—  	 	  	 	6,239,698	 	  	 	25,645	 
	 Conversion into Subordinate Voting Shares
	  	 	(66,739,698	) 	  	 	(86,145	) 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	66,739,698	 	  	 	86,145	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Class A common shares, Series C
	  				  				  				  			
	 Balance – Beginning of year
	  	 	56,259,910	 	  	 	72,618	 	  	 	51,000,000	 	  	 	51,000	 
	 Issuance of shares
	  	 	—  	 	  	 	—  	 	  	 	5,259,910	 	  	 	21,618	 
	 Issuance of shares – Unsecured convertible debenture conversion
	  	 	3,250,206	 	  	 	30,180	 	  	 	—  	 	  	 	—  	 
	 Conversion into Subordinate Voting Shares
	  	 	(59,510,116	) 	  	 	(102,798	) 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	56,259,910	 	  	 	72,618	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Class A common shares, Series D
	  				  				  				  			
	 Balance – Beginning of year
	  	 	44,403,491	 	  	 	182,498	 	  	 	—  	 	  	 	—  	 
	 Issuance of shares
	  	 	—  	 	  	 	—  	 	  	 	44,403,491	 	  	 	182,498	 
	 Conversion into Subordinate Voting Shares
	  	 	(44,403,491	) 	  	 	(182,498	) 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	44,403,491	 	  	 	182,498	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Class B common shares
	  				  				  				  			
	 Balance – Beginning of year
	  	 	1,457,360	 	  	 	5,990	 	  	 	—  	 	  	 	—  	 
	 Issuance of shares
	  	 	89,286	 	  	 	193	 	  	 	1,457,360	 	  	 	5,990	 
	 Conversion into Subordinate Voting Shares
	  	 	(1,546,646	) 	  	 	(6,183	) 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	1,457,360	 	  	 	5,990	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Class A preferred shares
	  				  				  				  			
	 Balance – Beginning of year
	  	 	1,000	 	  	 	1	 	  	 	1,000	 	  	 	1	 
	 Conversion into Class B preferred shares
	  	 	(1,000	) 	  	 	(1	) 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	1,000	 	  	 	1	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Class B preferred shares
	  				  				  				  			
	 Balance – Beginning of year
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 
	 Issuance of shares – Class A preferred shares conversion
	  	 	1,000	 	  	 	1	 	  	 	—  	 	  	 	—  	 
	 Redemption of shares
	  	 	(1,000	) 	  	 	(1	) 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Subordinate Voting Shares
	  				  				  				  			
	 Balance – Beginning of year
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 
	 Issuance of shares
	  				  				  				  			
	 Conversion of Class A common shares, series A, B, C, and D
	  	 	90,307,767	 	  	 	606,403	 	  	 	—  	 	  	 	—  	 
	 Conversion of Class B common and preferred shares and convertible debentures
	  	 	11,980,945	 	  	 	49,159	 	  	 	—  	 	  	 	—  	 
	 Issuance of shares
	  	 	760	 	  	 	4	 	  				  			
	 Issuance under IPO
	  	 	29,171,050	 	  	 	758,447	 	  	 	—  	 	  	 	—  	 
	 Issuance for Smart2Pay acquisition
	  	 	6,711,923	 	  	 	254,738	 	  	 	—  	 	  	 	—  	 
	 Conversion into multiple voting shares
	  	 	(92,247,808	) 	  	 	(486,062	) 	  	 	—  	 	  	 	—  	 
	 Issuance fees
	  	 	—  	 	  	 	(42,966	) 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	45,924,637	 	  	 	1,139,723	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 (40) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except for share and per
share amounts) 
  

																	
	 	  	2020	 	  	2019	 
	Type of share	  	Quantity	 	  	 Value

$
	 	  	Quantity	 	  	 Value

$
	 
	 Multiple voting shares
	  				  				  				  			
	 Balance – Beginning of year
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 
	 Issuance of shares
	  	 	92,247,808	 	  	 	486,062	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	92,247,808	 	  	 	486,062	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	138,172,445	 	  	 	1,625,785	 	  	 	236,894,353	 	  	 	450,523	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	18	 Income taxes 

Variations of income tax recovery from the basic Canadian federal and provincial combined tax rates applicable to income before income taxes
are as follows: 
  

																	
	 	  	2020	 	  	2019	 
	 	  	$	 	  	%	 	  	$	 	  	%	 
	 Loss before income taxes
	  	 	(100,583	) 	  				  	 	(74,164	) 	  			
	 Statutory tax rates
	  				  	 	26.50	 	  				  	 	26.50	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Income taxes at statutory rate
	  	 	(26,655	) 	  				  	 	(19,653	) 	  			
	 Add (deduct) effect of
	  				  				  				  			
	 Permanent difference items
	  	 	21,324	 	  				  	 	5,921	 	  			
	 Rate differential
	  	 	(3,773	) 	  				  	 	(1,679	) 	  			
	 Prior year adjustments
	  	 	2,148	 	  				  	 	(2,848	) 	  			
	 Change in unrecognized deductible temporary differences
	  	 	11,283	 	  				  	 	12,910	 	  			
	 Other
	  	 	(1,240	) 	  				  	 	650	 	  			
		  	  
	  
	 	  				  	  
	  
	 	  			
	 Total tax expense (recovery)
	  	 	3,087	 	  				  	 	(4,699	) 	  			
		  	  
	  
	 	  				  	  
	  
	 	  			

 The details of income tax expense (recovery) are as follows: 

 

									
	 	  	2020
$	 	  	2019
$	 
	 Income tax expense (recovery)
	  				  			
	 Current
	  	 	13,491	 	  	 	4,754	 
	 Deferred
	  	 	(10,404	) 	  	 	(9,453	) 
		  	  
	  
	 	  	  
	  
	 
		  	 	3,087	 	  	 	(4,699	) 
		  	  
	  
	 	  	  
	  
	 

  
 (41) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except for share and per
share amounts) 
  
 The components of current income tax expense
(recovery) are as follows: 
  

									
	 	  	2020
$	 	  	2019
$	 
	 Current income tax expense (recovery)
	  				  			
	 Current
	  	 	13,732	 	  	 	4,754	 
	 Adjustment of prior year income tax recovery
	  	 	(241	) 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 
		  	 	13,491	 	  	 	4,754	 
		  	  
	  
	 	  	  
	  
	 

 The components of deferred income tax expense (recovery) are as follows: 

 

									
	 	  	2020
$	 	  	2019
$	 
	 Deferred income tax recovery
	  				  			
	 Origination and reversal of temporary differences
	  	 	(25,281	) 	  	 	(9,453	) 
	 Change in unrecognized deductible temporary differences
	  	 	14,877	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 
		  	 	(10,404	) 	  	 	(9,453	) 
		  	  
	  
	 	  	  
	  
	 

 The details of changes of deferred income taxes are as follows for the year ended December 31, 2020: 

 

																	
	 	  	 Balance as at
December 31,
2019

$
	 	  	 Recognized
in net loss

$
	 	  	 Business
combination
and other

$
	 	  	 Balance as at
December 31,
2020

$
	 
	 Net operating tax losses carried forward
	  	 	2,009	 	  	 	277	 	  	 	—  	 	  	 	2,286	 
	 Property and equipment
	  	 	1,332	 	  	 	(2,105	) 	  	 	—  	 	  	 	(773	) 
	 Intangible assets
	  	 	(17,534	) 	  	 	10,132	 	  	 	(43,748	) 	  	 	(51,150	) 
	 Deferred costs
	  	 	(408	) 	  	 	16	 	  	 	—  	 	  	 	(392	) 
	 Accrued liabilities
	  	 	2,834	 	  	 	(1,024	) 	  	 	—  	 	  	 	1,810	 
	 Unrealized foreign exchange losses
	  	 	(1,806	) 	  	 	1,806	 	  	 	—  	 	  	 	—  	 
	 Other
	  	 	597	 	  	 	1,302	 	  	 	—  	 	  	 	1,899	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	(12,976	) 	  	 	10,404	 	  	 	(43,748	) 	  	 	(46,320	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 (42) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except for share and per
share amounts) 
  
 The details of changes of deferred income taxes are
as follows for the year ended December 31, 2019: 
  

																	
	 	  	 Balance as at
December 31,
2018

$
	 	  	 Recognized
in net loss

$
	 	  	 Business
combination

$
	 	  	 Balance as at
December 31,
2019

$
	 
	 Net operating tax losses carried forward
	  	 	529	 	  	 	1,480	 	  	 	—  	 	  	 	2,009	 
	 Property and equipment
	  	 	(764	) 	  	 	2,096	 	  	 	—  	 	  	 	1,332	 
	 Intangible assets
	  	 	(11,868	) 	  	 	6,034	 	  	 	(11,700	) 	  	 	(17,534	) 
	 Deferred costs
	  	 	(339	) 	  	 	(69	) 	  	 	—  	 	  	 	(408	) 
	 Accrued liabilities
	  	 	1,484	 	  	 	1,350	 	  	 	—  	 	  	 	2,834	 
	 Unrealized foreign exchange losses
	  	 	—  	 	  	 	(1,806	) 	  	 	—  	 	  	 	(1,806	) 
	 Other
	  	 	229	 	  	 	368	 	  	 	—  	 	  	 	597	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	(10,729	) 	  	 	9,453	 	  	 	(11,700	) 	  	 	(12,976	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 As at December 31, 2020, net deferred tax assets of $2,286 (2019 – $2,009) have been recognized
on approximately $131,815 (2019 – $72,123) tax loss carry-forwards. These tax loss carry-forwards remain available for use until 2039. 

The Company has not recognized deferred tax liabilities for the undistributed earnings of its subsidiaries in the current or prior years since
the Company does not expect to sell or repatriate funds from those investments, in which case the undistributed earnings may become taxable. Upon distribution of these earnings in the form of dividends or otherwise, the Company may be subject to
corporate and/or withholding taxes. 
  

	19	 Contingencies 

From time to time, the Company is involved in various litigation matters arising in the ordinary course of its business. Management does not
expect that the resolution of those matters, either individually or in the aggregate, will have a material effect upon the Company’s consolidated financial statements. 
  

	20	 Financial instruments 

The Company’s main financial risk exposure is detailed as follows: 

 

	 	a)	 Liquidity risk 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company is therefore
exposed to liquidity risk with respect to all of the financial liabilities recognized on the consolidated statements of financial position. 

  
 (43) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except for share and per
share amounts) 
  
 The Company manages its liquidity risk by monitoring
its operating requirements. The Company prepares budget and cash forecasts to ensure it has sufficient funds to fulfill its obligations. 

The following are the contractual maturities of financial liabilities, including estimated interest payments, as at
December 31, 2020: 
  

																	
	 	  	Contractual cash flows	 
	 	  	 Carrying
amount

$
	 	  	 Total

$
	 	  	 Less than
1 year

$
	 	  	 1 to
5 years

$
	 
	 Trade and other payables
	  	 	58,709	 	  	 	58,709	 	  	 	58,709	 	  	 	—  	 
	 Due to merchants
	  	 	443,394	 	  	 	443,394	 	  	 	443,394	 	  	 	—  	 
	 Credit facilities
	  	 	206,481	 	  	 	260,552	 	  	 	10,069	 	  	 	250,483	 
	 Lease liabilities
	  	 	8,772	 	  	 	8,772	 	  	 	2,384	 	  	 	6,388	 
	 Other liabilities
	  	 	8,791	 	  	 	8,791	 	  	 	7,132	 	  	 	1,659	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	726,147	 	  	 	780,218	 	  	 	521,688	 	  	 	258,530	 
	 Segregated funds
	  	 	(443,394	) 	  	 	(443,394	) 	  	 	(443,394	) 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	282,753	 	  	 	336,824	 	  	 	78,294	 	  	 	258,530	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 As at December 31, 2020, the Company had $180,722 of cash and unused credit facilities of $69,900. 

 

	 	b)	 Credit risk 

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. Credit risk arises principally from the Company’s cash, trade and other receivables, advances to third parties and processor deposits. The carrying amounts of these financial assets represent the maximum credit exposure. 

Impairment losses on financial assets recognized in profit or loss were as follows: 

 

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Balance – Beginning of year
	  	 	2,602	 	  	 	2,945	 
	 Written off against reserve
	  	 	(2,806	) 	  	 	(1,860	) 
	 Net remeasurement of loss allowance
	  	 	836	 	  	 	1,517	 
		  	  
	  
	 	  	  
	  
	 
	 Balance – End of year
	  	 	632	 	  	 	2,602	 
		  	  
	  
	 	  	  
	  
	 

 The credit risk associated with cash and processor deposits is limited because they are maintained only with
large financial institutions. 

  
 (44) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

 
 (in thousands of US dollars, except
for share and per share amounts) 
  
 Trade receivables 

The Company provides credit to its customers in the normal course of business. The Company evaluates the creditworthiness of the corresponding
counterparties at least at the end of each reporting period and on a specific circumstance basis. The Company’s extension of credit to customers involves considerable judgment and is based on an evaluation of each customer’s financial
condition and payment history. The Company has established various internal controls designed to mitigate credit risk, including credit limits and payment terms that are reviewed and approved by the Company. 

The following table provides information regarding the exposure to credit risk and expected credit loss for trade receivables as at
December 31, 2020: 
  

													
	 	  	 Weighted-
average
loss rate

%
	 	  	 Gross
carrying
amount

$
	 	  	 Loss
allowance

$
	 
	 Current (not past due)
	  	 	0.2	 	  	 	25,836	 	  	 	44	 
	 1-30 days past due
	  	 	8.3	 	  	 	446	 	  	 	37	 
	 31-60 days past due
	  	 	17.9	 	  	 	140	 	  	 	25	 
	 More than 60 days past due
	  	 	60.7	 	  	 	867	 	  	 	526	 
		  				  	  
	  
	 	  	  
	  
	 
		  				  	 	27,289	 	  	 	632	 
		  				  	  
	  
	 	  	  
	  
	 

 The following table provides information regarding the exposure to credit risk and expected credit loss for
trade receivables as at December 31, 2019: 
  

													
	 	  	 Weighted-
average
loss rate

%
	 	  	 Gross
carrying
amount

$
	 	  	 Loss
allowance

$
	 
	 Current (not past due)
	  	 	0.3	 	  	 	28,050	 	  	 	82	 
	 1-30 days past due
	  	 	16.8	 	  	 	750	 	  	 	126	 
	 31-60 days past due
	  	 	52.9	 	  	 	242	 	  	 	128	 
	 More than 60 days past due
	  	 	93.3	 	  	 	2,430	 	  	 	2,266	 
		  				  	  
	  
	 	  	  
	  
	 
		  				  	 	31,472	 	  	 	2,602	 
		  				  	  
	  
	 	  	  
	  
	 

 The impaired trade receivables are mostly due from customers that are experiencing financial difficulties. 

There is a significant concentration of credit risk as of December 31, 2020, with respect to the Company’s receivables from its main
processors, which represented approximately 39% (2019 – 59%) of trade and other receivables. 
 Advances to third parties

 The credit risk associated with the advances to third parties is limited because the advances are repaid by financial institutions
when the Company becomes entitled to payment under the agreements. 

  
 (45) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	 	c)	 Market risks 

Market risk is the risk that the Company will incur losses arising from adverse changes in underlying market factors, including interest and
foreign currency exchange rates. 
  

	 	i)	 Foreign currency risk 

The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates and the degrees of volatility of those
rates. Foreign currency risk is limited to the portion of the Company’s business transactions denominated in currencies other than the US dollar. Fluctuations related to foreign exchange rates could cause unforeseen fluctuations in the
Company’s operating results. 
 Approximately 46% of the Company’s revenues and approximately 30% of its expenses are in
currencies other than the US dollar. The Company does not enter into arrangements to hedge its foreign currency risk. 
 The following table
provides an indication of the Company’s significant foreign exchange currency exposures as stated in US dollars at the following dates: 
  

																					
	 	  	CAD
$	 	 	EUR
$	 	 	GBP
$	 	 	Other
$	 	 	Total
$	 
	 December 31, 2020
	  				 				 				 				 			
	 Cash
	  	 	128	 	 	 	19,031	 	 	 	8,569	 	 	 	13,385	 	 	 	41,113	 
	 Trade and other receivables
	  	 	7,645	 	 	 	5,317	 	 	 	1,222	 	 	 	3,509	 	 	 	17,693	 
	 Trade and other payables
	  	 	(16,374	) 	 	 	(17,530	) 	 	 	(1,170	) 	 	 	(13,989	) 	 	 	(49,063	) 
	 Lease liabilities
	  	 	—  	 	 	 	(79	) 	 	 	(108	) 	 	 	(3,516	) 	 	 	(3,703	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net financial position exposure
	  	 	(8,601	) 	 	 	6,739	 	 	 	8,513	 	 	 	(611	) 	 	 	6,040	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 December 31, 2019
	  				 				 				 				 			
	 Net financial position exposure
	  	 	(6,840	) 	 	 	2,940	 	 	 	4,907	 	 	 	239	 	 	 	1,246	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 A 10% strengthening of the above currencies against the US dollar would have affected the measurement of
financial instruments denominated in these currencies and affected equity and net loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales
and purchases. 

  
 (46) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

																					
	 	  	CAD
$	 	 	EUR
$	 	  	GBP
$	 	  	Other
$	 	 	Total
$	 
	 2020
	  				 				  				  				 			
	 Increase (decrease) on equity and net loss
	  	 	(860	) 	 	 	674	 	  	 	851	 	  	 	(61	) 	 	 	604	 
		  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 
	 2019
	  				 				  				  				 			
	 Increase (decrease) on equity and net loss
	  	 	(684	) 	 	 	294	 	  	 	491	 	  	 	24	 	 	 	125	 
		  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 

 A 10.0% weakening of the foreign currencies against the US dollar would have an equal but
opposite effect. 
  

	 	ii)	 Interest rate risk 

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
rates. The Company’s exposure to interest rate risk as at December 31, 2020 and 2019 is as follows: 
  

			
	 Cash
	  	Non-interest bearing
	 Segregated funds
	  	Non-interest bearing
	 Trade and other receivables
	  	Non-interest bearing
	 Advances to third parties
	  	Note 9
	 Processor deposits
	  	Variable interest rate
	 Other non-current assets
	  	Non-interest bearing
	 Trade and other payables
	  	Non-interest bearing
	 Due to merchants
	  	Non-interest bearing
	 Loans and borrowings
	  	Note 12
	 Other liabilities
	  	Note 11
	 Unsecured convertible debentures due to shareholders
	  	Note 14
	 Liability classified common and preferred shares
	  	Note 17

 The Company does not account for any fixed interest-rate financial assets or financial liabilities
at FVTPL. 
 All other loans and borrowings bear interest at floating rates, and the Company is therefore exposed to the cash flow risk
resulting from interest rate fluctuations. 
 Based on currently outstanding loans and borrowings at floating rates, an increase (decrease)
of 100 basis points in interest rates at the reporting date would have resulted in a decrease (increase) of $2,119 in profit or loss in 2020 (2019 – $7,448). This analysis assumes that all other variables, in particular foreign currency
exchange rates, remain constant. 

  
 (47) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	21	 Determination of fair values 

Certain of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes using the following methods. 

Financial assets and financial liabilities 

In establishing fair value, the Company uses a fair value hierarchy based on levels as defined below: 

 

	 	*	 Level 1: defined as observable inputs such as quoted prices in active markets. 

 

	 	*	 Level 2: defined as inputs other than quoted prices in active markets that are either directly or
indirectly observable. 

  

	 	*	 Level 3: defined as inputs that are based on little or no observable market data, therefore requiring
entities to develop their own assumptions. 

 The Company has determined that the carrying amounts of its current financial
assets and financial liabilities approximate their fair value given their short-term nature. 
 The fair value of the variable interest rate non-current liabilities approximates the carrying amount as the liabilities bear interest at a rate that varies according to the market rate. 

The fair value of fixed interest rate non-current unsecured convertible debentures due to shareholders
approximate their carrying amounts at the reporting dates. 
 As at December 31, 2020 and 2019, financial instruments measured at fair
value in the consolidated statements of financial position are as follows: 
  

																	
	 	  	Note	 	  	Fair value
hierarchy	 	  	 2020

$
	 	  	 2019

$
	 
	 Advances to a third party independent sales organization
	  	 	9	 	  	 	Level 3	 	  	 	46,680	 	  	 	51,175	 
	 LPP put option liability
	  	 	11b	) 	  	 	Level 3	 	  	 	1,036	 	  	 	1,453	 
	 Investments
	  				  	 	Level 3	 	  	 	1,148	 	  	 	1,148	 
	 Investments
	  				  	 	Level 1	 	  	 	1,093	 	  	 	954	 
	 LPP contingent consideration
	  	 	11a	) 	  	 	Level 3	 	  	 	—  	 	  	 	6,000	 
	 Other contingent consideration
	  	 	11b	) 	  	 	Level 3	 	  	 	—  	 	  	 	2,470	 

  
 (48) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 The following table presents the changes in level 3 items for the
years ended December 31, 2020 and December 31, 2019: 
  

																					
	 	  	Advance to
third party	 	 	LPP
put option
liability	 	 	Investments	 	 	LPP contingent
consideration	 	 	Other
contingent
consideration	 
	 Balance at December 31, 2018
	  	 	35,435	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	4,800	 
	 Acquisition
	  	 	20,995	 	 	 	1,187	 	 	 	29,748	 	 	 	6,000	 	 	 	—  	 
	 Disposals
	  	 	—  	 	 	 	—  	 	 	 	(28,600	) 	 	 	—  	 	 	 	—  	 
	 Merchant residuals received, net of interest on advances to third parties
	  	 	(6,483	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Fair value true-up
	  	 	1,228	 	 	 	266	 	 	 	—  	 	 	 	—  	 	 	 	(2,330	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance at December 31, 2019
	  	 	51,175	 	 	 	1,453	 	 	 	1,148	 	 	 	6,000	 	 	 	2,470	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Acquisition
	  	 	3,240	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Payment
	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(6,000	) 	 	 	—  	 
	 Merchant residuals received, net of interest on advances to third parties
	  	 	(7,222	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Fair value true-up
	  	 	(513	) 	 	 	(417	) 	 	 	—  	 	 	 	—  	 	 	 	(2,470	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Balance at December 31, 2020
	  	 	46,680	 	 	 	1,036	 	 	 	1,148	 	 	 	—  	 	 	 	—  	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 Below are the assumptions and valuation methods used in the level 3 fair value measurements: 

 

	 	*	 the fair value assumptions and method used for the advances to a third party independent sales organization are
disclosed in note 9; 

  

	 	*	 the fair value assumptions for the LPP put option liability are determined using the Black-Scholes method; the
main assumption is the fair value of the units in LPP, which has been determined to be $9,846 as at December 31, 2020; 

  

	 	*	 the fair value of the investments is determined using the estimated selling price, which has been confirmed by
subsequent sales to third parties for most of them; and 

  

	 	*	 the fair values of the LPP and other contingent considerations are determined using the calculations in the
agreements. The main assumption is the forecast of expected future cashflows. The LPP contingent consideration was fully paid as at March 31, 2020. 

  
 (49) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Varying the discount rate for advances to a third party independent
sales organization to reflect a 2% increase would have the following effects on the carrying balance. 
  

									
	 	  	December 31, 2020	 
	 	  	Increase
$	 	  	Decrease
$	 
	 Effect in change in assumption on
	  				  			
	 Advances to third party independent sales organization
	  	 	(2,895	) 	  	 	3,225	 
		  	  
	  
	 	  	  
	  
	 

  

									
	 	  	December 31, 2019	 
	 	  	Increase
$	 	  	Decrease
$	 
	 Effect in change in assumption on
	  				  			
	 Advances to third party independent sales organization
	  	 	(1,355	) 	  	 	1,311	 
		  	  
	  
	 	  	  
	  
	 

  

	22	 Net loss per share 

Previous to the IPO, the Company had three categories of potential dilutive securities: convertible
liability-classified shares, unsecured convertible debentures due to shareholders, and stock options. Since the IPO, only stock options and DSUs are considered to be potentially dilutive. 

Diluted loss per share excludes all dilutive potential shares if their effect is anti-dilutive. As a result of net losses incurred for the
years ended December 31, 2020 and 2019, the potential dilutive securities have been excluded from the calculation of diluted loss per share because including them would be anti-dilutive; therefore, basic and diluted number of shares used in the
calculation is the same for those periods. 
 Stock options and DSUs could potentially dilute earnings per share in the future. 

 

									
	 	  	2020
$	 	  	2019
$	 
	 Net loss attributable to common shareholders of the Company (basic and diluted)
	  	 	(106,230	) 	  	 	(70,502	) 
	 Net loss per share attributable to common shareholders of the Company (basic and diluted)
	  	 	(1.08	) 	  	 	(1.15	) 
	 Weighted average number of common shares outstanding (basic and diluted)*
	  	 	98,681,060	 	  	 	61,483,675	 

  

	*	 The weighted average number of common shares outstanding previous to the IPO has been adjusted to take into
consideration the Reorganization discussed in note 17. 

  
 (50) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	23	 Operating segments 

The Company has one reportable segment, the provision of technology solutions to merchants and partners in the North American and international
payment processing markets. 
 Geographic information 

The Company provides payment processing services in Canada, the United States of America, the European Union, the United Kingdom and the
rest of the world. 
 In presenting the geographic information, revenue has been based on the geographic location of merchants and non-current assets were based on the geographic location of the assets. 
  

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Non-current assets
	  				  			
	 Canada
	  	 	1,107,229	 	  	 	1,120,264	 
	 United States
	  	 	56,488	 	  	 	62,534	 
	 European Union
	  	 	342,208	 	  	 	3,330	 
	 United Kingdom
	  	 	284	 	  	 	439	 
	 Rest of the world
	  	 	5,681	 	  	 	7,008	 
		  	  
	  
	 	  	  
	  
	 
		  	 	1,511,890	 	  	 	1,193,575	 
		  	  
	  
	 	  	  
	  
	 

 Non-current assets exclude financial assets and deferred tax assets,
when applicable. 
  

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Revenue
	  				  			
	 Canada
	  	 	27,617	 	  	 	29,887	 
	 United States
	  	 	155,006	 	  	 	160,341	 
	 European Union
	  	 	132,006	 	  	 	34,407	 
	 United Kingdom
	  	 	32,826	 	  	 	9,663	 
	 Rest of the world
	  	 	27,591	 	  	 	11,518	 
		  	  
	  
	 	  	  
	  
	 
		  	 	375,046	 	  	 	245,816	 
		  	  
	  
	 	  	  
	  
	 

  
 (51) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	24	 Share-based payment arrangements 

Stock-option plan (equity-settled) 

In connection with the IPO, on September 22, 2020, the Board of Directors of the Company closed participation in its long-term incentive
stock plan (the “Legacy Option Plan”) to directors, officers, employees, consultants and any members of the Company. In its place, a new long-term incentive (the “Omnibus Incentive Plan”) was authorized. 

Legacy Option Plan 
 On
September 21, 2017, the Board of Directors of the Company authorized the Legacy Option Plan which provides for the grant of stock options to directors, officers, employees, consultants and any members of the Company. All options are to be
settled by the physical delivery of shares. The shares subject to the Legacy Option Plan shall be the Class B common shares of the Company. Under the Legacy Option Plan, the Company authorized for issuance the maximum of 11,704,100 stock
options. 
 The options expire 10 years after the date of grant and are subject to possible earlier exercise and termination under certain
circumstances. Under the Legacy Option Plan unless otherwise decided by the Board of Directors of the Company, options vest in equal instalments over five years and the expense is recognized following the accelerated method as each instalment is
fair valued separately and recorded over the respective vesting periods. 
  

	 	i)	 Final grant 

On March 16, 2020, 1,000,000 stock options (357,143 post conversion) were granted. The weighted average grant date fair value of stock
options granted was $1.55 ($4.34 post conversion). Fair value was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: 

 

					
	 Share price
	  	 	$6.15 ($17.22 post conversion)	 
	 Exercise price
	  	 	$6.15 ($17.22 post conversion)	 
	 Risk-free interest rate
	  	 	0.49%	 
	 Expected volatility
	  	 	27.6%	 
	 Dividend yield
	  	 	—  	 
	 Expected term
	  	 	5 years	 

  
 (52) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	 	ii)	 IPO Conversion: 

As part of the Reorganization described in note 17 to these consolidated financial statements, the Legacy Option Plan conditions were modified
as follows: 
  

	 	•	 	 all stock options granted prior to November 20, 2019 vested and became exercisable, at the option of the
holder, on a net basis for Subordinate Voting Shares; 

  

	 	•	 	 all stock options granted on or after November 20, 2019 continue to vest in accordance with their existing
vesting schedules, and are exercisable for Subordinate Voting Shares; 

  

	 	•	 	 no further awards will be made under the Legacy Option Plan; 

 

	 	•	 	 the clawback provision was removed as it is no longer possible that such stock options will be fully clawed back;
and 

  

	 	•	 	 the number of shares and the exercise price underlying each outstanding stock option of the Company were
adjusted, on a 2.8-to-1 basis. As such, upon completion of the Reorganization, there was 3,621,323 stock options to acquire Subordinate Voting Shares outstanding.

 The Company entered into certain option agreements governed by the Legacy Option Plan. However, other than the
characteristics described above, the options under these agreements include a clause by which the Company can claw back any of the instruments, in order to meet the maximum number of stock options authorized for issuance, in the event that the
Company grants options to other employees. Because of the clawback provision, grant date for these options is not achieved until the provision is voided. 

Prior to the IPO, the Company did not recognize any compensation expense for stock options with a clawback provision as it was expected that
these options would be fully clawed back. At the IPO and after adjusting for the Reorganization, there were 205,666 stock options outstanding with a clawback provision which vested and became exercisable. In the year ended December 31, 2020,
the Company recognized compensation expense of $4,587 as a result of these options becoming vested and the clawback provision being voided. Fair value was estimated using the Black-Scholes option pricing model with the following assumptions: 

 

					
	 Share price
	  	$	26.00	 
	 Exercise price (weighted average)
	  	$	3.75	 
	 Risk-free interest rate
	  	 	0.26	% 
	 Expected volatility
	  	 	31.0	% 
	 Dividend yield
	  	 	—  	 
	 Expected term
	  	 	5 years	 

 The risk-free interest rate is based on the yield of a zero coupon US government security with a maturity equal
to the expected life of the option from the date of the grant. The assumption of expected volatility is based on the average historical volatility of comparable companies for the period immediately preceding the option grant. The Company does not
anticipate paying any cash dividends in the foreseeable future and, therefore, uses an expected dividend yield of zero in the option-pricing model. 

  
 (53) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 Omnibus Incentive Plan 

In connection with the IPO, the Company granted to certain executive officers and employees up to 3,000,000 options to acquire Subordinate
Voting Shares having an exercise price equal to the IPO offering price of $26.00. These options will vest in successive annual periods over a period of five years after they are granted and will have a term of ten years. The Omnibus Incentive Plan
permits the Board to make awards of options, Restricted Share Units, Performance Share Units and Deferred Share Units (DSU) to eligible participants. 

The Company recognized compensation expense for Omnibus Incentive Plan stock options of $3,613 for the year ended December 31, 2020. 

The weighted average grant date fair value of stock options granted during the year ended December 31, 2020 was $8.30. Fair value was
estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions, determined on the same basis as described above: 
  

					
	 Share price
	  	$	28.71	 
	 Exercise price
	  	$	28.71	 
	 Risk-free interest rate
	  	 	0.29	% 
	 Expected volatility
	  	 	31.4	% 
	 Dividend yield
	  	 	—  	 
	 Expected term
	  	 	5.2 years	 

 The table below summarizes the changes in the outstanding stock options as adjusted for the Reorganization:

  

																	
	 	  	2020	 	  	2019	 
	 	  	Number
of options	 	  	 Weighted
average
exercise
price

$
	 	  	Number
of options	 	  	 Weighted
average
exercise
price

$
	 
	 Outstanding – Beginning of year
	  	 	3,659,375	 	  	 	4.00	 	  	 	4,180,039	 	  	 	3.18	 
	 Clawed back by the Company
	  	 	(357,143	) 	  	 	3.75	 	  	 	(796,935	) 	  	 	3.21	 
	 Forfeited
	  	 	(94,836	) 	  	 	24.57	 	  	 	(587,535	) 	  	 	4.55	 
	 Granted
	  	 	3,795,757	 	  	 	27.62	 	  	 	1,384,296	 	  	 	9.08	 
	 Exercised
	  	 	(32,648	) 	  	 	4.70	 	  	 	(520,490	) 	  	 	11.51	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Outstanding – End of year
	  	 	6,970,505	 	  	 	14.59	 	  	 	3,659,375	 	  	 	4.00	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Options exercisable – End of year
	  	 	3,132,644	 	  	 	3.71	 	  	 	842,363	 	  	 	3.13	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 (54) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 
 The following table summarizes information about stock options
outstanding and exercisable as at December 31, 2020 as adjusted for the Reorganization: 
  

																	
	 	  	Options outstanding	 	  	Options exercisable	 
	 Exercise 
price
 $
	  	Number
of options	 	  	Weighted
average
remaining
contractual
term
(in years)	 	  	Number
of options	 	  	Weighted
average
remaining
term
(in years)	 
	 2.80
	  	 	1,535,416	 	  	 	7.14	 	  	 	1,535,416	 	  	 	7.14	 
	 3.42 – 4.00
	  	 	1,036,323	 	  	 	7.72	 	  	 	1,036,323	 	  	 	7.72	 
	 4.70 – 6.30
	  	 	419,644	 	  	 	8.07	 	  	 	419,644	 	  	 	8.07	 
	 11.51 – 17.22
	  	 	628,966	 	  	 	9.03	 	  	 	141,261	 	  	 	8.66	 
	 26.00 – 47.21
	  	 	3,350,156	 	  	 	9.75	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	6,970,505	 	  	 	8.71	 	  	 	3,132,644	 	  	 	7.52	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Of the options outstanding as at December 31, 2020, a total of 3,123,204 (2019 – 2,944,899) are held
by key management personnel. 
 The table below summarizes the changes in the outstanding DSUs: 

 

									
	 	  	2020	 
	 	  	Number
of
DSUs
	 	  	Weighted
average
exercise
price
$	 
	 Outstanding – Beginning of year
	  	 	—  	 	  	 	—  	 
	 Granted
	  	 	3,076	 	  	 	26.00	 
		  	  
	  
	 	  	  
	  
	 
	 Outstanding – End of year
	  	 	3,076	 	  	 	26.00	 
		  	  
	  
	 	  	  
	  
	 

 Expense recognized in profit or loss 

The Company recognized compensation expense for stock options granted to employees of $10,407 for the year ended December 31, 2020 (2019
– $994). This amount is included in selling, general and administrative in the consolidated statements of profit or loss and comprehensive loss. 

As at December 31, 2020, the Company had $22,450 (2019 – $1,800) of unrecognized compensation expense related to unvested stock
options that is expected to be recognized over a weighted-average period of 1.9 years (2019 – 1.9 years). 

  
 (55) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	25	 Related party transactions 

Transactions with key management personnel 

Key management personnel compensation comprises the following: 
  

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Salaries and short-term employee benefits
	  	 	4,369	 	  	 	3,764	 
	 Share-based payments
	  	 	5,955	 	  	 	620	 
		  	  
	  
	 	  	  
	  
	 
		  	 	10,324	 	  	 	4,384	 
		  	  
	  
	 	  	  
	  
	 

 Other related party transactions 

 

																					
	 	  	 	 	 	Transaction values	 	  	Balance outstanding
December 31,	 
	 	  	Note	 	 	 2020

$
	 	  	 2019

$
	 	  	 2020

$
	 	  	 2019

$
	 
	 Expenses – Travel
	  	 	(i	) 	 	 	1,907	 	  	 	964	 	  	 	—  	 	  	 	—  	 
	 Unsecured convertible debentures due to shareholders
	  	 	(ii	) 	 	 	15,503	 	  	 	12,520	 	  	 	—  	 	  	 	109,022	 
		  				 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  				 	 	17,410	 	  	 	13,484	 	  	 	—  	 	  	 	109,022	 
		  				 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	 	i)	 In the normal course of operations, the Company receives services from a company owned by a shareholder of the
Company. The services received consist of travel services. 

 In August 2019, unsecured convertible debentures were issued
by the Company to shareholders. 
  

	 	ii)	 As part of the IPO in September 2020, an amount of $30,180 in principal amount and accrued interest on the
unsecured convertible debentures was converted into Class A common shares of the Company, and the remaining balance was repaid with the cash proceeds of the IPO (see note 14). 

  
 (56) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	26	 Supplementary cash flow disclosure 

 

									
	 	  	 2020

$
	 	  	 2019

$
	 
	 Changes in non-cash working capital items:
	  				  			
	 Trade and other receivables
	  	 	(875	) 	  	 	(58	) 
	 Inventory
	  	 	115	 	  	 	122	 
	 Prepaid expenses
	  	 	(2,371	) 	  	 	(1,277	) 
	 Contract assets
	  	 	(1,853	) 	  	 	(543	) 
	 Trade and other payables
	  	 	21,004	 	  	 	568	 
	 Other current and non-current liabilities
	  	 	(5,959	) 	  	 	3,855	 
		  	  
	  
	 	  	  
	  
	 
		  	 	10,061	 	  	 	2,667	 
		  	  
	  
	 	  	  
	  
	 

  

	27	 Capital disclosures 

The Company’s objective in managing capital is to ensure sufficient liquidity to pursue its organic growth strategy and undertake
selective acquisitions, while maintaining a strong credit profile and a capital structure that maintains total leverage ratio within the limits set in the Company’s credit facilities. The capital management objectives remain the same as the
prior year. 
 The Company’s capital is composed of net debt and shareholders’ equity. Net debt consists of interest-bearing debt
less cash. The Company’s use of capital is to finance working capital requirements, capital expenditures and business acquisitions. The Company funds those requirements out of its internally generated cash flows and funds drawn from its
long-term credit facilities. 
 The primary measure used by the Company to monitor its financial leverage is its total leverage ratio,
defined as the ratio of consolidated net debt outstanding to consolidated adjusted EBITDA, calculated in accordance with the terms of the agreement. Under its first lien credit facilities (note 12), the Company must maintain a total leverage ratio
of less than or equal to 8.00 : 1.00. As at December 31, 2020, the Company was in compliance with this requirement. 
 In
order to maintain or adjust its capital structure, the Company may issue or repay loans and borrowings, issue shares, repurchase shares or undertake other activities as deemed appropriate in specific circumstances. 

The Company does not currently pay dividends. Currently, the Company’s general policy on dividends is to retain cash to finance future
growth. 

  
 (57) 

 Nuvei Corporation 

Notes to Consolidated Financial Statements 

December 31, 2020 and 2019 
  

(in thousands of US dollars, except for share and per share amounts) 

 

	28	 Subsequent events 

On January 1, 2021, the Company acquired substantially all of the assets of Base Commerce LLC (“Base”), a technology-driven
payment processing company specializing in bank card and Automated Clearing House payment processing solutions. The purchase price for this acquisition totalled $96,675, of which $89,674 was paid with cash held in escrow as at December 31,
2020, including an amount of $6,186 placed in escrow in connection with adjustments to the purchase price or indemnification per the purchase agreement. The remaining amount consists of a contingent consideration of $7,001 whose payment is
contingent upon meeting certain performance metrics. The following table summarizes the preliminary amounts of assets acquired and liabilities assumed at the acquisition date: 

 

					
	 	  	Fair value
$	 
	 Assets acquired
	  			
	 Cash
	  	 	711	 
	 Segregated funds
	  	 	133,354	 
	 Trade and other receivables
	  	 	11,136	 
	 Property and equipment
	  	 	1,335	 
	 Prepaid expenses
	  	 	190	 
	 Intangible assets:
	  			
	 Technologies
	  	 	8,643	 
	 Partner and merchant relationships
	  	 	47,422	 
	 Goodwill
	  	 	32,209	 
		  	  
	  
	 
		  	 	235,000	 
	 Liabilities assumed
	  			
	 Trade and other payables
	  	 	(4,971	) 
	 Due to merchants
	  	 	(133,354	) 
		  	  
	  
	 
		  	 	96,675	 
		  	  
	  
	 
	 Total consideration
	  			
	 Cash paid
	  	 	89,674	 
	 Contingent consideration
	  	 	7,001	 
		  	  
	  
	 
		  	 	96,675	 
		  	  
	  
	 

 To finance the cash consideration noted above, as at December 31, 2020, the Company also increased its
credit facility (see note 12) by amending its credit agreement to add a term loan of $100,000 
 Goodwill arising from this acquisition
mainly consists of assembled workforce and expected synergies, which were not recorded separately since they did not meet the recognition criteria for identifiable intangible assets. 

  
 (58)EX-4.3

 Exhibit 4.3 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2020

 As used in this management’s discussion and analysis of financial condition and results of operations (“MD&A”),
unless the context indicates or requires otherwise, all references to the “Company”, “Nuvei”, “we”, “us” or “our” refer to Nuvei Corporation together with our subsidiaries, on a consolidated basis.

 This MD&A dated March 10, 2021 should be read in conjunction with the Company’s audited annual Consolidated
Financial Statements, along with the related notes thereto. The financial information presented in this MD&A is derived from the Company’s audited Consolidated Financial Statements for the year ended December 31, 2020 which have been
prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All amounts are in U.S. dollars except where otherwise indicated. Additionally,
tables included in this MD&A are presented in 000’s of U.S. dollars, unless otherwise indicated. This MD&A is presented as of the date of the audited Consolidated Financial Statements and is current to that date unless otherwise stated.

 Forward-Looking Information 

This MD&A contains “forward-looking information” within the meaning of applicable securities laws, including Nuvei’s outlook
on total volume, revenue and Adjusted EBITDA for the three months ending March 31, 2021 and the year ending December 31, 2021. Nuvei’s outlook on revenue and Adjusted EBITDA also constitutes “financial outlook” within the
meaning of applicable securities laws and is provided for the purposes of assisting the reader in understanding the Company’s financial performance and measuring progress toward management’s objectives and the reader is cautioned that it
may not be appropriate for other purposes. Forward-looking information involves known and unknown risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those that are
disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to those described under “Risks Factors”. Forward-looking information is based on management’s beliefs and
assumptions and on information currently available to management. Particularly, management’s assessments of, and outlook for, total volume, revenue and Adjusted EBITDA set out herein are generally based on the following assumptions:
(a) Nuvei’s results of operations will continue as expected, (b) the Company will continue to effectively execute against its key strategic growth priorities, despite the current COVID-19
pandemic and measures taken to contain the virus, (c) the Company will continue to retain and grow its existing customer base while adding new customers, (d) the Company will not complete any acquisitions or divestitures, (e) economic
conditions will remain relatively stable throughout the period, (f) the industries Nuvei operates in will continue to grow consistent with past experience, (g) there will be no fluctuations in currency exchange rates and volatility in
financial markets, (h) there will be no changes in legislative or regulatory matters that negatively impact Nuvei’s business, and (i) current tax laws will remain in effect and will not be materially changed. Although the
forward-looking information contained in this MD&A is based upon what management believes are reasonable assumptions, you are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking
information. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained in this MD&A is provided as of the date of this MD&A, and the Company does not undertake to update or amend such
forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law. 

  
 1 

 Overview 

We are a global provider of payment technology solutions to merchants and partners in North America, Europe, Asia Pacific and Latin America. We
believe we are differentiated by our proprietary technology platform, which is purpose-built for high-growth mobile commerce and eCommerce markets. Our focus on technology, innovation and security enables us to design and develop solutions that are
tailored for these markets. Our solutions span the entire payments stack and include a fully integrated payments engine with global processing capabilities, a turnkey solution for frictionless checkout experiences and a broad suite of data-driven
business intelligence tools and risk management services. Through a single integration, we believe our technology platform makes it simple for merchants and partners to securely accept payments in over 200 markets and nearly 150 currencies, and for
their customers to transact using 455 alternative payment methods (“APMs”). We leverage our deep industry expertise and thought leadership in mobile commerce and eCommerce payments to serve merchants of all sizes, from small-and-medium sized businesses (“SMBs”) to large enterprises, operating in some of the most complex verticals across multiple geographic markets. 

We are a single source provider of a comprehensive suite of payment solutions. Our solutions are designed to support the entire lifecycle of a
transaction across mobile or in-app, online (via Application Programming Interface (“API”) or multi-feature cashier), unattended and in-store channels while
providing what we believe is a superior payments experience. Our solutions include: 
  

	 	•	 	 End-to-end processing including
multi-currency authorization and settlement; 

  

	 	•	 	 Global gateway that is acquirer- and processor-agnostic; 

 

	 	•	 	 Turnkey checkout solution designed to increase sales conversions and simplify checkout for consumers;

  

	 	•	 	 Smart routing technology to maximize payment authorization rates; 

 

	 	•	 	 Localization capabilities allowing acceptance of nearly 150 currencies and 455 APMs and support of 28 languages
(including multiple regional varieties of English); 

  

	 	•	 	 Dynamic currency management solutions; 

 

	 	•	 	 Risk and chargeback management and fraud prevention tools; 

 

	 	•	 	 Flexible and rapid merchant enrollment, underwriting and onboarding platform; 

 

	 	•	 	 Enhanced reconciliation tools that simplify merchants’ cash flow management; and 

 

	 	•	 	 Unified reporting regardless of payment type or geographic market. 

We sell and distribute our solutions globally through three primary channels: direct sales, indirect sales and strategic platform
integrations. Our approach to distribution is designed to enable us to efficiently market our payments and technology solutions at scale and is customized by both region and vertical to optimize sales. By relying on our local sales teams and
indirect partners who act as trusted technology providers to our merchants, we believe we are able to serve more merchants globally and grow with them as they grow their businesses and expand into new markets. 

Our revenue is primarily sales volume and transaction-based, generated from merchants’ daily sales and through various fees for
value-added services provided to our merchants. We also generate subscription revenue from our business intelligence tools, merchant dashboards and other technology solutions, for which we typically charge flat subscription fees monthly. Our revenue
is largely recurring in nature due to the mission-critical nature of our product and service offerings and deep integration of our payments technology into our merchants’ Enterprise Resource Planning (ERP) systems. Additionally, our model has
delivered rapid growth in mobile commerce and eCommerce revenue. We believe the depth and breadth of our payment capabilities help merchants establish and expand their presence in emerging commerce channels across many markets. This enables us to
develop long-standing relationships with our merchants, which in turn drive strong retention and significant cross-selling opportunities. 

Initial Public Offering (“IPO”) and Base Shelf Prospectus 

On September 22, 2020, the Company filed a prospectus with the securities regulatory authorities in each of the provinces and territories
of Canada in connection with an IPO of 29,171,050 Subordinate Voting Shares at the 

  
 2 

 
offering price of $26.00 per Subordinate Voting Share in the capital of the Company. The net proceeds of $715.5 million were used to repay in full the principal amount, outstanding original
issue discount and accrued interest, on the unsecured convertible debenture due to shareholders in the amount of $93.4 million and to deleverage the Company’s financial position by repaying $615.6 million aggregate principal amount of
term loans. 
 On December 7, 2020, Nuvei filed a short form base shelf prospectus with the securities regulatory authorities in each
of the provinces and territories of Canada. The base shelf prospectus will allow Nuvei and certain of its security holders to qualify the distribution by way of prospectus in Canada of up to US $850.0 million of subordinate voting shares,
preferred shares, debt securities, warrants, subscription receipts, units, or any combination thereof, during the 25-month period that the base shelf prospectus is effective. 

Acquisitions 
 On
August 1, 2019, the Company acquired SafeCharge International Group Limited (“SafeCharge”), a European based payment service company for $5.55 in cash for each SafeCharge share, which valued the fully diluted share capital of
SafeCharge at approximately $872.5 million. SafeCharge was an attractive business with one of the leading positions in the high growth eCommerce payments market. The acquisition of SafeCharge, referred to as the “SafeCharge
acquisition”, provided many benefits to us including: 
  

	 	•	 	 broadening our merchant portfolio to include large enterprises operating in high growth verticals, such as
regulated online gaming and regulated financial services; 

  

	 	•	 	 expanding our presence in some of the most attractive and high-growth international markets with increasing
adoption of APMs; and 

  

	 	•	 	 augmenting our technology platform, adding global acquiring, global
pay-out capabilities and proprietary back-end processing. 

On November 2, 2020, the Company acquired Smart2Pay Technology & Services B.V. (“Smart2Pay”), a payment services
provider headquartered in the Netherlands for a total consideration of $336.6 million. We believe that the Smart2Pay acquisition further positions us as a leader in eCommerce payments by: 

 

	 	•	 	 expanding our network of distribution partners to include payment service providers and financial institutions
and large enterprises in Europe; 

  

	 	•	 	 enhancing our vertical expertise in social gaming and online marketplaces; 

 

	 	•	 	 expanding our presence in some of the most attractive and high-growth international markets with increasing
adoption of APMs; and 

  

	 	•	 	 expanding our global footprint and allowing us to reach and serve more merchants of varying sizes in different
regions of the world. 

 On January 1, 2021, Nuvei closed its previously announced acquisition of substantially all
the assets of Base Commerce, LLC (“Base Commerce”). Management believes that the Base Commerce acquisition further positions us as a leader in eCommerce payments by: 
  

	 	•	 	 expanding Nuvei’s product capabilities with a proprietary automated clearing house (“ACH”)
processing platform; 

  

	 	•	 	 further diversifying its acquiring portfolio; 

 

	 	•	 	 enhancing sponsor bank coverage; and 

 

	 	•	 	 enlarging the Company’s distribution network 

Impact of COVID-19 on our Operations 

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. In response,
many governments, states, cities and other geographic regions implemented preventive or protective actions such as temporary closures of businesses, quarantines or
shelter-in-place orders. As a result, in March 2020, our year-over-year volume growth (on a combined basis including SafeCharge as if the SafeCharge acquisition had
occurred on 

  
 3 

 
January 1, 2019) began to slow. However, our eCommerce merchants continued to perform as compared to the prior year. 

In response to the COVID-19 pandemic, we adopted a “people-first” approach, prioritizing the
health and safety of our employees and local communities and quickly deploying all employees to a “work from home” model. There were no employee layoffs or furloughs because of the COVID-19 pandemic.
We implemented our business continuity plan, which included merchant portfolio management (enhanced review and monitoring of merchants in affected industries; amended billing process from monthly to daily) and supply chain management (outreach to
ensure continuity of service or supply; negotiated discounts where applicable). 
 The COVID-19
pandemic has disrupted the economy and put unprecedented strains on governments, health care systems, businesses and individuals around the world. The impact and duration of the COVID-19 pandemic are difficult
to assess or predict. The spread of COVID-19 has caused us to modify our business practices to help minimize the risk of the virus to our employees, our partners, our merchants and their customers, and the
communities in which we participate. The extent and continued impact of the COVID-19 pandemic on our business will depend on certain developments, including: the duration and spread of the outbreak; government
responses to the pandemic; the impact on our customers and our sales cycles; the impact on customer, industry or employee events; and the effect on our partners, merchants and their customers, third-party service providers, customers and supply
chains, all of which are uncertain and cannot be predicted. Accordingly, there is a higher level of uncertainty with respect to management’s judgments, assumptions and estimates. Please refer to “Risks Relating to Our Business and Industry
– The ongoing COVID-19 pandemic, including the resulting global economic uncertainty and measures taken in response to the pandemic, could materially impact our business and future results of operations
and financial condition”, for additional detail on how COVID-19 may impact our future results. 
 Non-IFRS Measures 
 Nuvei’s annual Consolidated Financial Statements have been prepared in
accordance with IFRS as issued by the International Accounting Standards Board. The information presented in this MD&A includes non-IFRS financial measures, namely Adjusted EBITDA, Adjusted net income,
Adjusted net income per share, and Adjusted net income per diluted share. These measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures
presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly,
these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. Adjusted EBITDA and Adjusted net income are used to provide investors with a supplemental measure
of the Company’s operating performance and thus highlight trends in Nuvei’s core business that may not otherwise be apparent when relying solely on IFRS measures. The Company’s management also believes that securities analysts,
investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Nuvei’s management also uses non-IFRS measures in order to
facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. The Company’s management believes Adjusted EBITDA and Adjusted net
income are important supplemental measures of Nuvei’s performance, primarily because they and similar measures are used widely among others in the payments industry as a means of evaluating a company’s underlying operating performance.
Adjusted EBITDA is defined as net income (loss) before finance costs, finance income, depreciation and amortization, income taxes expense/recovery, acquisition, integration and severance costs, share-based payments, net gain/loss on foreign currency
exchange, and other. Adjusted net income is defined as net income (loss) before acquisition, integration and severance costs, share-based payments, net gain/loss on foreign currency exchange, amortization of certain intangible assets created by
business combinations, and the related income tax expense or recovery for these items. Adjusted net income also excludes change in redemption value of liability-classified common and preferred shares and accelerated amortization of deferred
transaction costs and loss on debt modification. 

  
 4 

 Reconciliation of Adjusted EBITDA to net income (loss) 

Adjusted EBITDA is defined as net income (loss) before finance costs, finance income, depreciation and amortization, income taxes expense
(recovery), acquisition, integration and severance costs, share-based payments, net loss (gain) on foreign currency exchange, and other. 

The following table reconciles Adjusted EBITDA to net income (loss) for the periods indicated: 

 

																	
	 	  	Three months ended
December 31	 	  	Year ended December 31	 
	(In thousands of U.S. dollars)	  	2020	 	  	2019	 	  	2020	 	  	2019	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Net income (loss)
	  	 	22,577	 	  	 	(3,077	) 	  	 	(103,670	) 	  	 	(69,465	) 
	 Finance cost (recovery)
	  	 	(1,257	) 	  	 	19,254	 	  	 	170,111	 	  	 	90,640	 
	 Finance income
	  	 	(1,257	) 	  	 	(1,130	) 	  	 	(5,427	) 	  	 	(5,188	) 
	 Depreciation and amortization
	  	 	18,410	 	  	 	17,041	 	  	 	69,673	 	  	 	51,125	 
	 Income tax expense (recovery)
	  	 	(892	) 	  	 	(4,160	) 	  	 	3,087	 	  	 	(4,699	) 
	 Acquisition, integration and severance costs
(a)
	  	 	4,673	 	  	 	2,785	 	  	 	9,970	 	  	 	19,914	 
	 Share-based payments (b)
	  	 	3,200	 	  	 	227	 	  	 	10,407	 	  	 	994	 
	 Net loss (gain) on foreign currency exchange
(c)
	  	 	4,780	 	  	 	1,018	 	  	 	7,898	 	  	 	3,620	 
	 Legal settlement costs and other (d)
	  	 	1,079	 	  	 	(16	) 	  	 	933	 	  	 	259	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Adjusted EBITDA(e) 
	  	 	51,313	 	  	 	31,942	 	  	 	162,982	 	  	 	87,200	 
	 Advance from third party—merchant residual received(f)
	  	 	2,946	 	  	 	4,303	 	  	 	12,469	 	  	 	11,671	 

  

	(a)	 These expenses relate to: 

 

	 	(i)	 professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities
and financing activities during the period and our IPO, which were $5,669 and $10,852 for the three months and year ended December 31, 2020, respectively (December 31, 2019—$2,328 and $19,881, respectively). These costs are presented in
the professional fees line item of selling, general and administrative expenses. 

	 	(ii)	 acquisition-related compensation, which was $80 and $803 for the three months and year ended December 31,
2020, respectively (December 31, 2019 – $241 and $964, respectively). These costs are presented in the employee compensation line item of selling, general and administrative expenses. 

	 	(iii)	 change in deferred purchase consideration for previously acquired businesses, which was a gain of $1,200 and
$2,470 for the three months and year ended December 31, 2020, respectively (December 31, 2019—$117 and $2,415, respectively). These adjustments are presented in selling, general and administrative expenses. 

	 	(iv)	 severances, which were $121 and $741 for the three months and year ended December 31, 2020, respectively
(December 31, 2019 – $296 and $1,187, respectively), and integration expenses. Severance costs are presented in the employee compensation line item of selling, general and administrative expenses. 

	(b)	 These expenses represent non-cash expenses recognized in connection
with stock options and other awards issued under share-based plans. 

	(c)	 This includes losses on foreign currency exchange included in selling, general and administration expenses.

	(d)	 This line item primarily represents legal settlements and associated legal costs reached outside of the normal
course of business, which were $203 and $589 for the three months and year ended December 31, 2020 (December 31, 2019—$292 and $716), as well as non-cash gains, losses and provisions and certain
other costs. These costs are presented in the other line item of the selling, general and administrative expenses. 

	(e)	 Adjusted EBITDA is a non-IFRS measure that the Company uses to assess
its operating performance and cash flows. 

	(f)	 Commencing in 2018, the Company entered into various agreements with a single third-party independent sales
organization to acquire the rights to future cash flows from a portfolio of merchant contracts. 

  
 5 

 Reconciliation of Pro Forma Transaction Adjusted Revenue to Revenue 

 

																	
	 	  	Three months ended
December 31	 	  	Year ended December 31	 
	(In thousands of U.S. dollars)	  	2020	 	  	2019	 	  	2020	 	  	2019	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Revenue
	  	 	115,881	 	  	 	79,327	 	  	 	375,046	 	  	 	245,816	 
	 SafeCharge Revenue (prior to SafeCharge
acquisition)(a)
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	92,293	 
	 Adjustments(a)(b)
	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	(26,345	) 
	 Smart2Pay Revenue (prior to Smart2Pay acquisition)
	  	 	3,619	 	  	 	8,580	 	  	 	31,515	 	  	 	30,187	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Pro Forma Transaction Adjusted Revenue
	  	 	119,500	 	  	 	87,907	 	  	 	406,561	 	  	 	341,951	 

  

	(a)	 Refer to “Selected Consolidated Financial Information” in the Company’s supplemented prep
prospectus dated September 16, 2020. 

	(b)	 Eliminates interchange fees from SafeCharge revenue to show revenue on a net basis, consistent with
Nuvei’s revenue recognition policy. Prior to the SafeCharge acquisition, SafeCharge recorded revenue on a gross basis, including interchange fees. In contrast, Nuvei records revenue on a net basis, with interchange fees recorded as a reduction
of revenue. 

 Reconciliation of Adjusted net income to net income (loss) 

Adjusted net income is defined as net income before acquisition, integration and severance costs, share-based payments, net gain/loss on
foreign currency exchange, amortization of acquisition-related intangible assets, and the related income tax expense or recovery for these items. Adjusted net income also excludes change in redemption value of liability-classified common and
preferred shares and accelerated amortization of deferred transaction costs / loss on debt modification. 
 The following table reconciles
Adjusted net income to net income (loss) for the periods indicated: 
  

																	
	 	  	Three months ended
December 31	 	  	Year ended
December 31	 
	(In thousands of U.S. dollars except for per share amounts)	  	2020	 	  	2019	 	  	2020	 	  	2019	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Net income (loss)
	  	 	22,577	 	  	 	(3,077	) 	  	 	(103,670	) 	  	 	(69,465	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Change in redemption value of liability-classified common and preferred shares (a)
	  	 	—  	 	  	 	3,616	 	  	 	76,438	 	  	 	41,744	 
	 Accelerated amortization of deferred transaction costs / loss on debt modification(b)
	  	 	—  	 	  	 	—  	 	  	 	24,491	 	  	 	4,830	 
	 Amortization of acquisition-related intangible assets (c)
	  	 	16,008	 	  	 	14,612	 	  	 	59,219	 	  	 	42,846	 
	 Acquisition, integration and severance costs
(d)
	  	 	4,673	 	  	 	2,785	 	  	 	9,970	 	  	 	19,914	 
	 Share-based payments (e)
	  	 	3,200	 	  	 	227	 	  	 	10,407	 	  	 	994	 
	 Net loss (gain) on foreign currency exchange
(f)
	  	 	1,029	 	  	 	(10,725	) 	  	 	18,918	 	  	 	(11,680	) 
	 Legal settlement costs and other (g)
	  	 	1,079	 	  	 	(16	) 	  	 	933	 	  	 	259	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Adjustments
	  	 	25,989	 	  	 	10,499	 	  	 	200,376	 	  	 	98,907	 
	 Income tax expense related to
adjustmentsh
	  	 	(2,074	) 	  	 	(2,058	) 	  	 	(7,720	) 	  	 	(7,096	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Adjusted net income (loss) (i)

	  	 	46,492	 	  	 	5,364	 	  	 	88,986	 	  	 	22,346	 
	 Adjusted net income per share attributable to common shareholders of the Company (j)
	  				  				  				  			
	 Basic
	  	 	0.34	 	  	 	0.06	 	  	 	0.88	 	  	 	0.35	 
	 Diluted
	  	 	0.33	 	  	 	0.06	 	  	 	0.84	 	  	 	0.33	 

  
 6 

	(a)	 This line item represents change in redemption value related to shares classified as liabilities prior to the
IPO. As part of the IPO, the shares were converted into equity as Subordinate Voting Shares. These expenses are included in finance costs. 

	(b)	 With the repayment of long-term debt from the IPO proceeds, the associated deferred transaction costs were
recognized in finance costs on an accelerated pro-rata basis. Additionally, in 2019 a loss on debt modification was recognized because of the incremental debt taken to fund the SafeCharge acquisition.

	(c)	 This line item relates to amortization expense taken on intangible assets created from the purchase price
adjustment process on acquired companies and businesses and from the acquisition of all the outstanding shares of Pivotal Holdings Ltd. by Nuvei in September 2017, and excludes amortization expense related to capitalized development costs incurred
in the normal course of operations. 

	(d)	 These expenses relate to 

	 	(i)	 professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities
and financing activities during the period and our IPO, which were $5,669 and $10,852 for the three months and year ended December 31, 2020, respectively (December 31, 2019—$2,328 and $19,881, respectively). These costs are presented in
the professional fees line item of selling, general and administrative expenses. 

	 	(ii)	 acquisition-related compensation, which was $80 and $803 for the three months and year ended December 31,
2020, respectively (December 31, 2019 – $241 and $964, respectively). These costs are presented in the employee compensation line item of selling, general and administrative expenses. 

	 	(iii)	 change in deferred purchase consideration for previously acquired businesses, which was a gain of $1,200 and
$2,470 for the three months and year ended December 31, 2020, respectively (December 31, 2019—$117 and $2,415, respectively). These adjustments are presented in selling, general and administrative expenses. 

	 	(iv)	 severances, which were $121 and $741 for the three months and year ended December 31, 2020, respectively
(December 31, 2019 – $296 and $1,187, respectively), and integration expenses. Severance costs are presented in the employee compensation line item of selling, general and administrative expenses. 

	(e)	 These expenses represent non-cash expenses recognized in connection
with stock options and other awards issued under share-based plans. 

	(f)	 This includes gains or losses on foreign currency exchange included in finance costs and selling, general and
administration expenses. 

	(g)	 This line item primarily represents legal settlements and associated legal costs reached outside of the normal
course of business, which were $203 and $589 for the three months and year ended December 31, 2020 (December 31, 2019—$292 and $716), as well as non-cash gains, losses and provisions and certain
other costs. These costs are presented in the other line item of the selling, general and administrative expenses. 

	(h)	 This line item reflects income tax expense on taxable adjustments using the tax rate of the applicable
jurisdiction. 

	(i)	 Adjusted net income is a non-IFRS measure that the Company uses to
further assess its operating performance. 

	(j)	 Adjusted net income per diluted share is calculated using stock options outstanding at the end of each period
on a fully diluted basis if they were in-the-money at that time. 

Key Performance Indicator 
 We monitor the
following key performance indicator to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. Our key performance indicator may be calculated in a manner
that differs from similar key performance indicators used by other companies. 
 Total Volume: We believe total volume is an
indicator of performance of our business. Total volume and similar measures are used widely among others in the payments industry as a means of evaluating a company’s performance. We define total volume as the total dollar value of transactions
processed in the period by merchants under contractual agreement with us. Total volume does not represent revenue earned by us. Total volume encompasses both acquiring volume, where we are in the flow of funds in the settlement transaction cycle,
and gateway/technology volume, where we provide our gateway/technology services but are not in the flow of funds in the settlement transaction cycle. Since our revenue is primarily sales volume and transaction-based, generated from merchants’
daily sales and through various fees for value-added services provided to our merchants, fluctuations in total volume will generally impact our revenue. 

  
 7 

 Outlook 

Nuvei anticipates total volume, revenue and adjusted EBITDA to be in the following ranges: 

 

					
	(In U.S. dollars)	  	Three months ending
March 31, 2021	  	Year ending
December 31, 2021
	 	  	$	  	$
	 Total Volume (in billions)
	  	19 - 20	  	81 - 87
	 Revenue (in millions)
	  	136 - 142	  	570 -  600
	 Adjusted EBITDA (in millions)
	  	60 - 63	  	252 - 265

 The above financial outlook is based on a number of assumptions as described under “Forward-Looking
Information” in this MD&A. 
 Summary of Factors Affecting Our Performance 

We believe that the growth and future success of our business depends on many factors, including those described below. While each of these
factors presents significant opportunities for our business, they also pose important challenges, some of which are discussed below and in the “Risks Relating to Our Business and Industry” section. 

Growth with our Existing Merchants. Our success is directly correlated with our merchants’ success. We focus on the
high-growth mobile and eCommerce markets and we will grow alongside our existing merchants as they grow their business and expand into new markets. In addition, our existing customers represent a significant opportunity to cross-sell and up-sell products and services with limited incremental sales and marketing expenses. As our merchants increase their business volume, we can offer more solutions from our Native Commerce Platform. Our future revenue
growth and achieving and maintaining profitability is dependent upon our ability to maintain existing customer relationships and to continue to expand our customers’ use of our comprehensive suite of solutions. 

Ability to Acquire New Merchants and Partners. Our future revenue growth will also largely depend upon the effectiveness of our
sales and marketing efforts, both domestically and internationally. We have significant sales and marketing experience in capturing and serving SMBs in North America and large enterprises in Europe. We intend to leverage this experience and enable
merchant base expansion by targeting large enterprises in North America, with a focus in the mobile commerce and eCommerce channels. We also plan to expand and deepen our footprint in geographies where we have an emerging presence today, such as
Asia Pacific and Latin America. Key to our success in achieving merchant base expansion is continued investment in our direct sales team and further leveraging our broad and diversified network of distribution partners. 

Investment in our Technology and Product Portfolio. We believe our technology-first culture enables us to enhance our offerings
to remain at the forefront of payments innovation. Specifically, our Native Commerce Platform enables us to deliver comprehensive payments and technology solutions to power a convenient and secure transaction experience for our merchants and their
customers. Further investment in this platform is necessary to expand and keep technologically current our portfolio of services to our merchants. Close collaboration with our merchants through ongoing communication and feedback loop is also key, as
it enables a better design and delivery of solutions that meet their specific and evolving needs. 
 Ability to Maintain and Add to
our Acquiring Banks Relationships. We have built strong relationships with acquiring banks in North America. The maintenance and/or expansion of these relationships and strong collaboration on maintaining adequate procedures in monitoring
the risk profile of our merchant base will be a key enabler in the pursuit of our growth strategies. 

  
 8 

 Adapt to Regulatory Changes. The nature of our product and services offerings
necessitates that we adhere to strict regulatory regimes in the countries that we operate. Our operational teams are fully versed in the varying regulatory requirements. As regulations change, we will continue to upskill and modify, as appropriate,
our merchant underwriting, risk management, Know Your Client and Anti Money Laundering capabilities, in as seamless as possible a manner to minimize disruption to our merchants’ businesses. 

Successful Execution on Recent and Future Acquisitions. We intend to augment our organic growth with strategic and tactical
acquisitions. Critical to our success is continuing to be highly disciplined in integrating recent acquisitions, such as SafeCharge, Smart2Pay and the Base Commerce acquisition, and future acquisitions into our Company in a manner that allows us to
fulfill the potential that these acquisitions bring. 
 Economic conditions and resulting consumer spending trends. Changes in
macro-level consumer spending trends, including COVID-19, could affect the total volume processed on our platform, thus resulting in fluctuations to our revenue. 

Key Components of Results of Operations 
 Revenue

 Merchant Transaction and Processing Services. Revenue from the Company’s merchant transaction and processing
services revenue are derived primarily from eCommerce and retail point-of-sale payment processing services, and stem from relationships with individual merchants.
Additionally, transaction and processing services revenue stem from contracts with financial institutions and other merchant acquirers, the terms of which generally range from three to five years. The contracts stipulate the types of services and
set forth how fees will be incurred and calculated. Merchant transaction and processing services revenue are generated from processing electronic payment transactions for merchants. 

The Company’s transaction and processing revenue is primarily comprised of (a) fees calculated based on a percentage of monetary
value of transactions processed; (b) fees calculated based on number of transactions processed; (c) service fees; or (d) some combination thereof that are associated with transaction and processing services. 

The Company presents revenue net of the interchange fees charged by the card issuing financial institutions and the fees charged by the
payment networks. 
 Other Revenue. The Company may sell hardware (“point-of-sale equipment”) as part of its contracts with customers. Hardware consists of terminals or gateway devices. The Company does not manufacture hardware but purchases hardware from third
party vendors and holds the hardware in inventory until purchased by a customer. 
 For more information on our revenue recognition
policies, refer to Note 3 of the Consolidated Financial Statements. 
 Cost of Revenue 

Processing costs. Processing fees consist of fees paid to processing suppliers. When we are the primary obligor providing payment
processing services, we record processing fees paid to processing suppliers as a cost of revenue. If we are not the primary obligor providing payment processing services, processing fees are netted from the revenue recorded for such transaction and
we do not record separate processing fees as a cost of revenue. 
 Costs of goods sold. Costs of goods sold consist primarily
of costs associated with selling point-of-sale equipment, such as the cost of acquiring the equipment, including purchase price, expenses associated with a third-party
fulfillment company, shipping and handling and inventory adjustments. 

  
 9 

 Selling, General and Administrative Expenses 

Our selling, general and administrative expenses primarily represent the amounts associated with (i) commissions, (ii) depreciation and
amortization, and (iii) employee compensation. 
 Commissions. Commissions are comprised of incentives paid to third
party agents for referring merchants. 
 Depreciation. Depreciation consists of depreciation of property and equipment,
primarily terminals, office and computer equipment, furniture and fixtures, leasehold improvements and right of use assets over buildings. We calculate depreciation using the straight-line method over the useful life of the relevant asset or over
the remaining lease term, as applicable. 
 Amortization. Amortization consists primarily of amortization of intangible
assets, which consist of internally generated and externally purchased software that is used in providing processing services to customers. It also includes trademarks, technologies and partner and merchant relationships, that are acquired by the
Company. These intangible assets are amortized on a straight-line basis over the course of the relevant asset’s useful life. 

Employee compensation. Employee compensation consists of salaries and compensation paid to our employees except for share-based
payments. The employee compensation includes costs related to the various functions of the Company, including technology, sales and marketing, operations, as well as various business support functions. 

Selling, general and administrative expenses also consist of transaction losses, professional fees, share-based payments,
contingent consideration adjustment, net (gain) loss on foreign currency exchange, and other. 
 We anticipate increases in general and
administrative expenses as we incur the costs of compliance associated with being a public company, including increased accounting and legal expenses. See “Risks Relating to Regulation” section. 

Net Finance Costs 
 Net finance costs primarily
represent amounts associated with: 
 Net (gain) loss on foreign currency exchange. Our Canadian subsidiary, which has Canadian
dollars as its functional currency, has U.S.- denominated debt. This debt is translated into the Canadian functional currency using the exchange rates prevailing at the date of the transactions or when items are
re-measured at the end of the reporting period. The resulting gains and losses subsequently being recognized are recorded in finance costs. 

Interest on loans and borrowings Interest expense consists primarily of interest incurred on the (i) term loans outstanding
under the Credit Facilities and (ii) unsecured convertible debenture issued by the Company to certain of its shareholders as part of the SafeCharge acquisition, which were partially redeemed in December 2019 and the remainder converted into
shares or redeemed with the IPO proceeds. 
 Change in redemption amount of liability classified common and preferred shares.
The Company and a subsidiary of the Company issued common and preferred shares that were redeemable, under certain conditions, at a fixed price plus an amount equal to 10% to 15% of the initial value calculated on an annual basis or at fair value.
The change in redemption amount of the liability classified shares issued by the Company and the Company’s subsidiary was recognized in the statement of profit or loss and comprehensive loss using the effective interest rate. These shares were
converted into Subordinate Voting Shares as part of the IPO process. 
 Interest income on advances to third parties.
Commencing in Fiscal 2018, the Company issued advances to a third-party independent sales organization. Under the agreements with the third-party independent sales organization, the Company acquired the rights to cash flows from a portfolio of
merchant contracts. The agreements provide for minimum guaranteed payments for the first three years. After the first three years, the portfolio of merchants is fixed, 

  
 10 

 
and the cash flows are no longer guaranteed at which point the receipts will flow through the consolidated statement of profit or loss. 

Income tax expense 
 Income tax
expense comprises current and deferred taxes. Current and deferred taxes are recognized in profit or loss except to the extent that they relate to a business combination, or items recognized directly in equity or in other comprehensive income
(loss). 

  
 11 

 Results of Operations 

The following table outlines our consolidated profit or loss and comprehensive loss information for the three months and year ended
December 31, 2020 and 2019: 
  

																	
	(In thousands of U.S. dollars except for share and per share amounts)	  	Three months ended December 31	 	  	Year ended December 31	 
	  	2020	 	  	2019	 	  	2020	 	  	2019	 
	  	$	 	  	$	 	  	$	 	  	$	 
	 Revenue
	  	 	115,881	 	  	 	79,327	 	  	 	375,046	 	  	 	245,816	 
	 Cost of revenue
	  	 	23,519	 	  	 	13,075	 	  	 	69,255	 	  	 	40,758	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Gross profit
	  	 	92,362	 	  	 	66,252	 	  	 	305,791	 	  	 	205,058	 
	 Selling, general and administrative expenses
	  	 	73,191	 	  	 	55,365	 	  	 	241,690	 	  	 	193,770	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Operating profit
	  	 	19,171	 	  	 	10,887	 	  	 	64,101	 	  	 	11,288	 
	 Finance income
	  	 	(1,257	) 	  	 	(1,130	) 	  	 	(5,427	) 	  	 	(5,188	) 
	 Finance costs (recovery)
	  	 	(1,257	) 	  	 	19,254	 	  	 	170,111	 	  	 	90,640	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Net finance costs
	  	 	(2,514	) 	  	 	18,124	 	  	 	164,684	 	  	 	85,452	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Income (loss) before income tax
	  	 	21,685	 	  	 	(7,237	) 	  	 	(100,583	) 	  	 	(74,164	) 
	 Income tax expense (recovery)
	  	 	(892	) 	  	 	(4,160	) 	  	 	3,087	 	  	 	(4,699	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Net income (loss)
	  	 	22,577	 	  	 	(3,077	) 	  	 	(103,670	) 	  	 	(69,465	) 
	 Other comprehensive income (loss)
	  				  				  				  			
	 Foreign operations – foreign currency translation differences
	  	 	18,394	 	  	 	(10,068	) 	  	 	32,855	 	  	 	(9,225	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total comprehensive income (loss)
	  	 	40,971	 	  	 	(13,145	) 	  	 	(70,815	) 	  	 	(78,690	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Net income (loss) attributable to:
	  				  				  				  			
	 Common shareholders of the Company
	  	 	21,726	 	  	 	(3,587	) 	  	 	(106,230	) 	  	 	(70,502	) 
	 Non-controlling interest
	  	 	851	 	  	 	510	 	  	 	2,560	 	  	 	1,037	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	22,577	 	  	 	(3,077	) 	  	 	(103,670	) 	  	 	(69,465	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Comprehensive income (loss) attributable to
	  				  				  				  			
	 Common shareholders of the Company
	  	 	40,120	 	  	 	(13,655	) 	  	 	(73,375	) 	  	 	(79,727	) 
	 Non-controlling interest
	  	 	851	 	  	 	510	 	  	 	2,560	 	  	 	1,037	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	40,971	 	  	 	(13,145	) 	  	 	(70,815	) 	  	 	(78,690	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Weighted average number of common shares outstanding(a)
	  				  				  				  			
	 Basic
	  	 	135,837,128	 	  	 	75,751,716	 	  	 	98,681,060	 	  	 	61,483,675	 
	 Diluted
	  	 	139,929,183	 	  	 	75,751,716	 	  	 	98,681,060	 	  	 	61,483,675	 
	 Net income (loss) per share attributable to common shareholders of the Company
	  				  				  				  			
	 Basic
	  	 	0.16	 	  	 	(0.05	) 	  	 	(1.08	) 	  	 	(1.15	) 
	 Diluted
	  	 	0.16	 	  	 	(0.05	) 	  	 	(1.08	) 	  	 	(1.15	) 

  

	(a)	 The weighted average number of common shares outstanding previous to the IPO has been adjusted to take into
consideration the Reorganization discussed in Note 17 of the Consolidated Financial Statements. 

  
 12 

 Results of Operations for the Three Months Ended December 31, 2020 and 2019 

Revenue 
  

																	
	(In thousands of U.S. dollars, except for percentages)	  	Three months ended December 31	 	  	 	 
	  	2020	 	  	2019	 	  	Change	 	  	Change	 
	  	$	 	  	$	 	  	$	 	  	%	 
	 Revenue
	  	 	115,881	 	  	 	79,327	 	  	 	36,554	 	  	 	46	 

 For the three months ended December 31, 2020, revenue increased by $36.6 million or 46% as compared
to the three months ended December 31, 2019. The increase is due to total volume growth primarily driven by organic growth and partly due to the Smart2Pay acquisition in November 2020. 

Total volume increased from $9.1 billion in the three months ended December 31, 2019 to $13.9 billion in the three months ended
December 31, 2020, an increase of $4.8 billion or 53%. 
 On a combined basis as if the SafeCharge and Smart2Pay acquisitions had
occurred on January 1, 2019, total volume would have been $14.1 billion in the three months ended December 31, 2020, compared to $9.5 billion in the three months ended December 31, 2019, an increase of $4.6 billion or
48%. 
 Assuming the SafeCharge acquisition and Smart2Pay acquisition had occurred on January 1, 2019, revenue would have been
$119.5 million for the three months ended December 31, 2020, compared to $87.9 million for the three months ended December 31, 2019, an increase of $31.6 million or 36%. 

Cost of Revenue 
  

																	
	(In thousands of U.S. dollars, except for percentages)	  	Three months ended December 31	 	 	 	 
	  	2020	 	 	2019	 	 	Change	 	  	Change	 
	 Cost of revenue
	  	$	23,519	 	 	$	13,075	 	 	$	10,444	 	  	 	80	% 
	 As a percentage of revenue
	  	 	20.3	% 	 	 	16.5	% 	 				  			

 For the three months ended December 31, 2020, cost of revenue increased by $10.4 million or 80% as
compared to the three months ended December 31, 2019 due to an increase of $11.0 million or 98% in processing costs, partially offset by a decrease in cost of goods sold of $0.6 million. 

The increase in processing costs is primarily driven by organic growth and the inclusion of Smart2Pay as of November 2020. Cost of revenue as
a percentage of revenue increased from 16.5% for the three months ended December 31, 2019 to 20.3% for the three months ended December 31, 2020 due to SafeCharge and Smart2Pay having a higher cost of revenue than Nuvei’s operation in
the North American market due to costs associated with its merchant servicing model. 

  
 13 

 Selling, General and Administrative expenses 

 

																	
	(In thousands of U.S. dollars, except for percentages)	  	Three months ended December 31	 	  	 	 
	  	2020	 	  	    2019    	 	  	Change	 	  	Change	 
	  	$	 	  	$	 	  	$	 	  	%	 
	 Selling, General and Administrative expenses
	  				  				  				  			
	 Commissions
	  	 	18,104	 	  	 	16,998	 	  	 	1,106	 	  	 	7	 
	 Depreciation and amortization
	  	 	18,410	 	  	 	17,041	 	  	 	1,369	 	  	 	8	 
	 Employee compensation
	  	 	14,662	 	  	 	13,987	 	  	 	675	 	  	 	5	 
	 Professional fees
	  	 	8,054	 	  	 	2,784	 	  	 	5,270	 	  	 	189	 
	 Share-based payments
	  	 	3,200	 	  	 	227	 	  	 	2,973	 	  	 	n.m.	 
	 Other
	  	 	10,761	 	  	 	4,328	 	  	 	6,433	 	  	 	149	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	73,191	 	  	 	55,365	 	  	 	17,826	 	  	 	32	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 For the three months ended December 31, 2020, selling, general and administrative expenses increased by
$17.8 million or 32% as compared to the three months ended December 31, 2019 primarily due to the following: 

Commissions. During the three months ended December 31, 2020, commission expense increased by $1.1 million or 7% as
compared to the three months ended December 31, 2019. The increase was primarily due to an increase in volume subject to commission. 

Depreciation and amortization. Depreciation of property and equipment expenses and amortization of intangible assets for the
three months ended December 31, 2020 increased by $1.4 million or 8% as compared to the three months ended December 31, 2019. The increase was primarily due to a higher amortization of technologies as well as partner and merchant
relationships intangible assets related to the Smart2Pay acquisition. 
 Employee compensation. During the three months ended
December 31, 2020, employee compensation increased by $0.7 million or 5% as compared to the three months ended December 31, 2019. The inclusion of Smart2Pay resulted in an increase in headcount. The employee compensation includes
costs related to the various functions of the Company, including technology, sales and marketing, human resources, and administration. 

Professional fees. For the three months ended December 31, 2020, professional fees increased by $5.3 million as
compared to the three months ended December 31, 2019. The increase was primarily due to the acquisition and other transaction related costs related to the Smart2Pay acquisition in November 2020. 

Share based payments. For the three months ended December 31, 2020, share-based payments increased by $3.0 million as
compared to the three months ended December 31, 2019. This was primarily driven by the accelerated vesting of the Legacy Option Plan stock options and options granted under the Omnibus Incentive Plan as part of the Company’s IPO (refer to
Note 24 of the Consolidated Financial Statements). 
 Other. For the three months ended December 31, 2020, other expenses
increased by $6.4 million compared to the three months ended December 31, 2019 primarily due to an increase in foreign exchange currency losses. 

  
 14 

 Net Finance Costs 
  

																	
	(In thousands of U.S. dollars, except for percentages)	  	Three months ended December 31	 	  	 	 
	  	2020	 	  	2019	 	  	Change	 	  	Change	 
	  	$	 	  	$	 	  	$	 	  	%	 
	 Net finance costs
	  				  				  				  			
	 Finance income
	  				  				  				  			
	 Interest on advances to third parties
	  	 	(1,257	) 	  	 	(1,130	) 	  	 	(127	) 	  	 	11	 
	 Finance costs
	  				  				  				  			
	 Interest on loans and borrowings and unsecured debentures
	  	 	2,091	 	  	 	26,813	 	  	 	(24,722	) 	  	 	(92	) 
	 Change in redemption amount of shares
	  	 	—  	 	  	 	3,616	 	  	 	(3,616	) 	  	 	(100	) 
	 Net (gain) loss on foreign currency exchange
	  	 	(3,751	) 	  	 	(11,743	) 	  	 	7,992	 	  	 	(68	) 
	 Other
	  	 	403	 	  	 	568	 	  	 	(165	) 	  	 	(29	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	(2,514	) 	  	 	18,124	 	  	 	(20,638	) 	  	 	(114	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 During the three months ended December 31, 2020, net finance costs decreased by $20.6 million as
compared to the three months ended December 31, 2019. The decrease was primarily due to the following items: 
 Interest on loans
and borrowings and unsecured debentures. The decrease of $24.7 million was mainly due to a decrease of $17.3 million in interest expense on loans and borrowings and $7.4 million on unsecured debentures. This was due to the
accelerated repayment of the loans and borrowing and unsecured debentures in September 2020 following the IPO. 
 Change in redemption
amount of shares. The decrease of $3.6 million was primarily due to the redemption amount of liability classified Class A common shares in September 2020 following the IPO. 

Net (gain) on foreign currency exchange. Foreign currency exchange gain included in the net finance costs for the three months
ended December 31, 2020 was $3.8 million as compared to a gain of $11.7 million for the three months ended December 31, 2019. This was due to the accelerated repayment of the U.S. denominated debt held in our Canadian subsidiary
in September 2020 following the IPO, which reduces the overall exposure. 
 Income Taxes 

 

																	
	(In thousands of U.S. dollars, except for percentages)	  	Three months ended December 31	 	  	 	 
	  	2020	 	  	2019	 	  	Change	 	  	Change	 
	  	$	 	  	$	 	  	$	 	  	%	 
	 Income tax expense (recovery)
	  	 	(892	) 	  	 	(4,160	) 	  	 	3,268	 	  	 	(79	) 

 Income tax recovery for the three months ended December 31, 2020 was $0.9 million as compared to a
recovery of $4.2 million for the three months ended December 31, 2019. 

  
 15 

 Results of Operations for the Year Ended December 31, 2020 and 2019 

Revenue 
  

																	
	(In thousands of U.S. dollars, except for percentages)	  	Year ended December 31	 	  	 	 
	  	2020	 	  	2019	 	  	Change	 	  	Change	 
	  	$	 	  	$	 	  	$	 	  	%	 
	 Revenue
	  	 	375,046	 	  	 	245,816	 	  	 	129,230	 	  	 	53	 

 For the year ended December 31, 2020, revenue increased by $129.2 million or 53% as compared to the
year ended December 31, 2019. The increase is driven by acquisition growth (SafeCharge acquisition in August 2019 and Smart2Pay in November 2020) as well as organic growth. 

Total volume increased from $24.6 billion in the year ended December 31, 2019 to $43.2 billion in the year ended
December 31, 2020, an increase of $18.6 billion or 76%. 
 Assuming the SafeCharge acquisition and Smart2Pay acquisition had
occurred on January 1, 2019, total volume would have been $44.6 billion in the year ended December 31, 2020, compared to $35.3 billion in the year ended December 31, 2019, an increase of $9.3 billion or 26%. 

Assuming the SafeCharge acquisition and Smart2Pay acquisition had occurred on January 1, 2019, revenue would have been
$406.6 million in the year ended December 31, 2020, compared to $342.0 million in the year ended December 31, 2019, an increase of $64.6 million or 19%. 

Cost of Revenue 
  

																	
	(In thousands of U.S. dollars, except for percentages)	  	Year ended December 31	 	 	 	 
	  	2020	 	 	2019	 	 	Change	 	  	Change	 
	 Cost of revenue
	  	$	69,255	 	 	$	40,758	 	 	$	28,497	 	  	 	70	% 
	 As a percentage of revenue
	  	 	18.5	% 	 	 	16.6	% 	 				  			

 For the year ended December 31, 2020, cost of revenue increased by $28.5 million or 70% as compared
to the year ended December 31, 2019 primarily due to an increase of $30.4 million or 90% in processing costs. 
 The increase in
processing costs is primarily attributable to the inclusion of SafeCharge costs for a complete year in 2020 and the acquisition of Smart2Pay. SafeCharge and Smart2Pay have a higher relative cost of revenue than Nuvei’s operation in the North
American market due to costs associated with its merchant servicing model. As a result, cost of revenue as a percentage of revenue increased from 16.6% for the year ended December 31, 2019 to 18.5% for the year ended December 31, 2020.

  
 16 

 Selling, General and Administrative expenses 

 

																	
	(In thousands of U.S. dollars, except for percentages)	  	Year ended December 31	 	  	 	 
	  	2020	 	  	2019	 	  	Change	 	  	Change	 
	  	$	 	  	$	 	  	$	 	  	%	 
	 Selling , General and Administrative expenses
	  				  				  				  			
	 Commissions
	  	 	67,410	 	  	 	65,490	 	  	 	1,920	 	  	 	3	 
	 Depreciation and amortization
	  	 	69,673	 	  	 	51,125	 	  	 	18,548	 	  	 	36	 
	 Employee compensation
	  	 	57,509	 	  	 	42,367	 	  	 	15,142	 	  	 	36	 
	 Professional Fees
	  	 	15,493	 	  	 	21,127	 	  	 	(5,634	) 	  	 	(27	) 
	 Share-based payments
	  	 	10,407	 	  	 	994	 	  	 	9,413	 	  	 	n.m.	 
	 Other
	  	 	21,198	 	  	 	12,667	 	  	 	8,531	 	  	 	67	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	241,690	 	  	 	193,770	 	  	 	47,920	 	  	 	25	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 For the year ended December 31, 2020, selling, general and administrative expenses increased by
$47.9 million or 25% as compared to the year ended December 31, 2019 primarily due to the following: 
 Commissions.
During the year ended December 31, 2020, commission expenses increased by $1.9 million or 3% due to an increase of volume subject to commissions. 

Depreciation and amortization. Depreciation of property and equipment expenses and amortization of intangible assets for the
year ended December 31, 2020 increased by $18.5 million or 36% as compared to the year ended December 31, 2019. The increase was primarily due to a higher amortization of intangible assets attributable to acquired technologies as well
as partner and merchant relationships resulting from the SafeCharge acquisition, which had only a five-month impact for the period ended December 31, 2019, and the Smart2Pay acquisition, which occurred in November 2020. 

Employee compensation. During the year ended December 31, 2020, employee compensation increased by $15.1 million or
36% as compared to the year ended December 31, 2019. The inclusion of SafeCharge and Smart2Pay resulted in an increase in headcount. The employee compensation includes costs related to the various functions of the Company, including technology,
sales and marketing, human resources and administration. 
 Professional fees. For the year ended December 31, 2020,
professional fees decreased by $5.6 million or 27% as compared to the year ended December 31, 2019. The decrease was primarily due to lower acquisition and other acquisition-related costs as 2019 included such costs related to the
SafeCharge acquisition, a large acquisition resulting in higher fees compared to the Smart2Pay acquisition in November 2020. 

Share-based payments. For the year ended December 31, 2020, share-based payments increased by $9.4 million as compared
to the year ended December 31, 2019. This was primarily driven by the accelerated vesting of the Legacy Option Plan stock options and options granted under the Omnibus Incentive Plan as part of the Company’s IPO (refer to Note 24 of the
Consolidated Financial Statements). 
 Other. For the year ended December 31, 2020, other expenses increased by
$8.5 million or 67% as compared to the year ended December 31, 2019 due to higher information technology expenses and losses on foreign currency exchange. 

  
 17 

 Net Finance Costs 
  

																	
	(In thousands of U.S. dollars, except for percentages)	  	Year ended December 31	 	  	 	 
	  	2020	 	  	2019	 	  	Change	 	  	Change	 
	  	$	 	  	$	 	  	$	 	  	%	 
	 Net finance costs
	  				  				  				  			
	 Finance income
	  				  				  				  			
	 Interest on advances to third parties
	  	 	(5,427	) 	  	 	(5,188	) 	  	 	(239	) 	  	 	5	 
	 Finance costs
	  				  				  				  			
	 Interest on loans and borrowings and unsecured debentures
	  	 	57,527	 	  	 	58,672	 	  	 	(1,145	) 	  	 	(2	) 
	 Change in redemption amount of shares
	  	 	76,438	 	  	 	41,744	 	  	 	34,694	 	  	 	83	 
	 Loss on debt modification or early repayment
	  	 	24,491	 	  	 	4,830	 	  	 	19,661	 	  	 	n.m.	 
	 Net (gain) loss on foreign currency exchange
	  	 	11,020	 	  	 	(15,300	) 	  	 	26,320	 	  	 	(172	) 
	 Other
	  	 	635	 	  	 	694	 	  	 	(59	) 	  	 	(9	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	164,684	 	  	 	85,452	 	  	 	79,232	 	  	 	93	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 During the year ended December 31, 2020, net finance costs increased by $79.2 million as compared to
the year ended December 31, 2019. The increase was primarily due to the following items: 
 Interest on loans and borrowings and
unsecured debentures. A decrease of $1.1 million due to decrease in loans and borrowings following repayment from IPO proceeds. 

Change in redemption amount of shares. The increase of $34.7 million was primarily due to an increase in the redemption
amount of liability classified Class A common shares, which is based on the fair value of the Class A common shares. Following the IPO in September 2020, there are no outstanding Class A common shares. 

Loss on debt modification and early repayment. The increase of $19.7 million was primarily due to the accelerated
amortization of deferred financing fees resulting from the early repayment of the loans and borrowings following the IPO. 
 Net
(gain) loss on foreign currency exchange. Foreign currency exchange loss included in the net finance costs for the year ended December 31, 2020 was $11.0 million as compared to a gain of $15.3 million for the year ended
December 31, 2019. This was due to the strengthening of the Canadian dollar as compared to the U.S. dollar early in 2020 for the U.S. denominated debt held in our Canadian subsidiary, which was partially repaid with the proceeds from the IPO.

 Income Taxes 
  

																	
	(In thousands of U.S. dollars, except for percentages)	  	Year ended December 31	 	  	 	 
	  	2020	 	  	2019	 	  	Change	 	  	Change	 
	  	$	 	  	$	 	  	$	 	  	%	 
	 Income tax expense (recovery)
	  	 	3,087	 	  	 	(4,699	) 	  	 	7,786	 	  	 	(166	) 

 Income tax expense for the year ended December 31, 2020 was $3.1 million as compared to a recovery
of $4.7 million for the year ended December 31, 2019. The current income tax expense was $13.5 million for the year ended December 31, 2020 compared to a current tax expense of $4.8 million for the year ended
December 31, 2019. The deferred income tax recovery was $10.4 million for the year ended December 31, 2020 compared to a deferred income tax recovery of $9.5 million for the year ended December 31, 2019 mainly driven by the
amortization of acquisition- related intangible assets. 

  
 18 

 Selected Annual Information 

 

													
	(In thousands of U.S. dollars)	  	As at and for the year ended December 31,	 
	  	2020	 	  	2019	 	  	2018	 
	  	$	 	  	$	 	  	$	 
	 Revenue
	  	 	375,046	 	  	 	245,816	 	  	 	149,726	 
	 Net loss
	  	 	(103,670	) 	  	 	(69,465	) 	  	 	(30,962	) 
	 Net loss per share attributable to common shareholders of the Company (Basic and diluted)(a)
	  	 	(1.08	) 	  	 	(1.15	) 	  	 	(0.52	) 
	 Total assets
	  	 	2,243,984	 	  	 	1,558,772	 	  	 	577,572	 
	 Total non-current liabilities
	  	 	260,705	 	  	 	849,039	 	  	 	344,477	 

  

	(a)	 The weighted average number of common shares outstanding previous to the IPO has been adjusted to take into
consideration the Reorganization discussed in Note 17 of the Consolidated Financial Statements. 

 Year ended December 31, 2020
compared to Year ended December 31, 2019 
 Revenue 

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations” for a more detailed
discussion of the 2020-2019 year-over-year changes in revenue and net loss. 
 Total Assets 

Total assets increased $685.2 million or 44% from the year ended December 31, 2019 to December 31, 2020. The increase can be
explained primarily by the increase of $242.8 million in segregated funds related to increase in total volume, timing and the inclusion of Smart2Pay, the increase of $201.3 million in goodwill, and $115.9 million in intangible assets
both related to the Smart2Pay acquisition, and the increase of $120.7 million in cash. 
 Segregated funds represent amounts held in
segregated bank accounts, which are held on behalf of merchants where the Company is in the flow of funds in the settlement transaction cycle. A corresponding liability (due to merchants) is recognized for the amounts to be settled to merchants. The
segregated bank accounts are held with the Company’s banks and are segregated from operating funds. Both the segregated funds and the due to merchants are derecognized when the funds are settled to the merchant. 

Total Non-Current liabilities 

Total non-current liabilities decreased by $588.3 million or 69% from the year ended
December 31, 2019 to December 31, 2020. This is primarily due to a decrease of $509.4 million in loans and borrowings, and a decrease of $109.0 million in unsecured convertible debentures. In connection with the IPO, the Company
made an early repayment of the loans and borrowings principal of $615.6 million and debenture principal of $93.4 million. In the three months ended December 31, 2020, the Company added term loans of $110 million to finance the
acquisition of Smart2Pay in November 2020 and Base Commerce in January 2021. 

  
 19 

 Year ended December 31, 2019 compared to Year ended December 31, 2018 

Revenue 
 For the year ended
December 31, 2019, revenue increased by $96.1 million or 64% as compared to the year ended December 31, 2018. The increase was due to the LPP acquisition in January 2019, the SafeCharge acquisition in August 2019 and organic growth.

 Total volume increased from $14.1 billion in the year ended December 31, 2018 to $24.6 billion in the year ended
December 31,2019, an increase of $10.5 billion or 74%. 
 Total Assets 

Total assets increased by $981.2 million from the year ended December 31, 2018 to December 31, 2019. The increase can be
explained by the increase of segregated funds by $200.6 million, intangible assets by $288.8 million and goodwill by $454.9 million resulting from the SafeCharge acquisition in 2019. 

Total Non-Current liabilities 

Total non-current liabilities increased by $504.6 million from the year ended December 31,
2018 to December 31, 2019. This is due to an in increase in loans and borrowings (net of repayment) of $453.4 million, and unsecured convertible debenture of $109.0 million. As part of the SafeCharge acquisition, additional term loan
of $580 million was obtained, and $199 million of unsecured convertible debentures were issued by the Company to certain shareholders. 

  
 20 

 Summary of Quarterly Results and Trend Analysis 

 

																																	
	(In thousands of U.S. dollars except for per share amounts)	  	Three months ended	 
	  	Dec. 31,
2020	 	 	Sept. 30,
2020	 	 	Jun. 30,
2020	 	 	Mar. 31,
2020	 	 	Dec. 31,
2019	 	 	Sept. 30,
2019	 	 	Jun. 30,
2019	 	 	Mar. 31,
2019	 
	  	$	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 	 	$	 
	 Revenue
	  	 	115,881	 	 	 	93,599	 	 	 	82,568	 	 	 	82,998	 	 	 	79,327	 	 	 	70,752	 	 	 	50,453	 	 	 	45,284	 
	 Cost of revenue
	  	 	23,519	 	 	 	17,007	 	 	 	13,561	 	 	 	15,168	 	 	 	13,075	 	 	 	12,173	 	 	 	8,141	 	 	 	7,369	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Gross profit
	  	 	92,362	 	 	 	76,592	 	 	 	69,007	 	 	 	67,830	 	 	 	66,252	 	 	 	58,579	 	 	 	42,312	 	 	 	37,915	 
	 Selling, general and administrative expenses
	  	 	73,191	 	 	 	61,398	 	 	 	53,267	 	 	 	53,834	 	 	 	55,365	 	 	 	62,689	 	 	 	40,975	 	 	 	34,741	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Operating profit (loss)
	  	 	19,171	 	 	 	15,194	 	 	 	15,740	 	 	 	13,996	 	 	 	10,887	 	 	 	(4,110	) 	 	 	1,337	 	 	 	3,174	 
	 Finance income
	  	 	(1,257	) 	 	 	(1,375	) 	 	 	(1,449	) 	 	 	(1,346	) 	 	 	(1,130	) 	 	 	(1,532	) 	 	 	(1,404	) 	 	 	(1,122	) 
	 Finance costs
	  	 	(1,257	) 	 	 	90,933	 	 	 	2,666	 	 	 	77,769	 	 	 	19,254	 	 	 	62,069	 	 	 	4,717	 	 	 	4,600	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net finance costs
	  	 	(2,514	) 	 	 	89,558	 	 	 	1,217	 	 	 	76,423	 	 	 	18,124	 	 	 	60,537	 	 	 	3,313	 	 	 	3,478	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Income (loss) before income tax
	  	 	21,685	 	 	 	(74,364	) 	 	 	14,523	 	 	 	(62,427	) 	 	 	(7,237	) 	 	 	(64,647	) 	 	 	(1,976	) 	 	 	(304	) 
	 Income tax expense (recovery)
	  	 	(892	) 	 	 	3,505	 	 	 	558	 	 	 	(84	) 	 	 	(4,160	) 	 	 	1,049	 	 	 	(575	) 	 	 	(1,013	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net income (loss)
	  	 	22,577	 	 	 	(77,869	) 	 	 	13,965	 	 	 	(62,343	) 	 	 	(3,077	) 	 	 	(65,696	) 	 	 	(1,401	) 	 	 	709	 
	 Net income (loss) per share attributable to common shareholders of the Company(a)
	  				 				 				 				 				 				 				 			
	 Basic
	  	 	0.16	 	 	 	(0.88	) 	 	 	0.16	 	 	 	(0.74	) 	 	 	(0.05	) 	 	 	(1.10	) 	 	 	(0.02	) 	 	 	0.01	 
	 Diluted
	  	 	0.16	 	 	 	(0.88	) 	 	 	0.15	 	 	 	(0.74	) 	 	 	(0.05	) 	 	 	(1.10	) 	 	 	(0.02	) 	 	 	0.01	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted EBITDA
	  	 	51,313	 	 	 	40,991	 	 	 	37,390	 	 	 	33,288	 	 	 	31,942	 	 	 	25,767	 	 	 	15,359	 	 	 	14,131	 
	 Adjusted net income (loss)
	  	 	46,492	 	 	 	16,455	 	 	 	16,259	 	 	 	9,780	 	 	 	5,364	 	 	 	2,192	 	 	 	7,816	 	 	 	6,973	 
	 Adjusted net income per share attributable to common shareholders of the Company(a)
	  				 				 				 				 				 				 				 			
	 Basic
	  	 	0.34	 	 	 	0.18	 	 	 	0.18	 	 	 	0.11	 	 	 	0.06	 	 	 	0.03	 	 	 	0.13	 	 	 	0.11	 
	 Diluted
	  	 	0.33	 	 	 	0.17	 	 	 	0.18	 	 	 	0.11	 	 	 	0.06	 	 	 	0.03	 	 	 	0.12	 	 	 	0.11	 

  

	(a)	 The weighted average number of common shares outstanding previous to the IPO has been adjusted to take into
consideration the Reorganization discussed in Note 17 of the Consolidated Financial Statements. 

 Quarterly Trend Analysis

 The quarterly increase in revenue was due to total volume growth from acquisitions (SafeCharge for the three months ended
September 30, 2019 and Smart2Pay for the three months ended December 31, 2020) and organic growth. 
 The quarterly increase in
cost of revenue is primarily related to processing costs increase following the SafeCharge acquisition in August 2019 and Smart2Pay acquisition in November 2020. Furthermore, both SafeCharge and Smart2Pay have higher cost of revenue than
Nuvei’s North American operations due to costs associated with their merchant servicing models.      

  
 21 

 The quarterly increase in selling, general and administrative expenses is primarily related
to the various acquisitions. Depreciation and amortization increased due to an increase in amortization of intangible assets attributable to the acquisitions of technologies as well as partner and merchant relationships resulting from the SafeCharge
and Smart2Pay acquisitions. Employee benefits increased primarily due to the SafeCharge and Smart2Pay acquisition which resulted in an increase in headcount. Professional fees increased for the three months ended September 30, 2019 and the
three months ended December 31, 2020 due to the costs related to the SafeCharge and Smart2Pay acquisitions, respectively. 
 Share
based payment increased due to the accelerated vesting of the Legacy Option Plan stock options and options granted under the Omnibus Incentive Plan as part of the Company’s IPO. 

Liquidity and Capital Resources 
 Overview

 Our financial condition and liquidity are and will continue to be influenced by a variety of factors, including: 

 

	 	•	 	 Our ability to generate cash flows from our operations; 

 

	 	•	 	 The level of our outstanding indebtedness and the interest we are obligated to pay on this indebtedness; and

  

	 	•	 	 Our capital expenditure requirements. 

The general objectives of our capital management strategy are to ensure sufficient liquidity to pursue our organic growth strategy and
undertake selective acquisitions, while maintaining a strong credit profile and a capital structure that maintains total leverage ratio within the limits set in the credit facilities. 

Our primary source of liquidity is cash from operations and debt and equity financing. Our principal liquidity needs include investment in our
product and technology and selective acquisitions, as well as operations, selling and general and administrative expenses and debt service. 

The Company’s capital is composed of net debt and shareholders’ equity. Net debt consists of interest-bearing debt less cash. The
Company’s use of capital is to finance working capital requirements, capital expenditures and business acquisitions. The Company funds those requirements out if its internally generated cash flows and funds drawn from its long-term credit
facilities. 
 The primary measure used by the Company to monitor its financial leverage is its total leverage ratio, defined as the ratio
of consolidated net debt outstanding to consolidated Adjusted EBITDA, calculated in accordance with the terms of the agreement. Under its first lien credit facilities, the Company must maintain a total leverage ratio of less than or equal to 8.00 :
1.00. As at December 31, 2020, the Company was in compliance with this requirement. 
 In addition to the cash balances, at
December 31, 2020 the Company has a $100.0 million revolving credit facility available to be drawn to meet ongoing working capital requirements. As at December 31, 2020 the Company had letters of credit facilities issued totaling
$30.1 million which represent usage on the revolving credit facility 
 On December 7, 2020, Nuvei filed a short form base shelf
prospectus with the securities regulatory authorities in each of the provinces and territories of Canada. The base shelf prospectus will allow Nuvei and certain of its security holders to qualify the distribution by way of prospectus in Canada of up
to US $850.0 million of subordinate voting shares, preferred shares, debt securities, warrants, subscription receipts, units, or any combination thereof, during the 25-month period that the base shelf
prospectus is effective. 
 We believe that our available cash, cash flows generated from operations, loans and borrowings available to us
will be sufficient to meet our projected operating and capital expenditure requirements for at least the next 12 months. 

  
 22 

 Cash Flows 
  

																	
	 	  	Year ended December 31	 	  	 	 
	(In thousands of U.S. dollars, except for percentages)	  	2020	 	  	2019	 	  	Change	 	  	Change	 
	 	  	$	 	  	$	 	  	$	 	  	%	 
	 Cash flow from (used in):
	  				  				  				  			
	 Operating Activities
	  	 	93,259	 	  	 	22,705	 	  	 	70,554	 	  	 	n.m.	 
	 Investing Activities
	  	 	(58,617	) 	  	 	(775,389	) 	  	 	716,772	 	  	 	(92	) 
	 Financing Activities
	  	 	84,195	 	  	 	806,617	 	  	 	(722,422	) 	  	 	(90	) 
	 Effect of foreign currency exchange on cash
	  	 	1,813	 	  	 	69	 	  	 	1,744	 	  	 	n.m.	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Net increase in cash
	  	 	120,650	 	  	 	54,002	 	  	 	66,648	 	  	 	123	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Cash—end of period
	  	 	180,722	 	  	 	60,072	 	  	 	120,650	 	  	 	201	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Cash Flows From Operating Activities 

For the year ended December 31, 2020, $93.3 million of cash flow was generated from operating activities compared to
$22.7 million for the year ended December 31, 2019. The increase was due to the total volume growth driven primarily by organic growth, the SafeCharge acquisition in August 2019 and the Smart2Pay acquisition in November 2020. Net income
adjusted for non-cash items was $147.1 million for the year ended December 31,2020 compared to $65.9 million for the year ended December 31, 2019, an increase of $81.2 million. The
interest and income taxes paid totalled $58.0 million for 2020 compared to $45.8 million for 2019, an increase of $12.2 million. 
 Cash
Flows From (Used in) Investing Activities 
 For the year ended December 31, 2020, $58.6 million of cash flow was used in
investing activities. This resulted primarily from a business acquisition of $67.5 million (net of cash acquired) as well as new intangible assets of $14.4 million and property and equipment of $3.4 million. This was partially offset
by proceeds from the sale of a subsidiary (net of cash acquired) of $19.0 million, and cash from advances to third party of $9.4 million. 

For the year ended December 31, 2019, $775.4 million of cash was used in investing activities. This resulted primarily from business
acquisitions (net of cash acquired) of $780.2 million, primarily related to the SafeCharge acquisition. 
 Cash Flows From (Used in) Financing
Activities 
 For the year ended December 31, 2020, $84.2 million of cash flow was generated from financing activities. This
resulted primarily from the issuance of share capital from the IPO of $715.5 million and additional loan and borrowings of $110.0 million, which was offset by the repayment of loans and borrowings of $642.8 million and the repayment
of unsecured debentures of $93.4 million. 
 For the year ended December 31, 2019, $806.6 million of cash was generated from
financing activities. This resulted primarily from the net proceeds of loans and borrowings of $472.0 million, the net issuance of unsecured debenture and preferred shares of $177.4 million, the issuance of share capital of
$187.3 million, offset by the payment of transaction costs related to loans and borrowings of $28.8 million. The cash flow generated from financing activities was used primarily for the SafeCharge acquisition, as noted above. 

  
 23 

 Contractual Obligations 

We have contractual obligations with a variety of expiration dates. The table below outlines our contractual obligations, including estimated
interest payments, at December 31, 2020: 
  

																	
	(In thousands of U.S. dollars)	  	Contractual cash flows	 
	  	Carrying
amount	 	  	Total	 	  	Less than
1 year	 	  	1 to 5
years	 
	 	  	$	 	  	$	 	  	$	 	  	$	 
	 Trade and other payables
	  	 	58,709	 	  	 	58,709	 	  	 	58,709	 	  	 	—  	 
	 Due to merchants
	  	 	443,394	 	  	 	443,394	 	  	 	443,394	 	  	 	—  	 
	 Credit facilities
	  	 	206,481	 	  	 	260,552	 	  	 	10,069	 	  	 	250,483	 
	 Lease liabilities
	  	 	8,772	 	  	 	8,772	 	  	 	2,384	 	  	 	6,388	 
	 Other liabilities
	  	 	8,791	 	  	 	8,791	 	  	 	7,132	 	  	 	1,659	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	726,147	 	  	 	780,218	 	  	 	521,688	 	  	 	258,530	 
	 Segregated funds
	  	 	(443,394	) 	  	 	(443,394	) 	  	 	(443,394	) 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	282,753	 	  	 	336,824	 	  	 	78,294	 	  	 	258,530	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Off-Balance Sheet Arrangements 

We have no off-balance sheet arrangements, other than the letter of credit facilities issued totaling
$30.1 million, which represents usage on the revolving credit facility. 
 We may, from time to time, be contingently liable with
respect to litigation and claims that arise in the normal course of operations. 
 Related Party Transactions 

We have no related party transactions, other than those noted in the Consolidated Financial Statements, which are reproduced as follows. 

Transactions with Key Management Personnel 
  

																	
	(In thousands of U.S. dollars)	  	Three months ended December 31	 	  	Year ended December 31	 
	  	2020	 	  	2019	 	  	2020	 	  	2019	 
	  	$	 	  	$	 	  	$	 	  	$	 
	 Salaries and short-term employee compensation
	  	 	1,534	 	  	 	1,588	 	  	 	4,369	 	  	 	3,764	 
	 Share based payments
	  	 	449	 	  	 	150	 	  	 	5,955	 	  	 	620	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	1,983	 	  	 	1,738	 	  	 	10,324	 	  	 	4,384	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  
 24 

 Other Related Party Transactions 

 

																	
	(In thousands of U.S. dollars)	  	Three months ended December 31	 	  	Year ended December 31	 
	  	2020	 	  	2019	 	  	2020	 	  	2019	 
	  	$	 	  	$	 	  	$	 	  	$	 
	 Expense—Travel(a)
	  	 	489	 	  	 	855	 	  	 	1,907	 	  	 	964	 
	 Unsecured convertible debentures due to
shareholders(b)
	  	 	—  	 	  	 	8,630	 	  	 	15,503	 	  	 	12,520	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	489	 	  	 	9,485	 	  	 	17,410	 	  	 	13,484	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	(a)	 In the normal course of operations, the Company receives services from a company owned by a shareholder of the
Company. The services received consist of travel services. 

	(b)	 In August 2019, unsecured convertible debentures were issued by the Company to shareholders. As part of the IPO
in September 2020, an amount of $30.2 million in principal amount and accrued interest on the unsecured convertible debentures was converted into Class A common shares of the Company, and the remaining balance was repaid with the cash
proceeds of the IPO. 

 Unsecured convertible debentures due to shareholders 

The IPO proceeds were used to repay in full the principal amount, outstanding original issue discount and accrued interest, on the unsecured
convertible debenture due to shareholders in the amount of $93.4 million. As part of the IPO, $30.2 million in principal amount and accrued interest on the unsecured convertible debentures was converted into Class A common shares of
the Company. 
 Financial Instruments and Other Instruments 

In the ordinary course of its business activities, the Company is exposed to various market risks that are beyond its control, including
fluctuations in foreign exchange rates and interest rates, and that may have an adverse effect on the value of its financial assets and liabilities, future cash flows and profit. Its policy with respect to these market risks is to assess the
potential of experiencing losses and the consolidated impact thereof, and to mitigate these market risks as is deemed appropriate. (Also refer to the “Risks Relating to Our Business and Industry” section.) 

Credit and Concentration Risk 

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. Credit risk arises principally from the Company’s cash, trade and other receivables, advances to third parties, segregated funds and processor deposits. The carrying amounts of these financial assets represent the maximum credit
exposure. 
 Cash and processor deposits 

The credit risk associated with cash, segregated funds and processor deposits is limited because they are maintained only with highly rated
large financial institutions. 
 Trade and other receivables 

The Company provides credit to its customers in the normal course of business. The Company evaluates the creditworthiness of the corresponding
counterparties at least at the end of each reporting period and on a specific circumstance basis. The Company’s extension of credit to customers involves considerable judgment and is based on an evaluation of each customer’s financial
condition and payment history. The Company has established various internal controls designed to mitigate credit risk, including credit limits and payment terms that are reviewed and 

  
 25 

 
approved by the Company. Any impaired trade receivables are mostly due from customers that are experiencing financial difficulties. 

There is a concentration of credit risk as of December 31, 2020, with respect to the Company’s receivables from its main processors,
which represented approximately 39% (December 31, 2019– 59%) of trade and other receivables. 
 Advances to third parties 

The credit risk associated with the advances to third parties is limited because the advances are repaid by financial institutions when the
Company becomes entitled to payment under the agreements. 
 Foreign Currency Risk 

The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates and the degrees of volatility of those rates.
Foreign currency risk is limited to the portion of the Company’s business transactions denominated in currencies other than the U.S. dollar. Fluctuations related to foreign exchange rates could cause unforeseen fluctuations in the
Company’s operating results. 
 Approximately 46% of the Company’s revenues and approximately 30% of its expenses are in
currencies other than the U.S. dollar. The Company does not enter into arrangements to hedge its foreign currency risk. 
 The following
table provides an indication of the Company’s significant foreign exchange currency exposures as stated in U.S. dollars as at December 31, 2020: 
  

																					
	(In thousands of U.S. dollars)	  	2020	 
	  	CAD	 	 	EUR	 	 	GBP	 	 	Other	 	 	Total	 
	  	$	 	 	$	 	 	$	 	 	$	 	 	$	 
	 Cash
	  	 	128	 	 	 	19,031	 	 	 	8,569	 	 	 	13,385	 	 	 	41,113	 
	 Trade and other receivables
	  	 	7,645	 	 	 	5,317	 	 	 	1,222	 	 	 	3,509	 	 	 	17,693	 
	 Trade and other payables
	  	 	(16,374	) 	 	 	(17,530	) 	 	 	(1,170	) 	 	 	(13,989	) 	 	 	(49,063	) 
	 Lease liabilities
	  	 	—  	 	 	 	(79	) 	 	 	(108	) 	 	 	(3,516	) 	 	 	(3,703	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net financial position exposure
	  	 	(8,601	) 	 	 	6,739	 	 	 	8,513	 	 	 	(611	) 	 	 	6,040	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 A 10% strengthening of the above foreign currencies dollar against the US dollar would have
affected the measurement of financial instruments denominated in these currencies and affected equity and net loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant
and ignores any impact of forecast sales and purchases. A 10% weakening of the foreign currencies against the U.S. dollar would have an equal but opposite effect. 
  

																					
	(In thousands of U.S. dollars)	  	2020	 
	  	CAD	 	 	EUR	 	  	GBP	 	  	Other	 	 	Total	 
	  	$	 	 	$	 	  	$	 	  	$	 	 	$	 
	 Impact on equity and net loss
	  	 	(860	) 	 	 	674	 	  	 	851	 	  	 	(61	) 	 	 	604	 

  
 26 

 Interest rate risk 

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
rates. Refer to Note 20 of the Consolidated Financial Statements for the Company’s exposure to interest rate risk as at December 31, 2020 and 2019. 

The Company does not account for any fixed interest-rate financial assets or financial liabilities at FVTPL. 

All loans and borrowings bear interest at floating rates, and the Company is therefore exposed to the cash flow risk resulting from interest
rate fluctuations. 
 Based on December 31, 2020 outstanding loans and borrowings at floating rates, an immediate and sustained
increase (decrease) in interest rates of 100 basis points over a twelve month period would have resulted in a decrease (increase) of $2,1 million in profit or loss (2019 – $7,4 million). This analysis assumes that all other variables, in
particular foreign currency exchange rates, remain constant. 
 Fair value risk 

Certain of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes using the following methods. 

In establishing fair value, the Company uses a fair value hierarchy based on levels as defined below: 

 

	 	•	 	 Level 1: defined as observable inputs such as quoted prices in active markets. 

 

	 	•	 	 Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly
observable. 

  

	 	•	 	 Level 3: defined as inputs that are based on little or no observable market data, therefore requiring
entities to develop their own assumptions. 

 The Company has determined that the carrying amounts of its current
financial assets and financial liabilities approximate their fair value given their short-term nature. 
 The fair value of the variable
interest rate non-current liabilities approximates the carrying amount as the liabilities bear interest at a rate that varies according to the market rate. 

The fair value of fixed interest rate non-current unsecured convertible debentures due to shareholders
approximate their carrying amounts at the reporting dates. 
 Refer to Note 21 of the Consolidated Financial Statements for additional
information. 
 Critical Accounting Policies and Estimates 

The preparation of the Consolidated Financial Statements in conformity with IFRS requires management to make estimates, judgments and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates, judgments and assumptions are reviewed on an ongoing
basis and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized prospectively.

  
 27 

 Critical judgments made in applying accounting policies that have the most significant
effects on the amounts recognized in the Consolidated Financial Statements include the following:
 Revenue Recognition. The
identification of revenue-generating contracts with customers, the identification of performance obligations, the determination of the transaction price and allocations between identified performance obligations, the use of appropriate revenue
recognition method for each performance obligation and the measure of progress for performance obligations satisfied over time are the main aspects of the revenue recognition process, all of which require the exercise of judgment and use of
assumptions. In addition, the Company has applied judgment in assessing the principal versus agent considerations for its transaction and processing services.

Determining the fair value of identifiable intangible assets following a business combination. The Company uses valuation
techniques to determine the fair value of identifiable intangible assets acquired in a business combination, which are generally based on a forecast of total expected future net discounted cash flows. These valuations are linked closely to the
assumptions made by management regarding the future performance of the related assets and the discount rate applied as it would be assumed by a market participant.

Recoverable Amount of Goodwill. For the years ended December 31, 2020 and 2019, the Company performed its annual
impairment tests of goodwill. For the purposes of impairment testing, goodwill has been allocated to the Company’s cash-generating units (CGUs), which represent the lowest level within the Company at which goodwill is monitored for internal
management purposes (Refer to Note 8 of the Consolidated Financial Statements). The recoverable amount of the CGUs was based on fair value less costs of disposal, estimated using a market approach. The Company concluded that the recoverable amount
of the CGUs subject to the annual test was greater than their carrying amount. As such, no impairment charge was recorded during 2020 and 2019. The Company determined the recoverable amounts of the CGUs based on the fair value less costs
of disposal method. The fair values were based on a multiple applied to forecasted adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the next year, which takes into account financial forecasts approved by
senior management. The key assumptions for the fair value less costs of disposals method include estimated sales volumes, input costs, and selling, general and administrative expenses in determining future forecasted adjusted EBITDA, as
well as the multiple applied to forecasted adjusted EBITDA. The adjusted EBITDA multiple was obtained by using market data for comparable companies. The values assigned to the key assumptions represent management’s assessment of
future trends and have been based on historical data from external and internal sources. No reasonably possible change in the key assumptions used in determining the recoverable amount would result in any impairment of goodwill.

Provisions for Losses on Merchant Accounts. Disputes between a cardholder and a merchant arise periodically, primarily as a
result of customer dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction amount is refunded to the customer by the card issuing financial
institution, but the financial institution is refunded by the Company. The Company then charges back to the merchant the amount refunded to the financial institution. As such, the Company is exposed to credit risk in relation to the merchant since
the Company assumes the repayment to the merchant’s customer for the full amount of the transaction even if the merchant has insufficient funds to reimburse the Company. A provision for losses on merchant accounts is maintained to absorb
chargebacks for merchant transactions that have been previously processed and on which revenues have been recorded. The provision for losses on merchant accounts specifically comprises identifiable provisions for merchant transactions for which
losses can be estimated. Management evaluates the risk for such transactions and estimates the loss for disputed transactions based primarily on historical experience and other relevant factors. Management analyzes the adequacy of its provision for
losses on merchant accounts in each reporting period.
 Recoverable amount of tax balances for recognition of tax assets.
Deferred income tax assets reflect management’s estimate of operations of future fiscal years, timing of reversal of temporary differences and tax rates on the date of reversals, which may well change depending on governments’ fiscal
policies. Management must also assess whether it is more likely than not that deferred income tax assets will be realized and determine whether a valuation allowance is required on all or a portion of deferred income tax assets. Refer to Note 18 of
the Consolidated Financial Statements for details. 

  
 28 

 Fair Value of Share-based Payment Transactions. The Company recognized
compensation expense as a result of the options from the Legacy Option Plan becoming vested and the clawback provision being voided. Fair value was estimated using the Black-Scholes option pricing model (refer to Note 24 of the Consolidated
Financial Statements for assumptions). The risk-free interest rate is based on the yield of a zero coupon U.S. government security with a maturity equal to the expected life of the option from the date of the grant. The assumption of
expected volatility is based on the average historical volatility of comparable companies for the period immediately preceding the option grant. The Company does not anticipate paying any cash dividends in the foreseeable future and, therefore, uses
an expected dividend yield of zero in the option-pricing model. 
 Recently Issued Accounting Standards Not Yet Adopted 

A number of amendments to existing standards issued by the IASB are mandatory but not yet effective for the year ended December 31,
2020. The Company is still assessing the impact of these amendments, if any, on the Consolidated Financial Statements. 

Amendments to references to conceptual frameworks of IFRS Standards 

This amendment replaces references to the 2010 Conceptual Framework for Financial Reporting with references to the 2018 Conceptual
Framework for Financial Reporting in order to determine what constitutes an asset or liability in a business combination, add a new exception for certain liabilities and contingent liabilities to refer to IAS 37 or IFRIC 21 rather than to the 2018
Conceptual Framework, and clarify that an acquirer should not recognize contingent assets at the acquisition date. The amendments are effective for business combinations occurring in reporting periods starting on or after January 1,
2022. Earlier application is permitted.
 Amendments to liability classification 

On January 23, 2020, the IASB issued amendments to IAS 1, Presentation of Financial Statements (the amendments), to clarify the requirements for
classifying liabilities as current or non-current. More specifically: 
  

	 	•	 	 The amendments specify that the conditions which exist at the end of the reporting period are those which will be
used to determine if a right to defer settlement of a liability exists; 

  

	 	•	 	 Management expectations about events after the statement of financial position date, for example on whether a
covenant will be breached, or whether early settlement will take place, are not relevant; and 

  

	 	•	 	 The amendments clarify the situations that are considered settlement of a liability. 

The amendments are applicable to annual periods beginning on or after January 1, 2023. 

Outstanding Share Data 
 The outstanding shares of the
Company were as follows as at February 28, 2021: 
  

									
	 	  	Quantity	 	  	Carrying Amount
$	 
	 Subordinated voting shares
	  	 	45,924,637	 	  	 	1,139,723	 
	 Multiple voting shares
	  	 	92,247,808	 	  	 	486,062	 
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	138,172,445	 	  	 	1,625,785	 
		  	  
	  
	 	  	  
	  
	 

  
 29 

 Risks Relating to Our Business and Industry

The ongoing COVID-19 pandemic, including the resulting global economic uncertainty and measures taken in response
to the pandemic, could materially impact our business and future results of operations and financial condition.
 The COVID-19 pandemic has disrupted the economy and put unprecedented strains on governments, health care systems, businesses and individuals around the world. The impact and duration of the COVID-19 pandemic are difficult to assess or predict. It is even more difficult to predict the impact on the global economic market, which will depend upon the actions taken by governments, businesses and other
enterprises in response to the pandemic. The pandemic has already caused, and is likely to result in further, significant disruption of global financial markets and economic uncertainty. SMBs who rely on their physical storefronts in particular have
been significantly impacted. The pandemic has resulted in authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place or total lock-down orders, and business limitations
and shutdowns. Such measures have significantly contributed to rising unemployment and negatively impacted consumer and business spending. The extent to which COVID-19 impacts the Company’s financial
results will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions taken by
governments to curtail or treat its impact, including shelter in place directives, business limitations and shutdowns, travel bans and restrictions, loan payment deferrals (whether government-mandated or voluntary), moratoriums on debt collection
activities and other actions, which, if imposed or extended, may impact the economies in which the Company now, or may in the future, operate. Adverse market conditions resulting from the spread of COVID-19
could materially adversely affect our business and the value of our Subordinate Voting Shares.
 Our merchants, particularly in industries
most impacted by the COVID-19 pandemic, including the retail, restaurant, hotel, hospitality, consumer discretionary and travel industries and companies whose customers operate in impacted industries, may
reduce or delay their technology-driven transformation initiatives, which could materially and adversely impact our business. Further, as a result of the COVID-19 pandemic, we have experienced, and may
continue to experience, slowed growth or decline in new demand for our products and services and lower demand from our existing merchants for expansion within our products and services, as well as existing and potential merchants reducing or
delaying purchasing decisions. We have experienced, and may continue to experience, an increase in prospective merchants seeking lower prices or other more favorable contract terms and current merchants attempting to obtain concessions on the terms
of existing contracts, including requests for early termination or waiver or delay of payment obligations, all of which has adversely affected and could materially adversely impact our business, results of operations and overall financial condition
in future periods. Further, we may face increased competition due to changes to our competitors’ products or services, including modifications to their terms, conditions and pricing that could materially adversely impact our business, results
of operations and overall financial condition in future periods.
 The COVID-19 pandemic could cause
our third-party service providers such as data center hosting facilities and cloud computing platform providers, which are critical to our infrastructure, to shut down their business, experience security incidents that impact our business, delay or
disrupt performance or delivery of services or experience interference with the supply chain of hardware required by their systems and services, any of which could materially adversely affect our business. Further, the
COVID-19 pandemic has resulted in our employees and those of many of our customers working from home and conducting work via the Internet, and if the network and infrastructure of Internet providers becomes
overburdened by increased usage or is otherwise unreliable or unavailable, our employees’ and our customers’ employees’ access to the Internet to conduct business could be negatively impacted. Limitations on access or disruptions to
services or goods provided by or to some of our suppliers upon which our platform and business operations relies could interrupt our ability to provide our platform, decrease the productivity of our workforce and significantly harm our business
operations, financial condition and results of operations. In addition, our technology platforms and the other systems or networks used in our business may experience an increase in attempted cyber-attacks, targeted intrusion, ransomware and
phishing campaigns seeking to take advantage of shifts to employees working remotely using their household or personal Internet networks as a result of the COVID-19 pandemic. The success of any of these
unauthorized attempts could substantially impact our technology platforms, the proprietary and other confidential data contained therein or otherwise stored or processed in our operations, and ultimately our business. Any actual or perceived
security incident also may cause us to incur increased expenses to improve our security controls and to remediate security vulnerabilities.

  
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 The spread of COVID-19 has caused us to modify our
business practices to help minimize the risk of the virus to our employees, our partners, our merchants and their customers, and the communities in which we participate, which could negatively impact our business. In response to the COVID-19 pandemic, we have enabled our employees to work remotely, implemented travel restrictions for all non-essential business and shifted company events to virtual-only
experiences, and we may deem it advisable to similarly alter, postpone or cancel additional events in the future. There is no certainty that the measures we have taken will be sufficient to mitigate the risks posed by the virus. If the COVID-19 pandemic worsens, especially in regions where we have offices, our business activities originating from affected areas could be adversely affected. Disruptive activities could include additional business
closures in impacted areas, further restrictions on our employees’ and service providers’ ability to travel, impacts to productivity if our employees or their family members experience health issues and potential delays in hiring and
onboarding of new employees. We may take further actions that alter our business operations as may be required by local, provincial, state or federal authorities or that we determine are in the best interests of our employees. Such measures could
negatively affect our sales and marketing efforts, sales cycles, employee productivity or customer retention, any of which could harm our financial condition and business operations. Changes in internal controls due to remote work arrangements may
result in control deficiencies and impact our financial reporting systems, which may also be material.
 Additionally, diversion of
management focus to address the impacts of the COVID-19 pandemic could potentially disrupt our operating plans. The extent and continued impact of the COVID-19 pandemic
on our business will depend on certain developments, including: the duration and spread of the outbreak; government responses to the pandemic; delays in vaccine rollout; the effectiveness of vaccines against the virus and its mutations; the impact
on our customers and our sales cycles; the impact on customer, industry or employee events; and the effect on our partners, merchants and their customers, third-party service providers, customers and supply chains, all of which are uncertain and
cannot be predicted. If we or our customers experience prolonged shutdowns or other business disruptions in the future, our ability to conduct our business in the manner and within planned timelines could be materially adversely impacted. 

The Company submitted an application to the Government of Canada for the Canadian Emergency Wage Subsidy (“CEWS”) for which it was
eligible due to the COVID-19 pandemic for the periods of April 12 to May 9, 2020, May 10 to June 6, 2020. CEWS of $1.0 million has been recorded principally as a reduction of employee
costs in the Consolidated Financial Statements and notes for the year ended December 31, 2020.
 To the extent that the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risks Relating to Our Business and Industry”
section.
 If we cannot keep pace with rapid developments and change in our industry and continue to acquire new merchants and partners rapidly, the
use of our services could decline, reducing our revenue.
 The electronic payments market in which we compete is subject to rapid and
significant changes. This market is characterized by rapid technological change, new product and service introductions, evolving industry standards, changing client needs, consolidation and the entrance of
non-traditional competitors. In order to remain competitive and continue to acquire new merchants and partners rapidly, we are continually involved in a number of projects to develop new services and improve
our existing services. These projects may not be successful and carry some risks, such as cost overruns, delays in delivery, performance problems and lack of client adoption, and may cause us to become subject to additional regulation. Moreover, the
merchant base that we target is varied and non-geographically bound or restricted by scale, making it more challenging to predict demand for our offerings. Any inability to develop or delay in the delivery of
new services or the failure to differentiate our services or to accurately predict and address market demand could render our services less desirable, or even obsolete, to our clients. Furthermore, in recent years, the market for APMs has grown
significantly, and technology has become particularly important for payment processers looking to maintain a competitive edge in the industry. Many of the projects that we have spent time and resources on relate to APMs. Even though the market
for APMs is growing, it may not continue to develop rapidly enough for us to recover the costs we have incurred in developing new services targeted at this market. In addition, many current or prospective customers may find competing services more
attractive if we do not keep pace with market innovation or changes in response to COVID-19, and many may choose to switch to competing services even if we do our best to innovate and provide superior
services.

  
 31 

 We rely in part, and may in the future rely in part, on third parties, including some of our
competitors and potential competitors, for the development of, and access to, new technologies. If we are unable to maintain these relationships, we may lose access to new technologies or may not have the speed-to-market necessary to successfully launch new offerings.
 Our future success will depend on
our ability to adapt to technological changes and evolving industry standards. We cannot predict the effects of technological changes on our business. If we are unable to adapt to technological changes or evolving industry standards on a timely and
cost-effective basis by introducing new services and improving existing services, our business, financial condition and results of operations could be materially adversely affected.

Substantial and increasingly intense competition, both within our industry and from other payments methods, may harm our business.

The market for payment processing services is highly competitive. Other providers of payment processing services have established a sizable
market share in the merchant acquiring sector. Our growth will depend on a combination of the continued growth of electronic payments and our ability to increase our market share.

Our competitors include traditional merchant acquirers such as financial institutions, affiliates of financial institutions and
well-established payment processors and payment technology providers. In particular, we compete with these vendors to develop and offer innovative non-conventional payment services at competitive prices,
including in-app services, eCommerce and mobile commerce services, digital banking, ERP, digital wallet account and prepaid card offerings. In certain of the countries in which we operate, primarily the United
States and Canada, we do not have direct relationships with the payment networks, but rely on an acquiring bank. As some of our competitors are directly affiliated with financial institutions, those competitors may not incur the same sponsorship
costs that we incur for registration with the payment networks in these countries. Furthermore, in the countries where we rely on an acquiring bank to access the payment networks, our ability to control our costs is limited, because we do not have a
direct relationship with those payment networks.
 Many of our competitors, in particular those affiliated with large financial
institutions, also have substantially greater financial, technological, operational and marketing resources than we have. Accordingly, these competitors may be able to offer their products and services at more competitive prices. As a result, we may
need to reduce our fees or otherwise modify the terms of use of our products and services in order to retain existing clients and attract new ones. If we are required to materially reduce our fees in order to remain competitive, we will need to
aggressively control our costs in order to maintain our profit margins, and our revenue may be adversely affected. Our risk management team monitors our client relationships and we have at times terminated, and may continue to terminate, client
relationships that may no longer be profitable to us due to such pricing pressure. Moreover, our competitors may have the ability to devote significantly more financial and operational resources than we can to the development of new products,
services or new technologies or to acquire other companies or technology so that they can provide improved operating functionality and features to their existing service offerings. If successful, their efforts in this regard could render our
products or services less desirable to clients, resulting in the loss of existing clients, an inability to obtain new clients or a reduction in the fees we could generate from our offerings. Any of the foregoing could have a material adverse effect
on our business, financial condition and results of operations.
 We derive a significant portion of our revenue from payments services. Our efforts
to expand our product portfolio and market reach may not succeed and may reduce our revenue growth.
 We derive the majority of our
revenue from transaction fees we collect in connection with payments services, primarily core credit card processing. While we intend to continue to broaden the scope of products and services we offer, such as through expanded alternative payment
solutions and continuing support for mobile wallets, and to penetrate additional high-growth verticals, primarily eCommerce channels by expanding our direct and indirect sales channels, we may not be successful in deriving the revenue from these
efforts that we expect. Failure to broaden the scope of products and services that are attractive to our clients or penetrate additional verticals may inhibit the growth of repeat business and harm our business, as well as increase the vulnerability
of our core payments business to competitors offering a broader suite of products and services. Furthermore, we may have limited or no experience with new offerings and these offerings may present new and difficult technology, regulatory,
operational and other challenges. If we experience service disruptions, failures or other issues with any such new offerings, our business may be materially and adversely affected. Our newer activities may not recoup our investments

  
 32 

 
in a timely manner or at all. If any of this were to occur, it could damage our reputation, limit our growth and materially and adversely affect our business, financial condition and results of
operations.
 We may face challenges in expanding into new geographic regions outside of the European Union, the United States, the U.K. and Canada
and continuing our growth within these markets.
 The substantial majority of our revenues in 2020 were generated in Europe, the
United States, the U.K. and Canada. We plan to expand in geographic regions outside Europe, the United States, the U.K. and Canada, and we will face challenges associated with entering and expanding in markets in which we have limited or no
experience and in which we may not be well-known. Offering our products and services in new geographic regions requires substantial expenditures and takes considerable time, and we may not recover our investments in new markets in a timely manner or
at all. For example, we may be unable to attract a sufficient number of merchants and partners, fail to anticipate competitive conditions or fail to adapt and tailor our products and services to different markets.

The development of our products and services globally exposes us to risks relating to staffing and managing cross-border operations, increased
costs and difficulty protecting intellectual property and sensitive data, tariffs and other trade barriers, differing and potentially adverse tax consequences, increased and conflicting regulatory compliance requirements, lack of acceptance of our
products and services, challenges caused by distance, language, and cultural differences, exchange rate risk and exposure to political instability. Accordingly, our efforts to develop and expand the geographic footprint of our operations may not be
successful, which could limit our ability to grow our business.
 Our growth depends on our ability to retain existing clients, increase sales to
existing clients and attract new clients.
 Our future growth and profitability depend upon our ability to retain existing clients,
increase sales to existing clients and attract new clients in the face of intense competition in the electronic payments industry. While we generally have longstanding relationships with our clients, whether they are merchants or partners, their
contracts can typically be terminated upon reasonable notice. As a result, they typically have no obligation to continue to use our products and services. Our clients’ payment processing activity with us may decrease for a variety of reasons,
including client satisfaction with our products and services, the effectiveness of our support services, our pricing and terms, the pricing, terms and quality of competing products or services, the effects of global economic conditions or reductions
in the spending levels of our clients’ customers. We may also experience client attrition as a result of business closures or account closures that we initiate due to heightened risks relating to contract breaches by merchants or a reduction in
same-store sales or regulatory risks. We cannot predict the level of attrition in the future and higher than expected attrition could lead to a decrease in transaction volumes processed and a decline in revenue. In addition, the growth of our
business depends in part on existing clients expanding their use of our products and services. If we are unable to encourage clients to broaden their use of our services, our growth may slow or stop. Any of the foregoing could have a material
adverse effect on our business, financial condition and results of operations.
 Furthermore, it is difficult to attract new clients because
of potential complications associated with switching payment processing vendors, such as early termination fees, software integration costs and other transition costs, business disruption and loss of accustomed functionality. For potential clients,
switching from one vendor of core processing or related software and services (or from an internally developed system) to a new vendor is a significant undertaking, and as a result, potential clients may resist changing vendors. We seek to overcome
these factors by making investments to enhance the functionality of our software and differentiate our services. However, there can be no assurance that our efforts will be successful, and this resistance may adversely affect our growth.

If we fail to manage our growth effectively, our business could be harmed.

In order to manage our growth effectively, we must continue to strengthen our existing infrastructure, develop and improve our processes and
internal controls, create and improve our reporting systems, and timely address issues as they arise. As we continue to strengthen our existing infrastructure and systems, we will also be required to hire additional personnel. These efforts may
require substantial financial expenditures, commitments of resources, developments of our processes, and other investments and innovations. Furthermore, we encourage employees to quickly develop and launch new features for our

  
 33 

 
products and services. As we grow, we may not be able to execute as quickly as smaller, more efficient organizations. In addition, as we grow, we may not be able to maintain our entrepreneurial
company culture, which fosters innovation and talent. If we do not successfully manage our growth, our business may be adversely affected.
 Our
revenue growth rate is likely to slow as our business matures.
 We have experienced periods of high revenue growth since we were
founded in 2003, but we do not expect to be able to maintain the same rate of revenue growth as our business matures. Moreover, we have experienced revenue growth due to acquisitions. To the extent we do not continue to grow our business organically
or through acquisitions, our future revenue growth may not be consistent with historic trends. We have encountered, and expect to continue to encounter, risks and difficulties frequently experienced by growing companies, including challenges in
financial forecasting accuracy, determining appropriate investments and developing new products and features, among others. Any evaluation of our business and prospects should take into account the risks and uncertainties inherent in investing in
growing companies.
 Historically our business has generated net losses and we may continue to generate net losses as we continue to make significant
investments in our business.
 Since our founding in 2003, we have made significant investments in the growth of our business. As a
result of these investments, we have historically generated net losses. We intend to continue to make investments in our business, including with respect to our employee base, sales, distribution and marketing; development of new products, services
and features; expansion of office space and other infrastructure; and development of international operations and general administration, including legal, finance and other compliance expenses related to being a public company. If we are unable to
generate adequate revenue growth and manage our expenses, our results of operations and operating metrics may fluctuate and we expect to continue to incur net losses, which could cause the market price of our Subordinate Voting Shares to decline. We
cannot assure you that our increased investment in the business will result in corresponding revenue growth.
 Our indebtedness could adversely affect
our business, financial condition and results of operations.
 As of December 31, 2020, we had $206.5 million of
outstanding indebtedness pursuant to our credit facilities. Our credit facilities contain covenants and events of default that may limit our financial flexibility and ability to undertake certain types of transactions. For instance, we are subject
to negative covenants that restrict some of our activities, including restrictions on: incurring additional debt; creating liens; paying dividends or making other distributions; entering into certain types of agreements; making certain investments;
consolidating, merging or transferring assets, or making other fundamental changes; entering into transactions with affiliates; entering into sale and lease-back transactions; and maintaining certain leverage ratios. Our current level of debt as
well as the restrictions our existing debt places on us could have significant consequences on our future operations, including:
  

	 	•	 	 making it more difficult for us to meet our payment and other obligations under our existing and future
debt;

  

	 	•	 	 resulting in an event of default if we fail to comply with the financial and other restrictive covenants
contained in our credit facilities, which event of default could result in all of the debt outstanding under our credit facilities becoming immediately due and payable;

 

	 	•	 	 reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other
general corporate purposes and limiting our ability to obtain additional financing for these purposes;

  

	 	•	 	 limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our
business, the industry in which we operate and the general economy; and

  

	 	•	 	 placing us at a competitive disadvantage compared to our competitors that have less debt or are less
leveraged.  

 Any of the above-listed factors could have an adverse effect on our business, financial
condition and results of operations and our ability to meet our payment obligations under our existing and future debt. In addition, certain loans that we take out under our credit facilities are subject to variable interest rates and we had
$206.5 million of outstanding indebtedness 

  
 34 

 
subject to variable interest rates as of December 31, 2020. As a result, any increase in interest rates may also materially adversely affect our liquidity, financial condition and results of
operations.
 Our ability to meet our payment and other obligations under our existing and future debt instruments depends on our ability to
generate significant cash flow in the future. This, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control. We cannot assure you that our
business will generate cash flow from operations, or that future borrowings will be available to us under our existing or any future credit facilities or otherwise, in an amount sufficient to enable us to meet our payment obligations under our
credit facilities and to fund other liquidity needs. If we are not able to generate sufficient cash flow to service our debt obligations, we may need to refinance or restructure our debt, sell assets, reduce or delay capital investments, or seek to
raise additional capital, which may have an adverse impact on our business, financial condition and results of operations.
 Any future acquisitions,
partnerships or joint ventures that we make or enter into could disrupt our business and harm our financial condition.

Acquisitions, partnerships and joint ventures are an integral part of our growth strategy, and in recent years, we have consummated a number of
acquisitions in addition to the SafeCharge acquisition and the Smart2Pay acquisition. We evaluate, and expect in the future to evaluate, potential strategic acquisitions of, and partnerships or joint ventures with, businesses providing services or
technologies that are complementary to our existing services and technologies. However, we may not be successful in identifying acquisition, partnership and joint venture targets or we may use estimates and judgments to evaluate the operations and
future revenue of a target that turn out to be inaccurate. In addition, we may not be able to successfully finance or integrate a particular business, service or technology that we acquire or with which we form a partnership or joint venture, and we
may not achieve the anticipated benefits of such project or we may lose merchants as a result. Furthermore, the integration of any acquisition, partnership or joint venture may divert management’s time and resources from our existing business
and disrupt our operations. Certain acquisitions, partnerships and joint ventures we have and may in the future make may prevent us from competing for certain clients or in certain lines of business and may lead to a loss of clients to the extent we
acquire businesses with non-competes or exclusivity provisions in their agreements with clients. Certain acquisitions may also enmesh us in outstanding or unforeseen legal, regulatory, contractual, employee or
other issues. As a result of any of the foregoing, we may spend time and money on projects that do not increase our revenue or profitability. Moreover, our competitors may be willing or able to pay more than us for acquisitions, which may cause us
to lose certain acquisitions that we would otherwise desire to complete. Even if we successfully compete for a certain acquisition, partnership or joint venture, we may finance the project with cash on hand, equity or debt, or a combination thereof,
which could decrease our cash reserves, dilute our shareholders, including you, or significantly increase our level of indebtedness or place other restrictions on our operations. We cannot ensure that any acquisition, partnership or joint venture we
make will not have a material adverse effect on our business, financial condition and results of operations.
 A significant number of our merchants
are SMBs, which can be more difficult and costly to retain than larger enterprises and may increase the impact of economic fluctuations on us.

SMBs comprise a significant percentage of our number of merchants. To continue to grow our revenue, we must add merchants, sell additional
services to existing merchants and encourage existing merchants to continue doing business with us. However, retaining SMBs can be more difficult than retaining large enterprise merchants as SMB merchants:

 

	 	•	 	 often have higher rates of business failure and more limited resources;

 

	 	•	 	 are typically less sophisticated in their ability to make technology-related decisions based on factors other
than price;

  

	 	•	 	 may have decisions related to the choice of payment processor dictated by their affiliated parent entity;
and

  

	 	•	 	 are more able to change their payment processors than larger enterprise merchants dependent on our
services.  

 SMBs are typically more susceptible to the adverse effects of economic fluctuations. If we do
not continue to diversify our merchant base and adverse changes in the economic environment or business failures of our SMB merchants increase, we 

  
 35 

 
may need to attract and retain new merchants at an accelerated rate or decrease our expenses to reduce negative impacts on our business, financial condition and results of operations.

SMBs have been disproportionately affected by the COVID-19 pandemic and the related measures taken by
governments and private industry to protect the public health such as stay-at-home orders. Many SMBs are experiencing reduced sales and are processing fewer payments
with us, which has had a negative impact on our results of operations. If they cease to operate, they will stop using our products and services altogether. SMBs frequently have limited budgets and limited access to capital, and they may choose to
allocate their spending to items other than our financial or marketing services, especially in times of economic uncertainty or in recessions. In addition, if more of our merchants cease to operate, this may have an adverse impact not only on the
growth of our payments services but also on our transaction and advance loss rates, and the success of our other services. For example, if merchants processing payments with us receive chargebacks after they cease to operate, we may incur additional
losses.
 We have a certain degree of concentration of customers and customer sectors.

Some of our largest merchants provide significant contributions to our revenue. Large merchants typically have arrangements with multiple
payment service providers, primarily in order to mitigate against risks such as downtime, delayed response time or default by a payment service provider, and as a result can readily shift their business from us to other providers. For the twelve
month period ended December 31, 2020, our top 10 merchants represented approximately 15% of our gross profit, with our largest merchant representing approximately 2% of our gross profit.

In addition, the mix of customer sectors that we service has an impact on our revenue. For example, a portion of our revenue is derived from
the online retail sector, in which chargeback ratios tend to be higher than physical retail. The online retail sector is also particularly subject to discretionary spending by customers, which increases our exposure from fluctuations in economic
conditions. This concentration, particularly if it were to increase, could have a material adverse effect on our business financial condition and results of operations. A substantial portion of our revenue is also derived from the gaming and sports
betting and the foreign exchange trading sectors, each of which is highly regulated. Gaming and sports betting in particular are subject to intense public scrutiny regarding the societal effects of such activities, with changing public attitudes
potentially decreasing transaction volumes. Regulatory changes that cause a decrease in regulated gaming and sports betting or foreign exchange trading overall could harm the business of our merchants, decrease their transaction volumes and lead to
a decline in our revenue. In addition, in response to public pressure about the effects of regulated gaming and sports betting or otherwise, the payment networks may change the terms of use of their networks by regulated gaming and sports betting
companies, which could reduce their use of formal payment channels. Moreover, we depend on our acquiring banks in certain jurisdictions to process transactions for these clients. If any of our acquiring banks refuse to process these transactions, we
may have difficulty finding other acquiring banks to process these transactions. Any of the foregoing could reduce the volume of payments that we process for our regulated gaming and sports betting and foreign exchange trading merchants and the
revenue we earn from it, and could also harm our reputation and brand.
 If we lose a major merchant, experience a material change in the
mix of customer sectors that we service or otherwise experience a decline in the use of our products in one of the key sectors that we service, we could also experience a material loss of revenue, which could have a material adverse effect on our
business, financial condition and results of operations.
 If we fail to comply with the applicable requirements of Visa, Mastercard or any other
payment networks, those payment networks could seek to fine us, suspend us or terminate our registrations.
 We rely on payment
networks to process our transactions, and a significant source of our revenue comes from processing transactions through Visa, Mastercard, American Express, UnionPay, Discover and other payment networks. The payment networks routinely update and
modify their requirements. Changes in their requirements may impact our ongoing cost of doing business and we may not, in every circumstance, be able to pass through such costs to our clients or associated participants. Furthermore, if we or our
merchants do not comply with the payment networks’ requirements (e.g., their rules, bylaws and charter documentation), the payment networks could seek to fine us, suspend us or terminate our registrations that allow us to process transactions
on their networks. In the ordinary course of our business, we receive on occasion notices of non-compliance and fines, which typically relate to transactional or messaging requisites, as well as excessive
chargebacks by 

  
 36 

 
a merchant or data security failures on the part of a merchant. If we are unable to recover amounts relating to fines from, or pass through costs to, our merchants, partners or other associated
participants, we would experience a financial loss. The termination of our registration due to failure to comply with the applicable requirements of Visa, Mastercard, American Express, UnionPay, Discover or other payment networks, or any changes in
the payment network rules that would impair our registration, could require us to stop providing payment services through Visa, Mastercard, American Express, UnionPay, Discover or other payment networks, which could have a material adverse effect on
our business, financial condition and results of operations.
 Moreover, as payment networks become more dependent on proprietary
technology, modify their technological approach or operating practices and seek to provide value added services to issuers and merchants, there is heightened risk that rules and standards may be governed by their own self-interest, or the
self-interest of third parties with influence over them, which could materially impact our business, financial condition and results of operations.

We may incur losses when our merchants refuse to or cannot reimburse chargebacks resolved in favor of their customers or if they are not in compliance
with the rules and regulations of the payment networks.
 We are currently, and will continue to be, exposed to risks associated with
chargebacks in connection with payment card fraud or relating to the goods or services provided by our merchants. In the event that a billing dispute between a cardholder and a merchant is not resolved in favor of the merchant, including in
situations in which the merchant is engaged in fraud, the transaction is typically “charged back” to the merchant and the purchase price is credited or otherwise refunded to the cardholder. If we are unable to collect chargebacks from the
merchant’s account, or if the merchant refuses or is unable to reimburse us for a chargeback due to closure, bankruptcy or other reasons, we may bear the loss for the amounts paid to the cardholder. Our financial results would be adversely
affected to the extent these merchants do not fully reimburse us for the related chargebacks. We do not typically collect and maintain reserves from our merchants to cover these potential losses, and to the extent we do maintain such reserves, they
may not be adequate to cover our actual losses. Historically, chargebacks have occurred more frequently in online transactions than in in-person transactions. Moreover, chargebacks typically increase during
economic downturns due to merchants becoming insolvent and bankrupt and therefore unable to fulfill their commitments for goods or services. Consequently, in certain industries, chargebacks have risen, and may continue to rise, as a result of the
economic downturn caused by the current COVID-19 pandemic. If we are unable to maintain our losses from chargebacks at acceptable levels, the payment card networks could fine us, increase our transaction-based
fees, or terminate our ability to process payment cards. Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

We have bank accounts with banks in multiple territories and rely on our banking partners to maintain those accounts.

We have bank accounts with banks in multiple territories in the
day-to-day operations of our core businesses and are reliant upon our banking partners that provide those accounts. The loss of any key banking relationships, whether
through the failure of our banking partners or their terminating our partnership based on our own conduct or other circumstances, could have a material impact on our financial condition and results of operations. In addition, a banking partner could
default on its obligations to us, thereby exposing us to credit risk. We may have to repay certain costs, such as transaction fees or breakage costs, if we terminate these arrangements. Any of the foregoing could have a material adverse effect on
our business, financial condition or results of operations.
 The United Kingdom’s departure from the European Union could adversely affect our
ability to execute on our expansion plans.
 The U.K. has one of the largest economies in Europe, and the United States and other
European countries are substantial trading partners of the U.K. On January 31, 2020, the U.K. separated from the E.U. (“Brexit”). Brexit has introduced, and may continue to introduce, significant uncertainties and instability in the
financial markets. At present the political and economic long-term consequences of Brexit are uncertain, including whether Brexit will have an overall negative impact on the U.K. or the broader global economy or the value of the British pound. On
December 24, 2020, the U.K. and E.U. entered into the E.U.-U.K. Trade and Cooperation Agreement. The agreement was provisionally applicable beginning January 1, 2021 and sets new rules and
arrangements between the U.K. and E.U. in areas such as the trade of goods and services, intellectual 

  
 37 

 
property, transportation. As a result of the agreement, the U.K. will no longer be considered a member of the E.U. Single Market and Customs Union and will exit all E.U. policies and trade
agreements. Although the agreement has mitigated a portion of the risk that arose due to the U.K.’s withdrawal from the E.U., the overall impact caused on the Company’s operations is still being evaluated, including in the volatility of
the British pound. We have significant operations in the U.K. and the E.U. Such a withdrawal from the E.U. is unprecedented, and it is unclear how the U.K.’s access to the European single market for goods, capital, services and labor within the
European Union and the wider commercial, legal and regulatory environment, will impact our U.K. operations. We may also face new regulatory costs and challenges as a result of Brexit that could have an adverse effect on our operations and
development programs, consumer and investor confidence and the level of consumer discretionary purchases, thereby impacting the use of our payments services by merchants. There may continue to be economic uncertainty surrounding the consequences of
Brexit, which could negatively impact our financial condition, results of operations and cash flows. Brexit could have significant implications for our business and could lead to economic and legal uncertainty, including significant volatility in
global stock markets and currency exchange rates, and increasingly divergent laws, regulations, and licensing requirements for the Company. Any of these effects of Brexit, among others, could adversely affect our operations and financial
results.
 A decline in the use of electronic payment methods could have a materially adverse effect on our business, financial condition and results
of operations.
 A significant portion of our revenue is generated by payments with credit, debit and prepaid cards. We believe
future growth in the use of credit, debit and prepaid cards and other electronic payments, including APMs, will be driven by the cost, ease-of-use and quality of
services offered to consumers. If consumers reduce or discontinue their use of credit, debit or prepaid cards or other electronic payment methods as a payment mechanism for their transactions, it could have a material adverse effect on our business,
financial condition and results of operations. Moreover, if there is an adverse development in the payments industry, such as new legislation or regulation that makes it more difficult or onerous for our clients to do business or utilize such
payment mechanisms, or renders our services less desirable or even obsolete to our clients, our business, financial condition and results of operations may be adversely affected.

Our results of operations may be adversely affected by changes in foreign currency exchange rates.

Our financial results are reported in U.S. dollars and a substantial portion of our sales and operating costs are transacted in other
currencies, primarily Euros, Sterling, Bulgarian lev, Israeli shekels and Canadian dollars. We have not historically entered into arrangements to hedge foreign currency risk. In situations where we are not hedged, either through hedging arrangements
or through a natural hedging resulting from an offset in such currencies, our results of operations will be affected by movements in these currencies against the U.S. dollar. Significant fluctuations in relative currency values against the U.S.
dollar could thus have a significant impact on our results of operations.
 A deterioration in the quality of the products and services we offer,
including support services, could adversely impact our ability to attract and retain merchants and partners.
 Our clients expect a
consistent level of quality in the provision of our products and services. The support services that we provide are also a key element of the value proposition to our clients. The products and services we deliver are designed to process complex
transactions and provide reports and other information concerning those transactions, all at high volumes and processing speeds. If the reliability, functionality or speed of our products and services is compromised or the quality of those products
or services is otherwise degraded, or if we fail to continue to provide a high level of support and quickly detect and remediate any performance issues, we could experience significant processing or reporting errors. This in turn, could lead us to
lose existing clients and find it harder to attract new merchants and partners. In addition, if we are unable to scale our support functions to address the growth of our merchant and partner network, the quality of our support may decrease, which
could adversely affect our ability to attract and retain merchants and partners.

  
 38 

 If we lose key personnel, our business, financial condition and results of operations may be adversely
affected.
 The success of our business strategy is dependent upon the ability and experience of a number of key personnel who have
substantial experience with our operations, the rapidly changing payment processing industry and the markets in which we offer our services. Many of our key personnel have worked for us for a significant amount of time or were recruited by us
specifically due to their industry experience. In particular, we are highly dependent on the contributions of our founder and Chief Executive Officer, Philip Fayer, as well as other members of our management team. The loss of the services of one or
a combination of our senior executives and key managers, including our Chief Executive Officer, could have a material adverse effect on our business, financial condition and results of operations.

Our business functions at the intersection of rapidly changing technological, social, economic and regulatory developments that require a
wide-ranging set of expertise and intellectual capital. In order for us to successfully compete and grow, we must attract, recruit, develop and retain the necessary personnel who can provide the needed expertise across the entire spectrum of our
intellectual capital needs. The market for qualified personnel is competitive, and we may not succeed in recruiting and retaining additional personnel or we may fail to effectively replace departing personnel with qualified or effective successors.
Failure to retain or attract key personnel could have a material adverse effect on our business, financial condition and results of operations. Our effort to retain and develop personnel may also result in significant additional expenses, which
could adversely affect our profitability.
 Our balance sheet includes significant amounts of intangible assets and goodwill. The impairment of a
significant portion of these assets would negatively affect our business, financial condition and results of operations.
 As of
December 31, 2020, our balance sheet included intangible assets that amounted to $524.2 million and goodwill that amounted to $969.8 million. These assets consisted primarily of identified intangible assets associated with merchant
and partner relationships, technologies and goodwill associated with recent acquisitions. We also expect to engage in additional acquisitions, which may result in our recognition of additional intangible assets and goodwill. Under current accounting
standards, we are required to amortize certain intangible assets over the useful life of the asset, while certain other intangible assets are not amortized. On at least an annual basis, we assess whether there have been impairments in the carrying
value of certain intangible assets. If the carrying value of the asset is determined to be impaired, then it is written down to fair value by a charge to earnings. An impairment of a significant portion of intangible assets and/or goodwill could
have a material adverse effect on our business, financial condition and results of operations.
 If we cannot pass increases in fees from payment
networks, including assessment, interchange, transaction and other fees, along to our merchants, our operating margins will decline.

We rely on issuing and acquiring banks and payment networks to process our transactions, and we pay assessment, interchange and/or other fees
set by the payment networks for transactions we process. From time to time, the issuing and acquiring banks or payment networks may increase the assessment, interchange, transaction and other fees that they charge payment processors. Under certain
of our existing contracts with merchants, we are generally permitted to pass these fee increases along to our merchants through corresponding increases in our processing fees. If we are unable to pass through these and other fees in the future due
to contractual or regulatory restrictions, competitive pressures or other considerations, it could have a material adverse effect on our business, financial condition and results of operations.

We are subject to economic and political risk, the business cycles and credit risk of our clients and volatility in the overall level of consumer,
business and government spending.
 The electronic payments industry depends heavily on the overall level of consumer, business and
government spending. This spending depends on worldwide economic and geopolitical conditions. Key international economies have experienced cyclical downturns from time to time in which economic activity was impacted by falling supply or demand for a
variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies, pandemics such as COVID-19 and
overall economic uncertainty. We are exposed to general economic conditions that affect consumer confidence, consumer spending, consumer discretionary income or changes 

  
 39 

 
in consumer purchasing habits. The current deterioration in general economic conditions, including the rise in unemployment rates and any increases in interest rates, particularly in Europe, the
United States, the U.K. and Canada, may adversely affect our financial performance by reducing consumer confidence and, as a result, the number or average purchase amount of transactions made using electronic payments. If our merchants make fewer
sales of their products and services using electronic payments or people spend less money per transaction, we will have fewer transactions to process and lower overall volume, resulting in lower revenue.

In addition, a recessionary economic environment could affect our merchants through a higher rate of bankruptcy filings, in particular for our
SMB clients, which could result in higher merchant attrition and decrease our revenue. As of December 31, 2020, we recorded an allowance for receivables of $0.6 million relating to estimated losses on doubtful accounts. Any of the
foregoing risks would negatively impact our business, financial condition and results of operations.
 The uncertainty caused by the COVID-19 outbreak continues with the duration and severity of the pandemic and the overall impact on supply and consumer demand still unknown. Even after the COVID-19 pandemic
has subsided, we may experience material and adverse impacts to our business as a result of the virus’s global economic impact. There are no comparable recent events that provide guidance as to the effect the
COVID-19 pandemic may have, and we are unable to forecast the full impact on our business; however, this represents a known area of uncertainty and the impacts from the
COVID-19 pandemic and the related economic disruption will have a material and adverse impact on our business, results of operations, financial condition and cash flows.

We rely on third-party partners such as independent sales organizations (“ISOs”) and value added resellers (“VARs”) to market and
sell some of our products and services.
 We rely on indirect sales channels consisting of third-party partners such as ISOs and VARs
to market and sell our products and services to merchants, in particular SMBs. We do not fully control the activities of our partners with respect to the marketing and sale of our products and services, and they may make decisions that may be
contrary to our interests, including decisions to compete against us or to favor products and services of our existing or future competitors. Therefore, their reputation and performance, their ability and willingness to market and sell our products
and services and their ability to expand their business and their sales channels will have a direct and material impact on our future growth and profitability. The loss of a number of our partners or a substantial decrease in the volume of business
generated by a major partner or a group of partners could have a material adverse effect on our business, financial condition and results of operations.

Misappropriation of end-user transaction funds by our employees may harm our business and create legal
exposure.
 We receive end-user transaction funds from acquiring banks, payment networks and
APMs for many of our clients, depending on the jurisdiction in which they are located. A substantial portion of these funds is held on behalf of merchants in dedicated merchant client bank accounts with banks. The nature of this arrangement entails
a possibility that third party funds could be misappropriated by our employees in breach of our internal policies, which may create negative publicity, harm our relationship with merchants and result in a violation of applicable laws, any of which
could have a material adverse effect on our business, financial condition and results of operations.
 Fraud by merchants, their customers or others
could have a material adverse effect on our business, financial condition and results of operations.
 We offer our products and
services to a large number of clients, and we are responsible for vetting and monitoring these clients and determining whether the transactions we process for them are lawful and legitimate. If our products and services are used to process
illegitimate transactions, and we settle those funds to merchants and are unable to recover them, we may suffer losses and incur liability. Examples of merchant fraud include when a merchant or other party knowingly uses a stolen or counterfeit
credit, debit or prepaid card, card number or other credentials to record a false sales transaction, processes an invalid card or intentionally fails to deliver the merchandise or services sold in an otherwise valid transaction. Moreover, criminals
are using increasingly sophisticated methods to engage in illegal activities such as counterfeiting and fraud. Identity thieves and those committing fraud using stolen or fabricated credit card or bank account numbers or other deceptive or

  
 40 

 
malicious practices, may steal significant amounts of money from our merchants, which may negatively impact their businesses, including forcing them to close. This in turn could lead to a
decrease in our transaction volumes and have an adverse effect on our business. The highly automated nature of, and liquidity offered by, our payments services make us a target for illegal or improper uses, including fraudulent or illegal sales of
goods or services, money laundering and terrorist financing. We expect incidents of fraud or other illegitimate transactions to increase in the future. In configuring our payments services, we face an inherent
trade-off between security and client convenience. Failure to effectively manage risk and prevent fraud could increase our chargeback liability or expose us to governmental or regulatory sanctions or other
liabilities. Moreover, if we are unable to maintain our losses from fraud at permissible levels, the payment networks could fine us, increase our transaction fees or terminate our ability to process payment cards. Increase in chargebacks or other
liabilities as a result of any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

Our insurance policies may not be sufficient to cover all claims.

Our insurance policies, including policies for data security, privacy liability and cyber-attacks, may not adequately cover all risks to which
we are exposed and may not be adequate for all liabilities actually incurred or indemnification claims against us. A significant claim not covered by our insurance, in full or in part, may result in significant expenditures by us. Moreover, we may
not be able to maintain insurance policies in the future at reasonable costs, on acceptable terms or at all, which may adversely affect our business and the trading price of our Subordinate Voting Shares. The successful assertion of one or more
large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance
requirements, could adversely affect our business, financial condition and results of operations.
 Our risk management policies and procedures may
not be fully effective in mitigating our risk exposure in all market environments or against all types of risks, which could expose us to losses and liability and otherwise harm our business.

We operate in a rapidly changing industry and we have experienced significant change in recent years, including in connection with certain
acquisitions. Accordingly, our risk management policies and procedures may not be fully effective at identifying, monitoring and managing our risks. Some of our risk evaluation methods depend upon information provided by third parties regarding
markets, clients or other matters that are otherwise inaccessible to us. In some cases, however, that information may not be accurate, complete or up-to-date. Our risk
management policies, procedures, techniques and processes may not be effective at identifying all of the risks to which we are exposed or enabling us to mitigate the risks we have identified. In addition, when we introduce new services, focus on new
business types or begin to operate in markets in which we have a limited history of fraud loss, we may be less able to forecast and reserve accurately for new risks. If our risk management policies and processes are ineffective, we may suffer large
financial losses, we may be subject to civil and criminal liability and our business, financial condition and results of operations may be materially and adversely affected.

Our services must integrate and interoperate with a variety of operating systems, software, hardware, web browsers and networks.

We are dependent on the ability of our products and services to integrate with a variety of operating systems, software, hardware, networks and
web browsers that we do not control. Any changes in these systems or networks that degrade the functionality of our products and services, impose additional costs or requirements on us or give preferential treatment to competitive services could
materially and adversely affect usage of our products and services. In the event that it is difficult for our merchants to access and use our products and services, our business may be materially and adversely affected. We also rely on bank
platforms and others, including issuing and acquiring banks, to process our transactions. If there are any issues with, or service interruptions in, these bank platforms, users may be unable to complete their transactions, which would seriously harm
our business, financial condition and results of operations.
 In addition, our solutions, including hardware and software, interoperate
with mobile networks offered by telecom operators and mobile devices developed by third parties. Changes in these networks or in the design of these mobile devices may limit the interoperability of our solutions with such networks and devices and
require modifications to our solutions. If we are unable to ensure that our hardware and software continue to interoperate effectively with such networks and devices, or if doing so is costly, our business, financial condition and results of
operations may be materially and adversely affected.

  
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 The costs and effects of pending and future litigation, investigations or similar matters, or adverse
facts and developments related thereto, could materially affect our business, financial position and results of operations.
 We are,
and may be in the future, party to legal, arbitration and administrative investigations, inspections and proceedings arising in the ordinary course of our business or from extraordinary corporate, tax or regulatory events that involve us or our
associated participants, particularly with respect to civil, tax and labor claims.
 Our indemnities and insurance may not cover all claims
that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Furthermore, there is no guarantee that we will be successful in defending ourselves in pending or future
litigation or similar matters under various laws. Should the ultimate judgments or settlements in any pending or future litigation or investigation significantly exceed our indemnity rights, they could have a material adverse effect on our business,
financial condition and results of operations and the price of our Subordinate Voting Shares. Further, even if we adequately address issues raised by an inspection conducted by an agency or successfully defend our case in an administrative
proceeding or court action, we may have to set aside significant financial and management resources to respond and settle issues raised by such proceedings, which could adversely affect our business.

We may be subject to claims that we have wrongfully hired an employee from a competitor, or that our employees, consultants or independent contractors
have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

Many of our employees, consultants and advisors, or individuals that may in the future serve as our employees, consultants and advisors, are
currently or were previously employed at companies that are our competitors or are potential competitors. We may be subject to claims that we, our employees, consultants or independent contractors or advisors have, inadvertently or otherwise, used
or disclosed confidential or proprietary information, trade secrets or know-how of these third parties. Litigation may be necessary to defend against these claims. Even if we are successful in defending
against these claims, litigation could result in substantial cost and be a distraction to our management and employees. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property
rights or personnel. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.
 We
may not be able to secure financing on favorable terms, or at all, to meet our future capital needs.
 We have funded our operations
since inception primarily through equity financings, bank credit facilities and financing arrangements, including our credit facilities. We do not know if our operations will continue to generate sufficient cash to fund our operations going forward.
In the future, we may require additional capital to respond to business opportunities, refinancing needs, acquisitions or unforeseen circumstances and we may not be able to secure additional debt or equity financing or refinancing on favorable
terms, in a timely manner, or at all. Our ability to secure any additional debt financing may also be subject to restrictions contained in our existing or future indebtedness, including our credit facilities; which contain customary limitations on
the incurrence of certain indebtedness and liens. Any debt financing obtained by us in the future could also include restrictive covenants relating to our capital-raising activities or other financial and operational matters, which may make it more
difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue
to grow or support our business and to respond to business challenges could be significantly limited. We are aware that the impacts of the COVID-19 outbreak have led to reduced availability and attractiveness
of external funding sources, and we expect that until financial market conditions stabilize, accessing financing could be challenging or at elevated costs. We intend to continue focusing on our long-term business initiatives and believe that our
available funds are sufficient to meet our liquidity needs for the foreseeable future. We are carefully monitoring and managing our cash position in light of ongoing conditions and levels of operations. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”. 

  
 42 

 Our operating results are subject to seasonal fluctuations, which could result in variations in our
quarterly results.
 We have experienced in the past, and expect to continue to experience, seasonal fluctuations in our revenue as a
result of consumer spending patterns. Historically, we have marketed our products and services primarily to SMBs, many of which host seasonal retail events. As a result, our revenue have historically been strongest during the last quarter of the
year as a result of higher sales by our merchants during the holiday season. Any negative economic conditions that occur during these months could have a disproportionate effect on our results of operations for the entire fiscal year. As a result of
quarterly fluctuations caused by these and other factors, comparisons of our operating results across different fiscal quarters may not be accurate indicators of our future performance.

We are subject to the risks associated with less than full control rights of some of our subsidiaries and investments.

We own less than 100% of the equity interests or assets of certain of our subsidiaries, namely LoanPaymentPro, LLC and SafeCharge Payments
Mexico S.A. de C.V. and do not hold a controlling interest in Yello Company Limited (Guernsey). As a result, we do not receive the full amount of any profit or cash flow from these non-wholly owned entities
and those who hold a controlling interest may be able to take actions that bind us. We may be adversely affected by this lack of full control and we cannot provide assurance that management of our subsidiaries or other entities will possess the
skills, qualifications or abilities necessary to profitably operate such businesses.
 Changes in accounting standards or inaccurate estimates or
assumptions in the application of accounting policies could adversely affect our financial condition and results of operations.
 Our
accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Future changes in accounting standards, pronouncements or interpretations could require us to change our policies and
procedures. The materiality of such changes is difficult to predict, and such changes could materially impact how we record and report our financial condition and results of operations.

Additionally, our assumptions, estimates and judgments related to complex accounting matters could significantly affect our financial results.
IFRS and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, including, but not limited to, revenue recognition, impairment of long-lived assets,
leases and related economic transactions, intangibles, self-insurance, income taxes, property and equipment, litigation and equity-based compensation are highly complex and involve many subjective assumptions, estimates and judgments by us. Changes
in these rules or their interpretation or changes in underlying assumptions, estimates or judgments by us (i) could require us to make changes to our accounting systems to implement these changes that could increase our operating costs and
(ii) could significantly change our reported or expected financial performance.
 An occurrence of a natural disaster, widespread health
epidemic, pandemic or other outbreaks could have a material adverse effect on our business, financial condition and results of operations.

Our business could be materially and adversely affected by natural disasters, such as fires or floods, the outbreak of a widespread health
epidemic, pandemic, such as COVID-19, or other events, such as wars, acts of terrorism, power shortages or communication interruptions. In addition to previously identified risks associated with the current COVID-19 pandemic, the occurrence of a disaster or similar event could materially disrupt our business and operations. These events could also cause us to close our operating facilities temporarily, which would
severely disrupt our operations and have a material adverse effect on our business, financial condition and results of operations. In addition, our net sales could be materially reduced to the extent that a natural disaster, health epidemic, such as
COVID-19, or other major event harms the economies of the countries in which we operate. Our operations could also be severely disrupted if our merchants, partners and other third-party providers or other
participants were affected by natural disasters, health epidemics, such as COVID-19, or other major events.

  
 43 

 Our holding company structure makes us dependent on the operations of our subsidiaries.

We are a corporation under the CBCA. Our material assets are our direct and indirect equity interests in our subsidiaries, including our
international subsidiaries. We are, therefore, dependent upon payments, dividends and distributions from our subsidiaries for funds to pay our holding company’s operating and other expenses and to pay future cash dividends or distributions, if
any, to holders of our Subordinate Voting Shares, and we may have tax costs in connection with any dividend or distribution.
 Risks Relating to
Intellectual Property and Technology
 Accidental or unauthorized access to or disclosure, loss, destruction or modification of data, through
cybersecurity breaches, computer viruses or otherwise, human error, natural or man-made disasters, or disruption of our services could expose us to liability, protracted and costly litigation and damage to our
reputation.
 In connection with the various services we provide to our merchants, we collect, store, process and transmit the
personal data of our merchants and, in some cases through providing services to our merchants, their customers as well as other end users of payment services (e.g., payers, receivers, cardholders and those who may hold funds and balance in
merchants’ accounts), including but not limited to names, addresses, identification numbers, credit or debit card numbers and expiration dates and/or bank account numbers.

Cybersecurity incidents are increasing in frequency and evolving in nature and include, but are not limited to, installation of malicious
software, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks, employee theft or misuse, unauthorized access to data and other electronic security breaches. Threats may derive from human error,
fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Concerns about security increase when we transmit information (including personal data). Electronic transmissions can be subject to
attack, interception, loss or corruption. In addition, computer viruses and malware can be distributed and spread rapidly over the Internet and could infiltrate our systems or those of our merchants, distribution partners, payment networks and other
associated participants. Infiltration of our systems or those of our associated participants has in the past led to, and could in the future lead to, disruptions in systems, accidental or unauthorized access to or disclosure, loss, destruction,
disablement or encryption of, use or misuse of or modification of confidential or otherwise protected information (including personal data) and the corruption of data.

An increasing number of organizations, including large enterprises merchants and businesses, other large technology companies, financial
institutions and government institutions, have disclosed breaches of their information technology systems, some of which have involved sophisticated and highly targeted attacks, including on portions of their websites or infrastructure. Given the
unpredictability of the timing, nature and scope of information technology disruptions, there can be no assurance that any security procedures and controls that we or our associated participants have implemented will be sufficient to prevent
security incidents from occurring. Furthermore, because there are many different security breach techniques and such techniques continue to evolve and are generally not detected until after an incident has occurred, we may be unable to anticipate
attempted security breaches or other security incidents, react in a timely manner, determine the nature or scope of an incident, or implement adequate preventive measures.

As a defense, in connection with our IT security program, we maintain a disaster recovery plan and have implemented controls over unauthorized
access, including remediation strategies and controls to prevent future attacks. Our Chief Technology Security Officer and Chief Information Security Officer, with the oversight of management, oversee and implement our cybersecurity risk mitigation
strategy. Our defensive measures, however, have not in the past prevented and may not prevent future access or protect us against use of sensitive data or against other cybersecurity related incidents. Furthermore, we cannot be certain that these
measures will be successful and will be sufficient to counter all current and emerging technology threats that are designed to breach our systems. While we maintain insurance coverage that may cover certain aspects of cyber risks and incidents, our
insurance coverage may be insufficient to cover all losses resulting from a cybersecurity incident.

  
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 In connection with the services we provide, we share information with our associated
participants who collect, process, store and transmit sensitive data. Given the rules established by payment network processors such as Visa and Mastercard, and applicable regulations, we may be held responsible for any failure or cybersecurity
breaches attributed to our associated participants as they relate to the information we share with them. The accidental or unauthorized access to or disclosure, loss, destruction, disablement or encryption of, use or misuse of or modification of
data of the end users of payment services (e.g., payers, receivers, cardholders, merchants and those who may hold funds and balance in their accounts, among others) by us or our associated participants or through systems we provide could result in
significant fines, penalties, orders, sanctions and proceedings or actions against us by the payment networks, governmental bodies and other regulatory authorities, end users or third parties, or loss of our PCI accreditation, which could have a
material adverse effect on our business, financial condition and results of operations. Any such proceeding or action, and any related indemnification obligation, could damage our reputation, force us to incur significant expenses in defense of
these proceedings, distract our management, increase our costs of doing business or result in the imposition of financial liability.
 Our
security measures or those of our associated participants could be insufficient and breached as a result of third-party action, human (including employee) errors, technological limitations, defects or vulnerabilities in our offerings or those of our
third-party service providers, natural or man-made disasters, malfeasance or otherwise. In addition, although we generally have agreements relating to cybersecurity and data privacy in place with our
associated participants, we do not have agreements in place with all of our associated participants. Where we do have agreements in place, they are limited in nature and we cannot assure you that such agreements will prevent the accidental or
unauthorized access to or disclosure, loss, destruction, disablement or encryption of, use or misuse of or modification of data (including personal data) or enable us to obtain reimbursement from associated participants in the event we should suffer
any such incidents. In addition, many of our merchants are SMBs that have limited competency regarding data security and handling requirements and may thus experience data losses. Because we do not control our associated participants and our ability
to monitor their data security is limited, we cannot ensure the security measures they take will be sufficient to protect data (including personal data).

Any accidental or unauthorized access to or disclosure, loss, destruction, disablement or encryption of, use or misuse of or modification of
data, cybersecurity breach or other security incident that we or our associated participants have in the past experienced, and in the future could experience, or the perception that one has occurred or may occur, could harm our reputation, reduce
the demand for our products and services and disrupt normal business operations. In addition, it may require us to spend material resources to investigate or correct the breach and to prevent future security breaches and incidents, expose us to
uninsured liability, increase our risk of regulatory scrutiny, expose us to legal liabilities, including litigation, regulatory enforcement, indemnity obligations or damages for contract breach, and cause us to incur significant costs, any of which
could materially adversely affect our business, financial condition and results of operations. Moreover, there could be public announcements regarding any such incidents and any steps we take to respond to or remediate such incidents, and if
securities analysts or investors perceive these announcements to be negative, it could have a substantial adverse effect on the price of our Subordinate Voting Shares. A significant cybersecurity breach of our systems or communications could also
result in payment networks prohibiting us from processing transactions on their networks, which could materially impede our ability to conduct business, materially impact the reputation of our business and lead to a decline in demand for our
products and services. In addition, our remediation efforts may not be successful. While no security incidents in the past have had a material adverse effect on our business, financial condition or results of operations, we cannot predict the impact
of any such future events. These risks may increase as we continue to grow and collect, process, store and transmit increasingly large amounts of data.

Our systems and our third-party providers’ systems may fail, including due to factors beyond our control, which could interrupt our service, cause
us to lose business and increase our costs.
 We depend on the efficient and uninterrupted operation of numerous systems, including
our computer systems, our software and that of third parties and telecommunications networks, as well as data centers and other systems of third parties. Our systems and operations or those of our associated participants could be exposed to
interruptions, delays or outages from, among other things, fire, natural disaster, power loss, telecommunications failure, unauthorized entry and computer viruses. Our systems or those of third parties may also contain undetected errors or other
performance problems or may fail due to human error. Although we maintain insurance policies specifically for property and business interruptions, these policies may not be adequate to cover losses arising as a result of any such interruptions.
Defects in our systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures or other difficulties could result in:

  
 45 

	 	•	 	 loss of revenue;

  

	 	•	 	 loss of clients;

  

	 	•	 	 loss or breach of merchant or consumer data;

 

	 	•	 	 loss of membership with Visa, Mastercard or other payment networks, leading to loss of our ability to access
their networks;

  

	 	•	 	 fines imposed by payment networks and other issues relating to
non-compliance with applicable payment network requirements;

  

	 	•	 	 fines imposed by regulators, including the FCA, the Central Bank of Cyprus and the Dutch Central
Bank;

  

	 	•	 	 harm to our business or reputation resulting from negative publicity;

 

	 	•	 	 exposure to fraud losses or other liabilities;

 

	 	•	 	 additional operating and development costs;

 

	 	•	 	 diversion of technical and other resources; and/or

 

	 	•	 	 breach of contractual obligations, such as guarantees to maintain performance levels at certain levels given to
many of our clients, which could harm client relationships and cause us to issue credits to clients or incur other additional liability.  

Our business is also dependent on the continued growth and maintenance of the Internet’s infrastructure. There can be no assurance that
the Internet’s infrastructure will continue to be able to support the demands placed on it by sustained growth in the number of users and amount of traffic. To the extent that the Internet’s infrastructure is unable to support the demands
placed on it, the business of merchants, and thus our business, may be impacted. We may also be disadvantaged by the adverse effect of any delays or cancellations of private sector or government initiatives designed to expand broadband access. We,
and our merchants, may be impacted by a reduction in the growth of, or a decline in, access to broadband and Internet.
 We are particularly
reliant on our acquiring banks to access the payment networks in the United States and Canada; on Lusis S.A. and Worldnet International for front-end processing services, on Total System Services Inc., for
certain logistics and back-end processing services and on The Phoenix Group for sourcing our terminals, which are often our first point of contact with customers, as well as terminal services and deployment.
We also rely on third-party data centers to host aspects of our platform and solutions, including Tango and Nuvei Gateway, among others, primarily in Montreal, Toronto, London and Amsterdam. Any interruptions, delays or outages in the services
provided by these providers, or a deterioration of our relationships with them, could impact the use of, and our clients’ satisfaction with, our products and services and could harm our business and reputation. Moreover, to the extent any of
these providers begins offering its services to other payment processors or others, the frequency of interruptions, delays or outages in service availability may increase. Any of the foregoing could have a material adverse effect on our business,
financial condition and results of operations.
 We have business systems that do not have full redundancy.

While much of our processing infrastructure is located in multiple redundant data centers, we have some core business systems, such as our
customer relationship management systems, that are located in only one facility and do not have redundancy. An adverse event, such as damage or interruption from natural disasters, power or telecommunications failures, cybersecurity breaches,
criminal acts and similar events, with respect to such systems or the facilities in which they are located could impact our ability to conduct business and perform critical functions, which could negatively impact our business, financial condition
and results of operations.
 If we are unable to successfully obtain, maintain, protect, enforce or otherwise manage our intellectual property and
proprietary rights, we may incur significant expenses and our business may be adversely affected.
 Our success depends in part, and
we place considerable emphasis, on obtaining, maintaining, protecting and enforcing relevant intellectual property and proprietary rights, which may include patent, design, utility model, trademark, copyright and trade secret protection, as well as
regulatory exclusivity periods and confidentiality agreements (collectively, “IP Rights”). We cannot be sure that our means of obtaining, maintaining and enforcing our IP Rights in the United States or abroad will be adequate to protect
such rights against infringement, misappropriation or other violation. We may not receive protection for pending or future applications relating to IP Rights owned by or licensed to us, and the scope of protection granted under any

  
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issued or registered IP Rights may not be sufficiently broad to protect our technology, products, services, systems, brands, trademarks or information. Also, because of the rapid pace of
technological change in our industry, aspects of our business and our products and services rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these
third parties on reasonable terms or at all. Moreover, the laws of certain jurisdictions, including emerging countries, do not protect IP Rights to the same extent as the laws of the United States. If we cannot adequately obtain, maintain, protect
or enforce our IP Rights, third parties may be able to compete more successfully against us and develop and commercialize substantially identical products, services or technologies, which could have a material adverse effect on our business,
financial condition or results of operations.
 Third parties may challenge, invalidate, circumvent, infringe or misappropriate our IP
Rights, and such IP Rights may be lost or no longer sufficient to permit us to take advantage of current market trends or to otherwise provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain service
offerings or other competitive harm. Others, including our competitors, may independently develop similar technology, duplicate our products and services or design around our IP Rights, and in such cases, we could not assert our IP Rights against
such parties. Moreover, third parties may infringe, misappropriate or otherwise violate IP Rights owned or licensed by us and we may assert claims against such third parties to enforce, or determine the scope and enforceability of, our IP Rights,
which could result in lengthy litigation or other proceedings and could cause a diversion of resources and may not prove successful. Such third parties could also counterclaim that any IP Rights we assert are invalid or unenforceable and if such
counterclaims are successful, we could lose valuable IP Rights.
 We rely heavily on trade secrets and proprietary know-how to protect our products, services and technology and their development and commercialization, and rely in part on confidentiality agreements with suppliers and other partners, employees, independent
contractors and consultants. However, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our trade secrets. Moreover, these agreements may be breached, and we may not have or be able to
enforce adequate remedies for any such breach. There is also no guarantee that these agreements or other precautions will provide sufficient protection against any unauthorized access, use or misuse, misappropriation, counterfeiting, cloning,
reverse engineering or disclosure of any of our trade secrets, proprietary know-how and any other information or technology. Trade secrets can be difficult to protect and some courts inside and outside of the
United States are unwilling or less willing to protect trade secrets as compared to other forms of intellectual property. Defending against unauthorized access, use or misuse, misappropriation, counterfeiting, cloning, reverse engineering or
disclosure of our technology, trade secrets, proprietary know-how and other IP Rights and technology may result in lengthy and expensive litigation or other proceedings with uncertain outcomes and cause
significant disruption to our business and operations. If we are unable to obtain, maintain, protect or effectively enforce our IP Rights, it could impact the development, manufacture and commercialization of our products, services and solutions and
have a material adverse effect on our business, financial condition or results of operations.
 Claims by others that we have infringed their
proprietary technology or other IP Rights could harm our business.
 Our success depends, in part, on our ability to develop and
commercialize our services and technologies without infringing, misappropriating or otherwise violating the IP Rights of third parties. However, we may not be aware that our products, services, solutions or technologies are infringing,
misappropriating or otherwise violating third-party IP Rights, and such third parties may bring claims alleging such infringement, misappropriation or violation. Third parties may have issued, or may eventually issue, patents that could be infringed
by our services or technology. Any of these third parties could make a claim of infringement against us with respect to our services or technology. We may also be subject to claims by third parties for breach of copyright, trademark, license usage
or other IP Rights. When any such claims are asserted against us, we may seek to license the third party’s IP Rights, which could be expensive. We may be unable to obtain the necessary licenses on satisfactory terms, if at all. Any claim from
third parties may result in a limitation on our ability to use the intellectual property subject to these claims or could prevent us from registering our brands as trademarks. Even if we believe that intellectual property-related claims are without
merit, defending against such claims is time-consuming and expensive, and could result in the diversion of the time and attention of our management and employees. Claims of intellectual property infringement also might require us to redesign
affected services, enter into costly settlement or license agreements, pay costly damage awards, change our brands or face a temporary or permanent injunction prohibiting us from importing, marketing, selling or operating certain of our services,
using certain of our brands or operating our business as presently conducted. Even if we have an 

  
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agreement for indemnification against such costs, the indemnifying party, if any in such circumstances, may be unable to uphold its contractual obligations.

We may be subject to adverse publicity or reputational harm, even if claims against us are later shown to be unfounded or unsubstantiated.
Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have an adverse effect on the
price of our Subordinate Voting Shares. The award of damages, including material royalty payments, or the entry of an injunction against the manufacture, import, marketing, sale or operation of some or all of our products or services, or our entry
into any license or settlement agreement in connection with such claims could affect our ability to compete with third parties and have a material adverse effect on our business, financial condition and results of operations.

If we are unable to obtain or fail to comply with the required licenses to operate our business or experience disputes with licensors or disruptions to
our business relationships with our licensors, we could lose license rights that are important to our business.
 We have entered
into license agreements with third parties and may need to obtain additional licenses from our existing licensors and others to advance or allow commercialization of our solutions. It is possible that we may be unable to obtain any additional
licenses at a reasonable cost or on reasonable terms, if at all. In that event, we may be required to expend significant time and resources to redesign our solutions or to develop or license replacement technology, all of which may not be feasible
on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected solutions, which could disrupt and adversely affect our business.

Disputes may arise regarding intellectual property, including software and data, that is subject to a licensing agreement, including the scope
of rights granted under the license agreement and other interpretation-related issues. In addition, the agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such
agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology or
increase what we believe to be our financial or other obligations under the relevant agreement. If these events were to occur, we may lose the right to continue to use and exploit such licensed intellectual property or technology in connection with
our operations and solutions, which could have a material adverse effect on our business, financial condition and results of operations.
 Our use of
open source software could negatively affect our ability to sell our solutions and subject us to possible litigation.
 Our solutions
incorporate and are dependent to some extent on the use and development of open-source software and we intend to continue our use and development of open-source software in the future. Such open-source software is generally licensed by its authors
or other third parties under so-called “open source” licenses and is typically freely accessible, usable and modifiable.

Pursuant to such open source licenses, we may be subject to certain conditions, including requirements that we offer our proprietary software
that incorporates the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software, that we license such modifications or derivative
works under the terms of the particular open source license or that we grant other licenses to our intellectual property. We seek to ensure that our proprietary software is not combined with, and does not incorporate, open-source software in ways
that would require the release of the source code of our proprietary software to the public. Certain components of our platform and products incorporate software that is licensed under an open-source license which would require release of
proprietary code if such platform or products was released or distributed to third parties. We take steps to ensure that such platform or products are not released or distributed but we have co-located certain
such platform or products on third parties’ premises.

  
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 If an author or other third party that uses or distributes such open source software were to
allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of
our solutions that contain or are dependent upon such open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our solutions. Litigation could be costly for us to defend,
have a negative effect on our operating results and financial condition or require us to devote additional research and development resources to change our platform. As there is little or no legal precedent or judicial interpretation governing the
interpretation of many of the terms of certain of these licenses, the potential impact of these terms on our business is uncertain and may result in unanticipated obligations regarding our solutions and technologies.

Any requirement to disclose our proprietary source code, in defending our use of open-source licenses or otherwise, the termination of
open-source license rights or payments of damages for breach of contract could be harmful to our business, results of operations or financial condition, and could help our competitors develop products and services that are similar to or better than
ours with lower development effort and time. Alternatively, to avoid the public release of the affected portions of our source code, we could be required to expend substantial time and resources to re-engineer
some or all of our software.
 In addition to risks related to license requirements, use of open source software can lead to greater risks
than use of third-party commercial software, as open source licensors generally do not provide warranties, controls on the origin or development of the software or remedies against the licensors, nor are there any guarantees of any updates to the
open source software being released, which means that some open source software can be more susceptible to cybersecurity attacks than commercially available software. Many of the risks associated with usage of open-source software cannot be
eliminated and could adversely affect our business.
 It is possible that we may not be aware of all instances where open-source software
has been incorporated into our proprietary software or used in connection with our solutions or our corresponding obligations under open-source licenses. We do not have open-source software usage policies or monitoring procedures in place. We rely
on multiple software programmers to design our proprietary software and we cannot be certain that our programmers have not incorporated open-source software into our proprietary software that we intend to maintain as confidential or that they will
not do so in the future. To the extent that we are required to disclose the source code of certain of our proprietary software developments to third parties, including our competitors, in order to comply with applicable open-source license terms,
such disclosure could harm our intellectual property position, competitive advantage, results of operations and financial condition. In addition, to the extent that we have failed to comply with our obligations under particular licenses for
open-source software, we may lose the right to continue to use and exploit such open-source software in connection with our operations and solutions, which could disrupt and adversely affect our business.

Risks Relating to Regulation
 We are subject to
costs and risks associated with new or changing laws and regulations and governmental action affecting our business.
 We operate in
a complex regulatory and legal environment and are subject to a wide variety of laws and regulations in the jurisdictions in which we operate. Some of the laws and regulations in Europe, the United States, the U.K. and Canada and other jurisdictions
in which we operate that affect or may affect us include: those relating to anti-money laundering and cross-border and domestic money transmission; those relating to consumer products, product liability and consumer protection; those relating to
foreign exchange trading and gaming and sports betting; those relating to the manner in which we advertise, market and sell products; labor and employment laws, including wage and hour laws; tax laws or interpretations thereof; bank secrecy laws;
data protection and privacy laws and regulations; and securities and exchange laws and regulations. The laws and regulations specifically applicable to us may also change on the basis of a change in the nature of our products or services, or a
change in the jurisdictions in which those products or services are being offered, including, but not limited to, as a result of acquisitions. There can be no guarantee that we will have sufficient resources to comply with new laws, regulations or
government action, or to successfully compete in the context of a shifting regulatory environment. Moreover, these laws and regulations may change, sometimes significantly, as a result of political, economic and social events.

  
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 We also generate a significant portion of our revenue from merchants operating in the
regulated gaming and sports betting and foreign exchange trading sectors. Regulations in the gaming and sports betting and foreign exchange trading sectors vary significantly among different countries and localities. In many cases, they may be
unclear and may also change, sometimes dramatically. Due to the borderless nature of online gaming and sports betting and foreign exchange trading, a merchant properly licensed in its home jurisdiction may still provide services to consumers in
other jurisdictions, including jurisdictions where regulations are ambiguous or where gaming, sports betting and/or foreign exchange trading are prohibited. We have policies and procedures in place that are designed to ensure that we comply with
applicable local laws and regulations regarding card brands, regulated verticals and bank sponsor requirements. However, these policies and procedures may not always be effective. If we provide services, intentionally or unintentionally, to gaming
and sports betting and foreign exchange trading companies that do not have proper regulatory authorizations, we could be subject to fines, penalties, reputational harm or other negative consequences. Furthermore, European Union laws, regulations and
directives are sometimes incompatible with local laws in place in European Union member countries, which introduces additional uncertainty around licensing and ongoing compliance obligations into the regulatory framework. Regulators may also seek to
place greater emphasis on payment service providers who provide services to gaming and sports betting and foreign exchange trading companies, which could increase these risks. Moreover, we face increased risk of liability in jurisdictions in which
we have an on the ground presence, assets, personnel or funds, such as through maintaining a bank account. Violations or changes in these or other laws and regulations that we are subject to may have a material adverse effect on our business,
financial condition and results of operations.
 Changes in laws or regulations relating to privacy and data protection, or any actual or perceived
failure by us to comply with such laws and regulations, or contractual or other obligation relating to, privacy and data protection could adversely affect our business.

We receive, generate and store significant and increasing volumes of sensitive information, such as personal data of our employees, our
merchants and any end users of payment services (e.g., payers, receivers, cardholders, merchants and those who may hold funds and balance in their accounts). As we seek to build a trusted and secure platform for commerce, and as we expand our
network of clients and facilitate their transactions and interactions with one another, we are and will increasingly be subject to a variety of laws, directives and regulations, as well as contractual obligations, relating to the collection, use,
retention, security, disclosure, transfer, destruction, de-identification and other processing of sensitive information in the jurisdictions in which we operate. The regulatory framework for privacy, data
protection and data transfers worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Applicable privacy laws and court decisions could impact our ability to transfer personal data internationally. For example,
the Court of Justice of the European Union, the European Union’s highest court, concluded in July 2020 that the European Union-U.S. Privacy Shield (a mechanism for the transfer of personal data from the
European Union to the U.S.) is invalid. As a result of this decision, organizations transferring personal data from the European Union to a third country, such as the United States, are now required to carry out a transfer risk assessment in order
to determine whether the recipient country offers the same level of protection than the one offered in the European Union. If the recipient country offers the same level of protection, the organization implements transfer tools (e.g. standard
contractual clauses). If the recipient country fails to offer the same level of protection, however, supplementary measures are required to be taken, and without such measures, the transfers may be prohibited. 

We publicly post documentation regarding our data privacy practices. Although we endeavor to comply with our published policies, we may at
times fail to do so or be alleged to have failed to do so. The publication of our privacy policies that provide promises and assurances about privacy and security can subject us to potential government or legal action if they are found to be
deceptive, unfair, or misrepresentative of our actual practices. Any failure, real or perceived, by us to comply with our posted privacy policies or with any regulatory requirements, certifications or orders or other privacy or consumer
protection-related laws and regulations applicable to us could cause merchants to reduce their use of our products and services and could materially and adversely affect our business. In many jurisdictions, enforcement actions and consequences for
noncompliance can be significant and are rising.
 The U.S. federal and various state government bodies and agencies have adopted or are
considering adopting laws and regulations limiting or otherwise regarding the collecting, distribution, use, disclosure, storage and security of personal information. For example, in June 2018, California passed the California Consumer Privacy Act
(“CCPA”), which became effective on January 1, 2020 and imposes stringent data privacy and data protection requirements for the data of California residents. Enforcement of the CCPA by the California Attorney General began on
July 1, 2020. Among other things, it requires 

  
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covered companies to provide new disclosures to California consumers and afford such consumers new data protection rights, including the ability to opt-out
of certain sales of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal data that may increase the likelihood of, and risks
associated with, data breach litigation. The effects of this legislation are potentially far-reaching and may require us to modify our data processing practices and policies and to incur substantial costs and
expenses in an effort to comply.
 California voters also passed a new privacy law, the California Privacy Rights Act (“CPRA”), in
the November 2020 election. The CPRA significantly modifies the CCPA, including by imposing additional obligations on covered companies and expanding consumers’ rights with respect to certain sensitive personal information, potentially
resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply prior to the 2023 effective date. The CPRA also creates a new state agency that will be vested with authority to implement and enforce
the CCPA and the CPRA. Aspects of the CCPA, the CPRA, and other laws and regulations relating to data protection, privacy and information security, as well as their enforcement, remain unclear, and we may be required to modify our practices in an
effort to comply with them. 
 The CCPA and CPRA could mark the beginning of a trend toward more stringent privacy legislation in the United
States. The CCPA has prompted a number of proposals for federal and state privacy legislation that, if passed, could increase our potential liability, add layers of complexity to compliance in the U.S. market, increase our compliance costs and
adversely affect our business. 
 Privacy laws inspired by the CCPA have also been introduced in a number of other states. Internationally,
laws and regulations in many jurisdictions apply broadly to the collection, use, storage, disclosure and security of data that identifies or may be used to identify or locate an individual, such as names, email addresses and, in some jurisdictions,
Internet Protocol, or IP addresses. For example, we are subject to Canada’s PIPEDA, and the analogous provincial laws, which similarly impose data privacy and security obligations on our processing of personal data. In December 2019, Canadian
Ministers were mandated to draft and implement a new bill to reform PIPEDA providing expressly for the establishment of new rights related to privacy, such as personal data portability, the ability to remove, delete and erase personal data and the
ability to withdraw consent to the exchange or sale of personal data, notably.
 We are also subject to Québec’s Act respecting
the protection of personal information in the private sector (the “Private Sector Act”). On June 12, 2020, the Government of Québec tabled Bill 64, an Act to modernize legislative provisions as regards the protection of
personal information (“Bill 64”), which proposes major amendments to the Private Sector Act, notably, to impose new obligations on Québec businesses while significantly increasing the powers of its supervisory authority. Should Bill
64 pass, the Québec privacy regime for private companies would become more onerous, as new proposed penal provisions would introduce fines of either up to $25,000,000 or 4% of worldwide turnover for the preceding fiscal year, whichever sum is
greater. Additionally, the proposed amendments include organizations’ duty to adopt corporate governance rules regarding the protection of personal information, organizations’ duty to report and log “confidentiality incidents”,
requirements to assess privacy-related factors with regard to information systems and electronic service delivery projects, and many others.

The European Parliament and the Council of the European Union in 2016 adopted the European Union’s GDPR, which came into effect in May
2018, superseding the European Union Data Protection Directive, and imposing more stringent data privacy and data protection requirements. The GDPR introduced numerous privacy-related changes for companies whose processing is subject to the GDPR,
including greater control for data subjects (such as the “right to be forgotten”), increased data portability for data subjects and increased fines. The GDPR authorizes fines for certain violations of up to 4% of global annual revenue or
€20 million, whichever is greater. Further, while the U.K. enacted the Data Protection Act 2018 in May 2018 that supplements the GDPR and has publicly announced that it will continue to regulate the protection of personal data in the same
way post-Brexit, Brexit has created uncertainty with regard to the future of regulation of data protection in the U.K. Some countries also are considering or have passed legislation requiring local storage and processing of data, or similar
requirements, which could increase the cost and complexity of delivering our platform.
 Complying with CCPA, PIPEDA, the Private Sector Act
and the GDPR or other laws, regulations or other obligations relating to privacy, data protection, data transfers, data localization, or information security may cause us to incur substantial operational costs or require us to modify our data
practices. Non-compliance could result in proceedings against us by 

  
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governmental entities or others, could result in substantial fines or other liability, and may otherwise adversely affect our business, financial condition and results of operations.

Additionally, some statutory requirements, both in the United States and abroad include obligations for companies to notify individuals of
security breaches involving particular personal information, which could result from breaches experienced by us or our service providers. For example, laws in all 50 U.S. states require businesses to provide notice to customers whose personal data
has been disclosed as a result of a data breach. The laws are not consistent, and compliance in the event of a widespread data breach is difficult and may be costly. States are also frequently amending existing laws, requiring attention to
frequently changing regulatory requirements. The GDPR also contains data breach notification requirements. Any actual or perceived security breach could harm our reputation and brand, expose us to potential liability, result in a fine from payment
networks or loss of PCI accreditation or require us to expend significant resources on data security and in responding to any such actual or perceived breach. Any contractual protections we may have from our service providers may not be sufficient
to adequately protect us from any such liabilities and losses, and we may be unable to enforce any such contractual protections.
 In
addition to government regulation, privacy advocates and industry groups have and may in the future propose self-regulatory standards from time to time. These and other industry standards may legally or contractually apply to us, or we may elect to
comply, or facilitate our merchants’ compliance, with such standards. Additionally, our customers and prospective customers have required, and may in the future require, us to comply with certain privacy, data protection and information
security standards, including with respect to our data encryption practices, and we may undertake contractual commitments to adhere to such standards. We expect that there will continue to be new proposed laws and regulations and guidance concerning
privacy, data protection and information security, and we cannot yet determine the impact such future laws, regulations, standards and guidance may have on our business. New laws, amendments to or
re-interpretations of existing laws, regulations, industry standards, guidance, contractual obligations, customer expectations and other obligations may require us to incur additional costs and restrict our
business operations. Because the interpretation and application of laws, standards, contractual obligations and other obligations relating to privacy and data protection are still uncertain, it is possible that these obligations may be interpreted
and applied in a manner that varies by jurisdiction and/or that is inconsistent with our data privacy policies and procedures, including with respect to our data encryption practices, or the features of our platform. If so, we may face fines,
lawsuits, regulatory investigations, imprisonment of company officials and public censure, other claims and penalties, significant costs for remediation and damage to our reputation. We could also be required to fundamentally change our business
activities and practices, which could adversely affect our business. We may be unable to make such changes and modifications in a commercially reasonable manner, or at all. Furthermore, the costs of compliance with, and other burdens imposed by, the
laws, regulations, policies and guidance that are applicable to the businesses of our merchants may limit the use and adoption of, and reduce the overall demand for, our services. Any inability to adequately address privacy, data protection, or
information security-related concerns, even if unfounded, or to successfully negotiate related contractual terms with merchants, or to comply with applicable laws, regulations, policies, standards and guidance relating to privacy, data protection
and information security, including those with which we elect to comply, could result in additional cost and liability to us, harm our reputation and brand, damage our relationship with important providers and adversely affect our business,
financial condition and results of operations.
 Our business is subject to complex and evolving requirements and oversight related to our provision
of payments services and other financial services.
 The laws, rules and regulations that govern our business include, or may in the
future include, those relating to banking, deposit-taking, cross-border and domestic money transmission, payment card networks, currency exchange, payments services (such as payment processing and settlement services), consumer financial protection,
commercial electronic messaging, anti-money laundering, terrorist financing, escheatment and other standards or requirements imposed by regulators or the payment networks. For example, the payment networks require compliance with the PCI Data
Security Standard, a set of industry requirements designed to ensure that companies that process, store, or transmit payment card information maintain a secure environment to protect cardholder data, as well as, in Canada, the Code. These laws,
rules, regulations, standards and requirements are enforced by multiple authorities, governing bodies and organizations in Europe, the United States, the U.K. and Canada and the other jurisdictions in which we operate. As our business continues to
develop and expand, we may become subject to additional requirements, which may limit or change how we conduct our business.

  
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 Our activities in the European Union are subject to the PSD2, implemented in both the U.K.
in 2017 (by the Payment Services Regulations 2017) and the Republic of Cyprus in 2018 with a view to bringing regulation up to date with developments in the payment services industry, to promote further innovation and to improve consumer protection.
SafeCharge Limited, a wholly-owned subsidiary of SafeCharge, is an Electronic Money Institution authorized and regulated by the Central Bank of Cyprus and has obtained permission under the U.K. FCA’s Temporary Permissions Regime to continue
providing payment services to merchants in the U.K. following the end of the transitional period for the U.K.’s withdrawal from the European Union on December 31 2020. In addition, SafeCharge Financial, another wholly-owned subsidiary of
SafeCharge, is authorized by the U.K. FCA as a Payment Institution. The authorization allows SafeCharge Financial to provide payments services in the U.K. in accordance with the Payment Services Regulations 2017. Regulatory reform in either
jurisdiction could increase the cost of our operations or deny access to certain territories in the provision of certain services. As a result of the U.K.’s withdrawal from the European Union and the absence of an agreement between the U.K. and
European Union with respect to financial services, SafeCharge Financial’s cross-border passporting rights, which allowed it to provide payment services throughout the European Union, ceased to be available from the end of 2020.

The Smart2Pay Transaction entailed the acquisition of its regulated subsidiary, Smart2Pay Regco, which is licensed as a payment services
provider by the Dutch Central Bank to provide payment services 3 and 5 as referred to in PSD2. Continued compliance with the Dutch Central Bank’s rules entails additional costs and regulatory reform in the Netherlands could further increase the
cost of our operations in that jurisdiction.
 We believe that our activities in the United States and Canada do not require a charter or
license from federal, state, or provincial financial regulatory authorities to conduct our activities in the United States or Canada. However, in 2018, the Canadian federal government restated its intent to introduce legislation to implement a new
federal retail payments oversight framework (similar to PSD2). If implemented, the framework would require payment service providers to establish sound operational risk management practices and to protect users’ funds against losses, plus
registration, which would represent a significant development in the Canadian payments landscape and require additional time and effort be spent to develop, implement and monitor such practices in Canada.

If we are found to have engaged in financial services activities requiring a charter or a license without having obtained such charter or
license, we could be subject to civil and criminal fines, penalties, costs, legal fees, reputational damage or other negative consequences. For example, we could be required to change our business practices in order to comply with additional laws
and regulations, including those related to anti-money laundering and terrorist financing, or could be forced to cease engaging in such regulated activity entirely. This could adversely affect our business, financial condition and results of
operations.
 The Payment Networks Act (Canada) has been enacted with a view to regulating national payment networks and their commercial
practices. While this act refers to acquirers, it does not apply directly to them. However, it does contain various regulatory powers which have not yet been carried out, as the Code was adopted in lieu of regulations and relies on voluntary
compliance. Canadian payment networks, issuers and acquirers abide by it mainly as a result of payment network rules. The stated purpose of the Code is to ensure that merchants are fully aware of the costs associated with accepting credit and debit
card payments, provide merchants with increased pricing flexibility to encourage consumers to choose the lowest-cost payment option, and allow merchants to freely choose which payment options they will accept. There are 13 policy elements included
in the Code, including requirements that merchant-acquirer agreements and monthly statements include a sufficient level of detail and are easy to understand, that merchants will receive a minimum of 90 days’ notice of any fee increases or the
introduction of a new fee related to any credit or debit card transactions, or a reduction in applicable interchange rates, and that following notification of a fee increase or the introduction of a new fee, or a reduction in applicable interchange
rates not passed on to merchants, merchants will be allowed to cancel their contracts without penalty.
 The U.S. CFPB is the U.S. federal
financial regulator with authority over the provision of consumer financial products and services (including many offered by our merchants or partners). Although we are not directly subject to the CFPB’s supervisory authority, the rules issued
by the CFPB that apply to our merchants or partners may require us to adjust our activities and may increase our compliance costs. In addition, because we provide data processing services to banks and other financial institutions, we are or may
become subject to indirect inquiries from the CFPB or from federal or state banking regulators. To comply with their regulatory obligations, these banks and other financial institutions may be required to perform appropriate

  
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due diligence on us and our activities, evaluate our risk management, information security, and information management systems, and conduct ongoing monitoring of our performance and our ability
to deliver services.
 In addition, all persons engaged in commerce in the United States, including, but not limited to, us, our merchants
and our bank partners, are subject to Section 5 of the Federal Trade Commission Act prohibiting unfair or deceptive acts or practices, or UDAP. The Federal Trade Commission, or FTC, has authority to take action against nonbanks that engage in
UDAP. We are also subject to various other consumer protection laws and related regulations in the markets in which we operate, and we may be subject to lawsuits from time to time relating to such laws and regulations. If we are subject to similar
suits in the future or are found to have breached any consumer protection laws or regulations in any such market, this could have an adverse effect on our reputation, business, financial condition or results of operations.

We may be subject to fines or other penalties levied by regulators in one or more jurisdictions for failing to comply with applicable rules
and regulations. In addition we could be subject to significant criminal and civil lawsuits, forfeiture of significant assets or other enforcement actions, including loss of licensure in a given jurisdiction. We could also be required to make
changes to our business practices or compliance programs as a result of regulatory scrutiny. Moreover, any perceived or actual breach of compliance by us with respect to applicable laws, rules, and regulations could have a significant impact on our
reputation and could cause us to lose existing clients, prevent us from obtaining new clients, require us to expend significant funds to remedy problems caused by breaches and to avert further breaches and expose us to legal risk and potential
liability.
 Failure to comply with the CFPOA, the U.S. FCPA, anti-money laundering economic and trade sanctions regulations, and similar laws and
regulations could subject us to penalties and other adverse consequences.
 We operate our business in several countries where
companies often engage in business practices that are prohibited by Canadian, U.S. and other laws and regulations applicable to us. We are subject to anti-corruption laws and regulations, including the CFPOA, the FCPA, the U.K. Bribery Act, the USA
PATRIOT Act of 2001 and other laws that prohibit the making or offering of improper payments, including anti-bribery provisions in the Criminal Code of Canada and those enforced by the U.S. Department of Justice. These laws prohibit improper
payments or offers, including payments to governments, officials and business entities for the purpose of obtaining or retaining business. There can be no assurance that our employees, consultants and agents, including those that may be based in or
from countries where practices that violate Canadian, U.S. or other laws may be customary or commonplace, will not take actions in violation of our policies for which we may be ultimately responsible.

In addition, we are subject to certain anti-money laundering laws and regulations. In some jurisdictions, we are directly subject to these
regulations. In other cases, we are contractually required to comply with certain laws and regulations to which our bank partners are subject. These laws and regulations, including the Canadian PCMLTFA and its related regulations, and the U.S. Bank
Secrecy Act, as amended by the USA PATRIOT Act of 2001, typically require businesses to develop and implement risk-based anti-money laundering programs, report large cash transactions and suspicious activity, and maintain transaction records.

We are also subject to certain economic and trade sanctions programs that are administered by the Special Economic Measures Act in Canada and
the U.S. Treasury Department’s OFAC, which prohibit or restrict transactions to or from or dealings with specified countries, their governments, and in certain circumstances, their nationals, and with individuals and entities that are specially
designated nationals of those countries, narcotics traffickers, and terrorists or terrorist organizations. Similar anti-money laundering and sanctions laws apply to movements of currency and payments through electronic transactions and to dealings
with persons specified in lists maintained by the country equivalents to OFAC lists in several other countries and entail specific data retention obligations to be observed by intermediaries in the payment process. Our businesses in those
jurisdictions are subject to those data retention obligations.
 Failure to comply with any of these laws or regulations or changes in the
legal or regulatory environment, including changing interpretations and implementations of new or varying regulatory requirements, may result in significant financial or other penalties. We may also face significant criminal and civil lawsuits,
forfeiture of significant assets or other enforcement actions, including loss of licensure in a given jurisdiction, or reputational damage, which could cause us to lose existing clients or prevent us from obtaining new clients or otherwise adversely
affect our business, financial condition or results of operations. 

  
 54 

 
We could also be required to make changes to our business practices or compliance programs as a result of regulatory scrutiny. Any of the foregoing could have a material adverse effect on our
business, financial condition and results of operations.
 Changes in tax laws and regulations or trade rules may impact our effective tax rate and
may adversely affect our business, financial condition and operating results.
 We operate on a global basis and have business
operations in a number of different tax jurisdictions. Changes in our tax profile due to acquisitions or changes in tax legislation and rates in jurisdictions in which we operate may adversely affect our business, financial condition and operating
results. Additionally, there is uncertainty with respect to tax and trade policies, tariffs and government regulations affecting trade between countries. Major developments in tax policy or trade relations, such as the Canada-United States-Mexico
Agreement (the “CUSMA”) which came into effect on July 1, 2020, the disallowance of tax deductions for imported merchandise or the imposition of unilateral tariffs on imported products, could have a material adverse effect on our
growth opportunities, business and results of operations. Regarding the CUSMA, in April 2020 all three countries provided formal notification that their respective internal ratification processes were complete. Since July 1, 2020, the CUSMA
replaced the North American Free Trade Agreement. The impact of CUSMA on our business and operations remains uncertain.
 We previously have
participated in government programs in Canada that provide investment tax credits based upon qualifying research and development expenditures. If taxation authorities successfully challenge such expenses or the correctness of such income tax credits
claimed, our historical operating results could be adversely affected.
 We currently conduct activities through our subsidiaries pursuant
to transfer pricing arrangements. If two or more affiliated companies are located in different countries, the tax laws or regulations of each country generally will require that transfer prices be the same as those between unrelated companies
dealing at arm’s length. While we believe that we operate in compliance with applicable transfer pricing laws and intend to continue to do so, our transfer pricing procedures are not binding on applicable tax authorities. If tax authorities in
any of these countries were to successfully challenge our transfer prices as not reflecting arm’s length transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer
prices, which could result in a higher tax liability to us.
 Risks Relating to Our Subordinate Voting Shares

If our Subordinate Voting Share price fluctuates, you could lose a significant part of your investment.

The stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the
operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of our Subordinate Voting Shares, regardless of our operating performance. In the past, following periods of
volatility in the market price of certain companies’ securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or
results of operations. If a market does not develop or is not maintained, the liquidity and price of our Subordinate Voting Shares could be seriously harmed.

Sales of substantial amounts of our Subordinate Voting Shares in the public market, or the perception that these sales may occur, could cause the market
price of our Subordinate Voting Shares to decline.
 Sales of substantial amounts of our Subordinate Voting Shares in the public
market could occur at any time after the expiration of the 180-day contractual lock-up period described in the paragraph below. These sales, or the market perception
that these sales may occur, could cause the market price of our Subordinate Voting Shares to decline. This could also impair our ability to raise additional capital through the sale of our equity securities.

Under our Articles, we are authorized to issue an unlimited number of Multiple Voting Shares and Subordinate Voting Shares, of which
92,247,808 Multiple Voting Shares and 45,924,637 Subordinate Voting Shares are outstanding. In connection with the completion of the IPO, we, each of our directors, executive officers and other current shareholders, and their respective

  
 55 

 
associates and affiliates holding securities of the Company entered into a lock-up agreement pursuant to which we agreed not to offer, sell, or dispose of
any shares of our share capital or securities convertible into or exchangeable or exercisable for any shares of our share capital during the 180-day period following the date of the IPO (the “Lock-Up Agreements”). The IPO Joint Active Bookrunners, however, may, in their sole discretion, permit us, our directors, executive officers and current shareholders who are subject to these Lock-up Agreements to sell shares prior to the expiration of the Lock-up Agreements. Following the expiration of the 180-day period,
these shares will be available for sale in the public markets subject to restrictions under applicable securities laws. In addition, as of the date hereof, there are outstanding options to acquire our Subordinate Voting Shares. The Subordinate
Voting Shares subject to these options will, to the extent permitted by any applicable vesting requirements, lock-up agreements and restrictions under applicable securities laws, also become eligible for sale
in the public market. We also granted registration rights to our Principal Shareholders (as defined herein) pursuant to the Investor Rights Agreement. If a large number of our Subordinate Voting Shares or securities convertible into our Subordinate
Voting Shares are sold in the public market after they become eligible for sale, or there is a perception that such sales could occur, the trading price of our Subordinate Voting Shares could decline and impede our ability to raise future capital.
Further, we cannot predict the size of future issuances of our shares or the effect, if any, that future sales and issuances of shares would have on the market price of our Subordinate Voting Shares.

Limitations imposed by the FCA, the Central Bank of Cyprus and the Dutch Central Bank on the right to own our securities may result in sanctions being
imposed on our regulated subsidiaries and an acquiror of such securities in the event of non-compliance by such acquiror, and may reduce the value of our Subordinate Voting Shares.

Several of the Company’s indirect subsidiaries are subject to regulatory supervision, including the requirement to obtain prior consent
when a person holds, acquires or increases a qualifying holding in those entities. On the basis of these regulations, no person may hold or acquire, alone or together with others, a direct or indirect stake of 10% or more of our shares, 10% of the
voting rights attached to our shares, or exercise, directly or indirectly, an equivalent degree of control in us (or increase an existing holding of 10% or more of our shares or the voting rights attached to our shares crossing a control threshold
(20%, 30% or 50%)) without first obtaining the prior approval of the FCA and the Central Bank of Cyprus and a prior declaration of no objection from the Dutch Central Bank.

Non-compliance with those requirements constitutes an offense that may lead to criminal prosecution,
as well a violation of applicable laws governing the payment services and electronic money industry in the relevant jurisdictions, which may lead to instructions, penalties and sanctions against the Company’s regulated subsidiaries as well as
the person seeking to hold, acquire or increase the qualifying holding (including, but not limited to, substantial fines and prison sentences), may subject the relevant transactions to cancellation or forced sale, and may result in increased
regulatory compliance requirements or other potential regulatory restrictions on our business (including in respect of matters such as corporate governance, restructurings, mergers and acquisitions, financings and distributions), enforced suspension
of operations, cancellation of corporate resolutions made on the basis such qualifying holding, restitution to customers, removal of board members, suspension of voting rights and variation, cancellation or withdrawal of licenses and authorizations.
If any of this were to occur, it could damage our reputation, limit our growth and materially and adversely affect our business, financial condition and results of operations.

In addition, uncertainty and inconvenience created by those requirements may discourage potential investors from acquiring 10% or more of our
Subordinate Voting Shares, which may in turn reduce the value of the Subordinate Voting Shares.
 If we fail to implement and maintain effective
internal controls over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.

Prior to the IPO, we have been a private company with limited accounting personnel and other resources to address our internal control over
financial reporting and procedures. Since the IPO, we are subject to reporting and other obligations under applicable Canadian securities laws, including NI 52-109, and the rules of the TSX. These reporting
and other obligations place significant demands on our management, administrative, operational and accounting resources. In order to meet such requirements, we have, among other things, established systems, implemented financial and management
controls, reporting systems and procedures and hired qualified accounting and finance staff, and may be required to do so in the future. However, 

  
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if we are unable to accomplish any necessary objectives in a timely and effective manner, our ability to comply with our financial reporting obligations and other rules applicable to reporting
issuers could be impaired. Moreover, any failure to maintain effective internal controls could cause us to fail to satisfy our reporting obligations or result in material misstatements in our financial statements. If we cannot provide reliable
financial reports or prevent fraud, our reputation and operating results could be materially adversely affected which could also cause investors to lose confidence in our reported financial information, which could result in a reduction in the
market price of our subordinate voting shares. 
 We do not expect that our disclosure controls and procedures and internal controls over
financial reporting will prevent all error and fraud. A control system, no matter how well-designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a
control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute
assurance that all control issues within an organization are detected. The inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Controls can
also be circumvented by individual acts of certain persons, by collusion of two or more people or by management override of the controls. Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may
occur and may not be detected in a timely manner or at all. 
 We will incur significant expenses and devote other significant resources and
management time as a result of being a public company, which may negatively impact our financial performance and could cause our results of operations and financial condition to suffer.

We will incur significant legal, accounting, insurance and other expenses as a result of being a public company. The rules implemented by the
AMF, the securities regulators in each of the other provinces and territories of Canada and the TSX, have required changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations will
substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. Moreover, the securities regulators in Canada and the TSX may adopt new rules and regulations relating to
information disclosure, financial reporting and controls and corporate governance in the future, which could subject us to additional increases in legal, accounting and other compliance costs. The new obligations of being a public company will
require attention from our senior management and could divert their attention away from the day-to-day management of our business. Given that most of the individuals who
now constitute our management team have limited experience managing a publicly traded company and complying with the increasingly complex laws pertaining to public companies, initially, these new obligations could demand even greater attention.

We also expect these laws, rules and regulations to make it more expensive for us to obtain director and officer liability insurance, and we
may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board or as
officers.
 As a result of the foregoing, we expect a substantial increase in legal, accounting, insurance and certain other expenses in the
future, which will negatively impact our financial performance and could cause our results of operations and financial condition to suffer. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to
delisting of our Subordinate Voting Shares, fines, sanctions and other regulatory action and potentially civil litigation.
 If securities or industry
analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our Subordinate Voting Shares and our trading volume could decline.

The trading market for our Subordinate Voting Shares will depend in part on the research and reports that securities or industry analysts
publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no or too few securities or industry analysts commence coverage of our company, the trading price for our
Subordinate Voting Shares would likely be negatively affected. In the event that securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our Subordinate Voting Shares or publish inaccurate or
unfavorable research about our business, the price of our Subordinate Voting Shares would likely decline. If one or more of 

  
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these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our Subordinate Voting Shares could decrease, which might cause the price of our Subordinate
Voting Shares and trading volume to decline.
 Each of Novacap, Caisse and our Chief Executive Officer beneficially owns a significant amount of our
shares and may have interests that differ from, or may take actions that are not in the interests of, other shareholders.
 Each of
Novacap, Caisse and our Chief Executive Officer (the “Principal Shareholders”) holds approximately 39.88%, 23.04% and 37.08%, respectively, of our Multiple Voting Shares and 37.99%, 21.95% and 35.32%, respectively, of our outstanding
voting rights. Novacap, Caisse and our Chief Executive Officer will therefore have significant influence over our management and affairs and over all matters requiring shareholder approval, including the election of directors and significant
corporate transactions. Novacap has the right to designate two (2) members to our Board, Caisse has the right to designate one (1) member to our Board and our Chief Executive Officer has a seat on the Board and the right to designate one
(1) additional member to our Board. Circumstances may occur in which the interests of Novacap, Caisse and/or our Chief Executive Officer could be in conflict with the interests of other shareholders, and any of Novacap, Caisse or our Chief
Executive Officer would have significant influence to cause us to take actions that align with their interests.
 Additionally, Novacap and
Caisse are in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us. Novacap and Caisse may also pursue acquisition opportunities that may be complementary to our
business and, as a result, those acquisition opportunities may not be available to us. Our Audit Committee is responsible for reviewing all related party transactions for potential conflict of interest situations and approving all such transactions.
Our Audit Committee consists of directors who are independent as required by applicable Canadian securities regulation and the TSX Company Manual, subject to the permitted phase-in period afforded by such
rules. In addition, our code of ethics contains provisions designed to address conflicts of interest. However, such provisions may not be effective in limiting Novacap and Caisse’s significant influence over us.

The dual-class structure contained in our Articles has the effect of concentrating voting control and the ability to influence corporate matters with
Novacap, Caisse and our Chief Executive Officer.
 Our Multiple Voting Shares have 10 votes per Multiple Voting Share and our
Subordinate Voting Shares have one vote per Subordinate Voting Share. Shareholders who hold Multiple Voting Shares, including Novacap, Caisse and, indirectly, our Chief Executive Officer, will together hold approximately 95.26% of the voting rights
of our outstanding voting shares and therefore have significant influence over our management and affairs and over all matters requiring shareholder approval, including the election of directors and significant corporate transactions. In addition,
the Principal Shareholders entered into the Investor Rights Agreement providing for certain director nomination rights and registration rights. 

In addition, because of the 10-to-1 voting ratio between our
Multiple Voting Shares and Subordinate Voting Shares, the holders of our Multiple Voting Shares continue to control a majority of the combined voting rights of our voting shares although the Multiple Voting Shares represent a substantially reduced
percentage of our total outstanding voting shares. The concentrated voting control of holders of our Multiple Voting Shares limits the ability of our subordinate voting shareholders to influence corporate matters for the foreseeable future,
including the election of directors as well as with respect to decisions regarding amending our share capital, creating and issuing additional classes of shares, making significant acquisitions, selling significant assets or parts of our business,
merging with other companies and undertaking other significant transactions. As a result, holders of Multiple Voting Shares have the ability to influence or control many matters affecting us and actions may be taken that our subordinate voting
shareholders may not view as beneficial. The market price of our Subordinate Voting Shares could be adversely affected due to the significant influence and voting rights of the holders of Multiple Voting Shares. Additionally, the significant voting
interest of holders of Multiple Voting Shares may discourage transactions involving a change of control, including transactions in which an investor, as a holder of the Subordinate Voting Shares, might otherwise receive a premium for the Subordinate
Voting Shares over the then-current market price, or discourage competing proposals if a going private transaction is proposed by one or more holders of Multiple Voting Shares.

Future transfers by holders of Multiple Voting Shares, other than permitted transfers to such holders’ respective affiliates or direct
family members or to other permitted holders, will result in those Multiple Voting Shares automatically 

  
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converting to Subordinate Voting Shares, which will have the effect, over time, of increasing the relative voting rights of those holders who retain their Multiple Voting Shares.

We do not anticipate paying any cash dividends in the foreseeable future.

We currently intend to retain our future earnings, if any, for the foreseeable future, to fund the operation of our business and future growth.
We do not intend to pay any dividends to holders of our Subordinate Voting Shares for the foreseeable future. As a result, capital appreciation in the price of our Subordinate Voting Shares, if any, will be your only source of gain on an investment
in our Subordinate Voting Shares.
 Our by-laws provide that any derivative actions, actions relating to
breach of fiduciary duties and other matters relating to our internal affairs will be required to be litigated in the Province of Québec, which could limit your ability to obtain a favorable judicial forum for disputes with us.

We have adopted a forum selection by-law that provides that, unless we consent in writing to the
selection of an alternative forum, the Superior Court of the Province of Québec, Canada and appellate Courts therefrom (or, failing such Court, any other “court” as defined in the CBCA having jurisdiction, and the appellate Courts
therefrom), will be the sole and exclusive forum for: any derivative action or proceeding brought on our behalf; any action or proceeding asserting a breach of fiduciary duty owed by any of our directors, officers or other employees to us; any
action or proceeding asserting a claim arising pursuant to any provision of the CBCA or our Articles or by-laws; or any action or proceeding asserting a claim otherwise related to our “affairs” (as
defined in the CBCA). Our forum selection by-law also provides that our securityholders are deemed to have consented to personal jurisdiction in the Province of Québec and to service of process on their
counsel in any foreign (non-Canadian) action initiated in violation of our by-law. Therefore, it may not be possible for securityholders to litigate any action relating
to the foregoing matters outside of the Province of Québec.
 Our forum selection by-law
seeks to reduce litigation costs and increase outcome predictability by requiring derivative actions and other matters relating to our affairs to be litigated in a single forum. While forum selection clauses in corporate charters and by-laws are becoming more commonplace for public companies in the United States and have been upheld by courts in certain states, they are untested in Canada. It is possible that the validity of our forum selection by-law could be challenged and that a court could rule that such by-law is inapplicable or unenforceable. If a court were to find our forum selection by-law inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions and
we may not obtain the benefits of limiting jurisdiction to the courts selected.
 Provisions of our Articles and
by-laws and certain Canadian legislation could delay or deter a change of control, limit attempts by our shareholders to replace or remove our current senior management and affect the market price of our
Subordinate Voting Shares.
 Our Articles authorize our Board to issue an unlimited number of Preferred Shares without shareholder
approval and to determine the rights, privileges, restrictions and conditions granted to or imposed on any unissued series of Preferred Shares. Those rights may be superior to those of our Subordinate Voting Shares and Multiple Voting Shares. For
example, Preferred Shares may rank prior to Subordinate Voting Shares and Multiple Voting Shares as to dividend rights, liquidation preferences or both, may have full or limited voting rights and may be convertible into Subordinate Voting Shares. If
we were to issue a significant number of Preferred Shares, these issuances could deter or delay an attempted acquisition of us or make the removal of management more difficult. Issuances of Preferred Shares, or the perception that such issuances may
occur, could cause the trading price of our Subordinate Voting Shares to drop.
 We may issue additional Subordinate Voting Shares and Multiple Voting
Shares and such issuance will result in immediate dilution to existing shareholders.
 Our Articles permit us to issue an unlimited
number of Subordinate Voting Shares and Multiple Voting Shares. We anticipate that we will, from time to time, issue additional Subordinate Voting Shares or other securities convertible or 

  
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exercisable for Subordinate Voting Shares, including pursuant to the exercise of stock options. Subject to the requirements of the TSX, we will not be required to obtain the approval of
shareholders for the issuance of additional Subordinate Voting Shares or other securities convertible or exercisable for Subordinate Voting Shares. Although the rules of the TSX generally prohibit us from issuing additional Multiple Voting Shares,
there may be certain circumstances where additional Multiple Voting Shares may be issued, including pursuant to the exercise of the subscription rights attached to the Multiple Voting Shares. Any further issuances of Subordinate Voting Shares,
Multiple Voting Shares or other securities convertible or exercisable for Subordinate Voting Shares or Multiple Voting Shares will result in immediate dilution to existing shareholders. Furthermore, issuances of a substantial number of additional
Subordinate Voting Shares, Multiple Voting Shares or other securities convertible or exercisable for Subordinate Voting Shares or Multiple Voting Shares, or the perception that such issuances could occur, may adversely affect the prevailing market
price for the Subordinate Voting Shares. Additionally, any further issuances of Multiple Voting Shares may significantly lessen the combined voting rights of our Subordinate Voting Shares due to the 10-to-1 voting ratio between our Multiple Voting Shares and Subordinate Voting Shares.
 Additional Information

 Additional information relating to the Company, including the Company’s most recent annual and quarterly reports is available on
SEDAR at www.sedar.com. 
 Certification of Disclosure 

Controls and Procedures 
 Disclosure
controls and procedures are designed to provide reasonable assurance that information required to be disclosed in reports filed with the securities regulatory authorities are recorded, processed, summarized and reported in a timely fashion. The
disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in such reports is then accumulated and communicated to the Company’s management to ensure timely decisions regarding required
disclosure. Management regularly reviews disclosure controls and procedures; however, they cannot provide an absolute level of assurance because of the inherent limitations in control systems to prevent or detect all misstatements due to error or
fraud. The CEO and the CFO, along with Management, have evaluated and concluded that the Company’s disclosure controls and procedures were effective as at December 31, 2020. 

Internal Controls over Financial Reporting 

The Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining internal controls over financial
reporting. The Company’s internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with IFRS. The Chief Executive Officer and Chief Financial Officer have been advised that the control framework the Chief Executive Officer and the Chief Financial Officer used to design the Company’s internal controls over financial reporting
is recognized by the Committee of Sponsoring Organizations of the Treadway Commission. The Chief Executive Officer and the Chief Financial Officer have evaluated, or caused to be evaluated under their supervision, whether or not there were changes
to its internal controls over financial reporting during the period ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect the Company’s internal controls over financial reporting. No such
changes were identified through their evaluation. The Chief Executive Officer and Chief Financial Officer, together with management, have evaluated and concluded that, to the best of their knowledge, the Company’s internal controls over
financial reporting were effective as at December 31, 2020. 

  
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 Limitations of Controls and Procedures 

Management, including the Chief Executive Officer and Chief Financial Officer, believes that any disclosure controls and procedures or internal
controls over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of
fraud, if any, within the Company have been prevented or detected. These inherent limitations include the reality judgments in decision making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost-effective control system, misstatements due to
error or fraud may occur and not be detected. 
 Limitation on Scope of Design 

The scope of design of internal controls over financial reporting and disclosure controls and procedures excluded the controls, policies, and
procedures of Smart2Pay which was acquired on November 2, 2020. Smart2Pay’s contribution to our Consolidated Statements of Loss and Comprehensive Loss for Fiscal 2020 was approximately 3% of total revenues and approximately (3%) of total
net loss. Additionally, as at December 31, 2020, Smart2Pay’s current assets and current liabilities were approximately 7% and 6% of consolidated current assets and current liabilities, and
non-current assets, which includes intangible assets and goodwill from acquisition, were approximately 23% of consolidated non-current assets. The amounts recognized for
the assets acquired and liabilities assumed at the date of acquisition are described in Note 4 of the Consolidated Financial Statements for the fiscal year ended Fiscal 2020. 

  
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